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Issues: Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 and the statutory notice could be issued by a director in his individual name when the payee of the cheque was a company and he was neither the payee nor the holder in due course.
Analysis: The complaint and the notice were both issued in the individual name of the director, although the cheques and the lease transaction showed the company as the payee and landlord. Under Sections 138 and 142 of the Negotiable Instruments Act, 1881, the demand notice and the complaint must be made by the payee or the holder in due course. Section 7 defines payee as the person named in the instrument, and Section 9 defines holder in due course as a person who becomes the possessor for consideration or the payee or indorsee, as applicable. The complaint did not show that the director had become the holder in due course, nor did the cheques carry any endorsement in his favour. The board resolution authorising the director to take steps for the company did not alter the fact that the complaint was not filed in the company's name.
Conclusion: The complaint was not maintainable at the instance of the director, the ingredients of Section 138 were not satisfied, and discharge under Section 251 of the Code of Criminal Procedure, 1973 was justified.
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