Negotiable Instruments Act, 1881 – Section 138 – Payee – Holder in Due Course – Competence to File Complaint – Firm as Complainant – Authorised Representative – Dishonour of Cheque.
Facts: The appellant, K. Ramachandran, Branch Manager of Kerala Roadways Ltd., filed a complaint under Section 138 of the Negotiable Instruments Act, 1881, in his individual capacity, alleging dishonour of a cheque for Rs.65,000/- issued by the respondent, Gopi, in favour of Kerala Roadways Ltd. The trial court acquitted the accused, citing lack of legal notice within the stipulated period and that the cheque was issued for a liability owed to the company, not the complainant personally. The complainant appealed against the acquittal.
Issues:
- Whether a manager of a firm can file a complaint under Section 138 of the Negotiable Instruments Act in his individual capacity for a cheque issued in favour of the firm?
- Whether the trial court’s acquittal warranted interference?
Held:
- Under Section 142(1)(a) read with Sections 7, 8, and 9 of the Negotiable Instruments Act, only the payee or holder in due course of a cheque is competent to file a complaint under Section 138. Where a cheque is issued in favour of a firm, the firm is the payee or holder in due course, and the complaint must be filed by the firm, represented by an authorised officer. A manager cannot file a complaint in his individual capacity for a liability owed to the firm, as he is neither the payee nor the holder in due course. An exception exists for sole proprietorships, where the proprietor may file the complaint.
- The prosecution initiated by the appellant in his individual capacity was defective, as the cheque was issued for a liability owed to Kerala Roadways Ltd. The trial court’s finding that the complainant lacked locus standi was justified. The appeal was dismissed, upholding the acquittal.
Ratio Decidendi: A complaint under Section 138 of the Negotiable Instruments Act for a dishonoured cheque issued in favour of a firm must be filed by the firm as the payee or holder in due course, represented by an authorised officer, and not by an individual officer in his personal capacity, unless it is a sole proprietorship.
Judgment: Appeal dismissed. Trial court’s acquittal of the accused under Section 138 of the Negotiable Instruments Act upheld.
High Court of Kerala; A. Badharudeen, J.
Citations : 2025 KER 42704 : 2025 (6) KLR 160 : 2025 KLT OnLine 2137
Criminal Appeal No. 968 of 2007; 16th June 2025
