Cheque complaint authorisation and material alteration defeat enforcement under the Negotiable Instruments Act despite presumption of liability.

A cheque complaint by a company must be filed through proved authorisation, and where no authority letter or board resolution is produced, the complaint is incompetent. The statutory presumption under Section 139 continued in favour of the complainant because the accused offered no independent evidence to show the cheques were only security and not issued toward liability. However, visible cutting and overwriting in the cheque dates amounted to an unexplained material alteration; in the absence of proof of the drawer's consent or a common intention, Section 87 barred enforcement. The acquittal was therefore sustained on the grounds of want of proved authorisation and material alteration.

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Issues: (i) whether the cheques were issued towards discharge of a legally enforceable debt or liability and whether the statutory presumption stood rebutted; (ii) whether the complaint under the Negotiable Instruments Act was maintainable in the absence of proved authorisation in favour of the person who filed it; (iii) whether alteration of the cheque dates amounted to a material alteration attracting Section 87 of the Negotiable Instruments Act, 1881.

Issue (i): whether the cheques were issued towards discharge of a legally enforceable debt or liability and whether the statutory presumption stood rebutted.

Analysis: The statutory presumption under Section 139 operates in favour of the holder of the cheque once execution is shown. The accused led no independent evidence to establish that the cheques were issued only as security and not in discharge of liability. A bare denial or the statement in reply was insufficient to displace the presumption.

Conclusion: This issue was decided in favour of the complainant and against the accused.

Issue (ii): whether the complaint under the Negotiable Instruments Act was maintainable in the absence of proved authorisation in favour of the person who filed it.

Analysis: A complaint on behalf of a company must be instituted by a duly authorised person. Although the complaint alleged authorisation and a director supported that assertion, no authority letter or board resolution was produced to prove that the person who signed and filed the complaint was duly empowered. The defect was treated as going to the competence of the complaint and was not cured on the record.

Conclusion: This issue was decided against the complainant and in favour of the accused.

Issue (iii): whether alteration of the cheque dates amounted to a material alteration attracting Section 87 of the Negotiable Instruments Act, 1881.

Analysis: The evidence showed that the cheques were originally given on one date, remained in the complainant's custody, and later bore different dates with visible cutting and overwriting. No satisfactory explanation was offered as to who altered the dates or with whose consent. The Court held that the complainant failed to show that the alteration was made with the drawer's assent or to carry out a common intention of the parties.

Conclusion: This issue was decided in favour of the accused and against the complainant.

Final Conclusion: The acquittal was sustained because the complaint suffered from want of proved authorisation and the cheques were found to have undergone a material alteration, even though the statutory presumption as to liability was not displaced on the security-cheque plea alone.

Ratio Decidendi: A cheque complaint by a company must be supported by proved authorisation, and where the cheque bears an unexplained material alteration in the date, liability under Section 138 cannot be enforced unless the alteration is shown to have been made with the drawer's consent or within the common intention of the parties.

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