Case Note & Summary
The revision application was filed by M/s Reshmi Constructions, a partnership firm, through its partner Shri Pandharinath Chafadkar, challenging the judgment and order dated 15/05/2009 passed by the Judicial Magistrate, First Class at Ponda in Criminal Case No. 389/OA/2006/B, whereby the accused Laxman Vithal Chunekar was acquitted of the offence under Section 138 of the Negotiable Instruments Act, 1881. The complainant alleged that the accused had issued a cheque for Rs. 1,20,000/- towards refund of excess amount received under an agreement dated 07/11/1996, which was dishonoured due to insufficient funds. After issuing a legal notice, the complainant filed the complaint. The accused denied liability, claiming the cheque was given as security for a loan transaction and that the debt was not legally enforceable. The Trial Magistrate acquitted the accused on two grounds: first, that the partner who signed the complaint was not examined and his authority was not proved; second, that the accused had rebutted the presumption under Section 139 of the N.I. Act by showing the cheque was issued as security. The High Court, in revision, examined the correctness of the acquittal. The Court held that the revisional jurisdiction is limited and does not permit re-appreciation of evidence unless there is perversity. On the first issue, the Court found that the complainant firm had not examined the partner who signed the complaint, nor had it produced any resolution or authorization to show that the partner was competent to file the complaint. Relying on precedents, the Court held that a complaint by a firm must be filed by a duly authorized person, and failure to prove such authority is fatal. On the second issue, the Court noted that the accused had raised a probable defence that the cheque was issued as security, which was supported by the complainant's own witness who admitted that the cheque was given as security. The Court held that the presumption under Section 139 was rebutted, and the complainant failed to prove that the cheque was issued towards a legally enforceable debt. Consequently, the High Court dismissed the revision application, upholding the acquittal.
Headnote
A) Criminal Procedure Code - Revision - Scope of Revision - High Court's revisional jurisdiction under Section 397 read with Section 401 Cr.P.C. is limited to examining correctness, legality, or propriety of any finding, sentence, or order, and not to re-appreciate evidence unless there is perversity or illegality. (Para 6) B) Negotiable Instruments Act - Dishonour of Cheque - Complaint by Partnership Firm - Authority of Partner - In a complaint under Section 138 of the Negotiable Instruments Act, 1881 filed by a partnership firm, the partner who signs the complaint must be duly authorized by the firm. Non-examination of the partner who signed the complaint and failure to prove his authority renders the complaint not maintainable. (Paras 7-10) C) Negotiable Instruments Act - Presumption under Section 139 - Rebuttal - The presumption under Section 139 of the Negotiable Instruments Act, 1881 that the cheque was issued for discharge of a debt or liability is rebuttable. The accused can rebut it by raising a probable defence. In this case, the accused successfully rebutted the presumption by showing that the cheque was issued as security and not towards any existing liability. (Paras 11-12) D) Negotiable Instruments Act - Liability - Security Cheque - A cheque issued as security does not create a legally enforceable debt or liability under Section 138 of the Negotiable Instruments Act, 1881 unless it is presented towards a crystallized liability. The complainant failed to prove that the cheque was issued towards a legally enforceable debt. (Paras 11-12)
Issue of Consideration
Whether the non-examination of the partner who signed the complaint on behalf of the partnership firm is fatal to the prosecution under Section 138 of the Negotiable Instruments Act, 1881, and whether the Trial Magistrate erred in acquitting the accused on that ground.
Final Decision
The High Court dismissed the revision application, upholding the judgment and order of acquittal passed by the Trial Magistrate.
Law Points
- Section 138 Negotiable Instruments Act
- 1881
- complaint by partnership firm
- authority of partner to sign complaint
- non-examination of partner
- presumption under Section 139
- rebuttal of presumption
- criminal revision jurisdiction
