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Issues: (i) Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 filed by a director in his individual name, without authorization or power of attorney from the company, was maintainable; (ii) Whether the cheque was proved to have been issued in discharge of a legally enforceable debt or liability.
Issue (i): Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 filed by a director in his individual name, without authorization or power of attorney from the company, was maintainable.
Analysis: The agreement and the underlying transaction were between the petitioner's company and the complainant company, while the complaint was instituted by one director in his personal capacity. No board resolution or power of attorney was produced to show authority to initiate proceedings in his own name. The defect was not cured at any later stage by the company, and the complaint was not presented as one by the company through an authorized representative.
Conclusion: The complaint was not maintainable in the form in which it was filed, and the issue is decided in favour of the petitioner.
Issue (ii): Whether the cheque was proved to have been issued in discharge of a legally enforceable debt or liability.
Analysis: The agreement contained corrections in the payment terms, the cheque was dated within a short span of the agreement, and the evidence did not satisfactorily establish completion of work or the subsistence of a liability payable to the complainant personally. The circumstances created serious doubt about the transaction and did not establish that the cheque represented a legally enforceable debt or liability owed to the complainant in his individual capacity.
Conclusion: The existence of a legally enforceable debt or liability was not proved, and the issue is decided in favour of the petitioner.
Final Conclusion: The concurrent conviction and appellate affirmation were found unsustainable, and the revisional challenge succeeded on the twin grounds of want of authority and failure to prove the essential ingredients of Section 138 of the Negotiable Instruments Act, 1881.
Ratio Decidendi: A prosecution under Section 138 of the Negotiable Instruments Act, 1881 must be instituted by the payee or a duly authorized representative, and the cheque must be shown to have been issued against a subsisting legally enforceable debt or liability.
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