Dishonour of Cheque - Complaint filed without proper authorization by the payee company is a curable defect

Gauhati High Court Upholds Complaint Validity Despite Initial Authorization Defect. High Court Rules Lack of Initial Authorization in Section 138 NI Act Complaint is Curable Defect

The Gauhati High Court, in a significant decision dated December 3, 2025, ruled that a complaint filed under Section 138 of the Negotiable Instruments Act, 1881, which was initially submitted without proper authorization, is not grounds for dismissal and can be rectified during the trial. The case, M/s Amprolisa Construction And Marketing Pvt Ltd v. Gupta Hardware Private Limited, revolved around a complaint filed by Gupta Hardware alleging cheque dishonor by Amprolisa Construction.

The petitioner, M/s Amprolisa Construction And Marketing Pvt Ltd, sought to quash the complaint on the grounds that it was filed without proper authorization from the Board of Directors of Gupta Hardware Pvt Ltd. The complaint was initially lodged by Manab Lahkar, the Marketing Manager of the respondent company, without a prior resolution from the Board of Directors or a proper General Power of Attorney.

Justice Sanjeev Kumar Sharma, presiding over the matter, emphasized that the lack of initial authorization is a curable defect. The court highlighted that the subsequent ratification through a Board Resolution and a General Power of Attorney is permissible, aligning with precedents set by the Supreme Court in similar cases. The High Court noted that the Magistrate's decision to allow additional evidence to rectify the initial defect was justified, and quashing the proceedings under Section 482 of the Criminal Procedure Code was unwarranted.

The court referred to multiple precedents, including the landmark cases of MMTC Ltd. v. Medchl Chemicals and Pharma (P) Ltd. and United Bank of India v. Naresh Kumar, which underscore the principle that initial authorization defects can be cured at later stages, reinforcing that a company acts through its representatives and subsequent ratification validates the complaint.

The ruling underscores the judiciary's approach towards ensuring that procedural lapses do not overshadow substantive justice, particularly in cases involving corporate entities under the Negotiable Instruments Act.

Bottom Line:

Negotiable Instruments Act, 1881 - Complaint filed without proper authorization by the payee company - Lack of initial authorization for filing a complaint is a curable defect and can be rectified during the trial or even at the appellate stage.

Statutory provisions: Negotiable Instruments Act, 1881 - Section 138; Criminal Procedure Code, 1973 - Section 482

M/s Amprolisa Construction And Marketing Pvt Ltd v. Gupta Hardware Private Limited, (Gauhati) : Law Finder Doc Id # 2817068