2007 (6) TMI 577 - HC - Indian Laws

Summary

Issues Involved:
1. Admissibility of evidence and notice.
2. Authority to file the complaint.
3. Material alteration of cheques.
4. Presumption under Section 139 of the N.I. Act.
5. Basis for acquittal and appellate review.

Detailed Analysis:

1. Admissibility of Evidence and Notice:
The complainant alleged that the accused issued two cheques to repay a loan, which were dishonored due to insufficient funds. The Magistrate found that the complainant did not file the carbon copy of the notice and the photocopy was inadmissible. However, the accused admitted receiving the notice and replying to it. The court concluded that despite the photocopy being inadmissible, the acknowledgment by the accused validated the notice, thus the complaint was not defective on this ground.

2. Authority to File the Complaint:
The complaint was filed by an employee of the company, Raj Kumar, who claimed he was authorized. The court emphasized that Section 142(a) of the N.I. Act requires a complaint to be made by the payee or holder in due course. The Articles of Association of the company required authorization from the Board of Directors for legal proceedings. The court found no evidence of such authorization, rendering the complaint defective. The defect was not cured during the trial, and thus the complaint was not maintainable.

3. Material Alteration of Cheques:
The cheques initially dated 15-9-2001 were altered to 31-12-2001 and 1-4-2002. The court noted that the cheques remained in the complainant's custody from issuance to presentation. No explanation was provided for the alteration, and the accused did not consent to it. The court ruled that the alteration was material, making the cheques void under Section 87 of the N.I. Act. Consequently, no action could be taken under Section 138 of the N.I. Act based on these cheques.

4. Presumption under Section 139 of the N.I. Act:
The court discussed the presumption under Section 139 that a cheque is issued for discharge of debt or liability unless proven otherwise. The accused contended that the cheques were given as security. The court held that the burden of proof was on the accused to establish this claim. As the accused did not provide evidence to rebut the presumption, the court initially leaned towards the complainant's stance. However, due to the material alteration, this presumption was ultimately irrelevant.

5. Basis for Acquittal and Appellate Review:
The court reviewed the trial court's findings, which included the inadmissibility of the photocopy of the notice, lack of authorization for Raj Kumar to file the complaint, and material alteration of the cheques. The appellate court emphasized that it could only overturn an acquittal if the trial court's decision was perverse or manifestly illegal. Finding no such errors, the appellate court upheld the acquittal. The trial court's judgment was based on substantial evidence, and the appellate court found no ground to interfere.

Conclusion:
The appeal was dismissed, affirming the trial court's decision to acquit the accused. The primary reasons included the inadmissibility of the photocopy of the notice, lack of authorization for the complainant to file the complaint, and material alteration of the cheques, rendering them void under Section 87 of the N.I. Act.