Dishnonour of Cheque : Complaint by finance company, failed to prove authorization of the person filing the complaint
Acquittal Upheld in Noble Finance Company Cheque Dishonour Case. Kerala High Court Dismisses Appeal, Emphasizes Need for Proper Authorization in Filing Complaints
The Kerala High Court, in a significant judgment dated October 16, 2025, upheld the acquittal of the accused, Mani P, in a cheque dishonour case filed by Noble Finance Company under Section 138 of the Negotiable Instruments Act, 1881. The court emphasized the necessity of proper authorization for filing such complaints in the firm's name.
The case revolved around a cheque issued by the accused towards the repayment of a loan under a hire purchase agreement. The cheque was dishonoured due to insufficient funds, leading Noble Finance Company to file a complaint against Mani P. However, the trial court acquitted the accused, citing the complainant's failure to prove that the person who signed the complaint was an authorized partner or agent of the firm.
In its judgment, the Kerala High Court, presided over by Justice Johnson John, reiterated the importance of demonstrating proper authorization when filing complaints on behalf of a partnership firm. The absence of any enabling provision in the Criminal Procedure Code (Cr.P.C), analogous to Order XXX of the Civil Procedure Code (C.P.C), played a crucial role in the court's decision.
The court referenced previous judgments, including Nazar v. State of Kerala and Basalingappa v. Mudibasappa, to highlight the necessity of rebutting statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act through a preponderance of probabilities. The accused successfully created doubt about the transaction and the existence of the debt, thereby rebutting the presumptions.
Justice John emphasized that without evidence of authorization, the complaint filed by Noble Finance Company was invalid. The court found no reason to interfere with the trial court's findings and dismissed the appeal.
This judgment underscores the critical requirement for firms to ensure proper authorization when initiating legal proceedings, particularly in cheque dishonour cases.
Bottom Line:
A complaint filed under Section 138 of the Negotiable Instruments Act, 1881 must be duly authorized by a partner or an agent of the firm filing the complaint, failing which the complaint is not maintainable.
Statutory provision(s): Negotiable Instruments Act, 1881 Section 138, Sections 118 and 139, Cr.P.C Section 255(1)
Noble Finance Company v. Mani P, (Kerala) : Law Finder Doc Id # 2795183
