2015 (12) TMI 637 - HC - Indian Laws

Appeal Dismissed: Importance of Proper Complaint Filing under Section 138

Bhupesh Rathod Versus Dayashankar Prasad Chaurasia

The High Court dismissed the appeal against the order of acquittal under Section 138 of the Negotiable Instruments Act. The court emphasized that ... Dishonoring of cheque - authority to file the complaint - Commission of an offence punishable under Section 138 of the Negotiable Instruments Act - whether the order of acquittal be set aside and respondent no.1 be convicted? - Held that:- All the cheques were favouring 'M/s. Bell Marshall Tele System Limited.' The complainant's case is that M/s. Bell Marshall Tele System Limited is a Company incorporated under the Companies Act. Company, being a juristic person, has a separate and distinct identity, apart from its directors. The payee was the company. If the complaint, as filed, is seen, it does not appear to have been filed by the Company. The complaint has been filed by the complainant in his name, and though he has given his description as the 'Managing Director of M/s. Bell Marshall Tele System Limited', it is difficult to spell out from the complaint, that the same had been filed by the said Company. From the demand notice that the same has been made on behalf of the Company M/s. Bell Marshall Tele System Limited. When the Company was aware of this position, that being payee, the Company itself was required to file the complaint, why the complaint was not filed in the name of the Company, is not clear. It is difficult to hold that this is simply an oversight or a mistake, and the possibility that the complainant wanted to keep this aspect of the matter rather vague, cannot be ruled out. This is particularly so, because, it does not appear to be the business of the Company to advance loans on interest. As per the case made out in the complaint, the transaction was a loan transaction. It is not clear whether the Company was authorized to do the business of advancing loan with interest. The possibility, of the complaint not having been filed in the name of the Company keeping this aspect in mind, therefore, cannot be ruled out. Though the entire reasoning of the learned Magistrate cannot be accepted, in the ultimate analysis, it must be held that, the complaint had not been filed by the payee or the holder in due course of the cheques in question. Section 142 of the N.I. Act leaves no manner of doubt that a complaint in respect of an offence punishable under Section 138 thereof, would be maintainable only if it is filed by a payee or the holder in due course. In this view of the matter, do not wish to interfere with the finding of acquittal recorded by the learned Magistrate. Issues:1. Appeal against order of acquittal under Section 138 of the Negotiable Instruments Act.2. Validity of complaint filed by the appellant.3. Requirement of complaint by payee or holder in due course under Section 142 of the N.I. Act.Analysis:1. The appellant filed an appeal against the order of acquittal passed by the Special Metropolitan Magistrate, Mumbai, under Section 138 of the Negotiable Instruments Act. The appellant sought the conviction of the respondent based on the dishonored cheques issued by the accused. The appellant contended that the reasoning leading to the acquittal was flawed, but the High Court observed that the prosecution itself was defective. The court noted that under Section 142 of the N.I. Act, a complaint for an offense under Section 138 must be filed by the payee or the holder in due course of the cheques in question.2. The complaint filed by the appellant was scrutinized by the court to determine its validity. The appellant, referred to as the complainant, had filed the complaint against the accused, but the court observed that the complaint did not clearly indicate that it was filed by the payee or the Company mentioned as the payee. The court highlighted that the complaint was filed in the name of the complainant, who described himself as the Managing Director of the Company but did not explicitly state that the Company was the complainant. The court emphasized the importance of the complaint being filed by the payee or a holder in due course, as mandated by the N.I. Act.3. The court delved into the requirement of the complaint being filed by the payee or the holder in due course as per Section 142 of the N.I. Act. It was noted that all the cheques were in favor of the Company, but the complaint was filed by the appellant individually, not on behalf of the Company. Despite arguments by the appellant's counsel, the court found that the complaint did not meet the statutory requirement of being filed by the payee or the holder in due course. Consequently, the court declined to interfere with the acquittal order, emphasizing the importance of strict adherence to the legal provisions outlined in the N.I. Act.In conclusion, the High Court dismissed the appeal against the order of acquittal, emphasizing the necessity for complaints under Section 138 of the N.I. Act to be filed by the payee or the holder in due course. The judgment underscores the significance of procedural compliance and adherence to statutory requirements in matters involving negotiable instruments and highlights the pivotal role of the complainant's identity in such legal proceedings.