Cheque dishonour liability turns on valid notice, curable company authorisation defects, and unrebutted statutory presumption

A cheque dishonour prosecution under the Negotiable Instruments Act was analysed on three points: the statutory demand notice was treated as compliant where it was issued on the company letterhead and service evidence was accepted, with technical objections not defeating liability; the company complaint was held maintainable because a board resolution and later authorisation cured the initial absence of a power of attorney; and the accused failed to rebut the Section 139 presumption after admitting receipt of funds and issuance of cheques, leaving the concurrent findings undisturbed in revisional review.

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Issues: (i) Whether the demand notice and its service satisfied the requirements of Section 138 of the Negotiable Instruments Act, 1881; (ii) Whether the complaint filed on behalf of the company was invalid for want of prior power of attorney or board authorization and for subsequent production of the resolution; (iii) Whether the accused rebutted the presumption under Section 139 of the Negotiable Instruments Act, 1881.

Issue (i): Whether the demand notice and its service satisfied the requirements of Section 138 of the Negotiable Instruments Act, 1881.

Analysis: The notice was issued on the company letterhead and signed for and on behalf of the company by its representative. The notice requirement under Section 138 is intended to inform the drawer of the dishonour and afford an opportunity to make payment. Even where service is disputed, the drawer who receives summons with the complaint cannot later avoid liability by relying on technical objections if payment is not made within the statutory period after summons. The service and acknowledgment evidence were accepted by the courts below, and the challenge was treated as technical.

Conclusion: The notice requirement was held to be satisfied against the accused.

Issue (ii): Whether the complaint filed on behalf of the company was invalid for want of prior power of attorney or board authorization and for subsequent production of the resolution.

Analysis: A complaint under Section 142 can be instituted by the payee company through an authorised human agency. The record showed that the director who filed the complaint produced a board resolution authorising him to sign and verify pleadings. The absence of a power of attorney at the initial stage was treated as a curable irregularity, and subsequent production of authorisation was held permissible. The complaint was therefore not considered stillborn, and the challenge based on technical lack of authorisation was rejected.

Conclusion: The complaint was held to be maintainable and the authorisation objection failed against the accused.

Issue (iii): Whether the accused rebutted the presumption under Section 139 of the Negotiable Instruments Act, 1881.

Analysis: Once execution of the cheques was admitted, the statutory presumption arose that they were issued in discharge of a legally enforceable liability. The defence was found inconsistent because the accused admitted receipt of Rs. 1.20 crores, admitted issuing the cheques, and failed to establish a probable defence on the standard of preponderance of probabilities. The evidence led by the accused did not displace the presumption, and the concurrent findings of the courts below were not shown to be perverse or illegal in revisional jurisdiction.

Conclusion: The presumption under Section 139 was not rebutted and the conviction was upheld against the accused.

Final Conclusion: The revisional challenge failed, the conviction and sentence under Section 138 were maintained, and the matter stood finally concluded against the accused.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, once execution of the cheque is admitted, the statutory presumption under Section 139 operates, and authorisation defects in a company complaint are curable if subsequently proved; revisional interference is unwarranted absent perversity or jurisdictional error.

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