Proof of cheque issuance by a company and agent: lack of direct evidence negates statutory presumptions and overturns conviction

A juristic person can initiate proceedings for an alleged cheque offence through an authorised representative, but the authorised witness must have direct or eyewitness knowledge of the cheque's issuance; mere reliance on company records or posttransaction association is insufficient. The statutory presumptions of cheque execution arise only after the complainant proves actual execution and issuance. Because the prosecution here offered no substantive evidence that the accused executed or issued the cheque, the initial burden was not discharged and the conviction could not be sustained, leading to allowance of the revision petition and setting aside of conviction and sentence.

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Issues: (i) Whether conviction and sentence under Section 138 of the Negotiable Instruments Act can be sustained where the complainant's witnesses and the purported power of attorney holder lack direct knowledge of the issuance and execution of the cheque.

Analysis: The complaint was filed and prosecuted through an alleged power of attorney holder who did not produce the power of attorney before the trial court and stated lack of direct knowledge of the transactions and of the handwriting on the cheque. The witnesses produced by the complainant gave evidence based on company records and information rather than personal knowledge of the issuance or execution of the cheque. For a juristic person to invoke presumptions under Sections 118 and 139 of the Negotiable Instruments Act, execution of the cheque must first be proved by direct evidence, admission, or a competent witness who witnessed execution; merely producing records or testimony based on information from records is insufficient to discharge the initial onus.

Conclusion: The conviction and sentence under Section 138 of the Negotiable Instruments Act are set aside for lack of proof of issuance and execution of the cheque; decision is in favour of the appellant.

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