[Cites 10, Cited by 0]

Kerala High Court

Tenny Jose vs Managing Partner on 19 December, 2025

                                       1
Crl. Appeal No. 1867/2007


                                                         2025:KER:97606




                   IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                    PRESENT

                   THE HONOURABLE MR. JUSTICE JOHNSON JOHN

          FRIDAY, THE 19TH DAY OF DECEMBER 2025 / 28TH AGRAHAYANA, 1947

                             CRL.A NO. 1867 OF 2007

      JUDGMENT DATED 25.07.2001 IN CC          NO.325   OF   1998   OF   JUDICIAL
      MAGISTRATE OF FIRST CLASS -II, ALUVA

APPELLANT/COMPLAINANT:

               TENNY JOSE, MANAGING DIRECTOR,
               STEEL HOUSE, KARUKUTTY P.O., ERNAKULAM DISTRICT.


               BY ADV SHRI.JOHNSON P.JOHN


RESPONDENT/ACCUSED AND STATE:

      1        MANAGING PARTNER, NEW METALISED AGENCY,
               IRON AND STEEL MERCHANT, KOTTAYAM.

      2        STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR,
               HIGH COURT OF KERALA, ERNAKULAM.


      SRI. M.S. BREEZE, SR. PUBLIC PROSECUTOR

       THIS CRIMINAL APPEAL HAVING COME UP FOR ADMISSION ON 16.12.2025,
       THE COURT ON 19.12.2025 DELIVERED THE FOLLOWING:
                                       2
Crl. Appeal No. 1867/2007


                                                        2025:KER:97606

                                                                        'C.R'

                            JOHNSON JOHN, J.
           ---------------------------------------------------------
                         Crl. M.A. No. 1 of 2025 &
                       Crl. Appeal No. 1867 of 2007
            ---------------------------------------------------------
                  Dated this the 19th day of December, 2025

                              JUDGMENT

This appeal by the complainant is against the acquittal of the

accused under Section 138 of the Negotiable Instruments Act, 1881 ('N.I

Act' for short).

2. As per the complaint, the accused purchased goods from the

company in which the complainant is the Managing Director and towards

payment of the amount due, the accused issued cheque dated

01.12.1997 for Rs.1,39,285.50.

3. When the complainant presented the cheque for collection, the

same was dishonoured due to insufficiency of funds in the account of the

accused and in spite of issuance of statutory notice, the accused failed to

pay the cheque amount to the complainant.

4. Before the trial court, from the side of the complainant, PW1

examined and Exhibits P1 to P8 were marked and no evidence adduced

2025:KER:97606 from the side of the accused.

5. After hearing both sides and analysing the evidence, the trial

court found that there is no valid notice as contemplated under Section

138(b) of the N.I Act and therefore, the complainant has not succeeded

in proving the offence under Section 138 of the N.I. Act against the

accused and hence, the accused was acquitted.

6. Heard Sri. Johnson P. John, the learned counsel for the

appellant, Sri. Nidhin Raj Vettikkadan, the learned State Brief

representing the first respondent/accused and Sri. M.S. Breeze, the

learned Senior Public Prosecutor for the second respondent.

7. The learned counsel for the appellant argued that the finding of

the trial court that the complainant filed the complaint on the basis of a

second notice after dishonouring the cheque for the second time is

without appreciating the evidence in a proper manner and the trial court

ought to have found that apart from Exhibit P4 statutory notice, the

complainant has not issued any previous notice under Section 138(b) of

the N.I Act.

2025:KER:97606

8. The learned counsel for the appellant pointed out that Exhibit

P7, memorandum of association and articles of association of the

company--Steel House Pvt. Ltd., would show that the complainant

herein--Tenny Jose is the Chairman-cum-Managing Director of the said

company. In clause 32 of the articles of association, it is stated that Mr.

Tenny Jose shall be the Chairman-cum-Managing Director of the

company. But, Exhibit P6, copy of the certificate of incorporation of the

company-Steel House Pvt. Ltd. shows that the said company was

incorporated under the Companies Act, 1956 on 12.09.1996. The

complainant, Tenny Jose, filed this complaint on 04.04.1998. But, no

document is produced to show that the company authorised the

complainant, Tenny Jose to file this complaint and the complainant has

no case that the Board of Directors of the company passed any

resolution authorising the complainant to file this complaint on behalf of

the company.

9. The learned State Brief representing the accused/first

respondent pointed out that the payee in Exhibit P1 cheque is M/s. Steel

House Pvt. Ltd. and the complaint is filed by the Managing Director of

2025:KER:97606 Steel House against the Managing Partner of New Metalised Agency

without disclosing the name and address of the said Managing Partner

and further, PW1 has categorically admitted in cross examination that

when Exhibit P1 cheque was previously dishonoured, he issued notice on

12.01.1998 informing about the dishonour of the cheque and demanding

the cheque amount and that subsequently, the cheque was again

presented for collection and the same was again dishonoured and

thereafter, Exhibit P4 notice dated 10.03.1998 was issued to the accused

and that the complaint filed on the basis of a second notice after

dishonouring the cheque for the second time is not maintainable and

therefore, there is no reason to interfere with the finding of the trial

court in this regard.

10. The evidence of PW1 in cross examination shows that the

cheque involved in this case was previously presented for collection

along with other cheques and when the same was dishonoured, notice

dated 12.01.1998 was issued to the accused informing about the

dishonour of the cheque and demanding payment of the cheque amount

and in spite of notice, the accused has not paid the cheque amount and

subsequently, the cheque was again presented for collection and when

2025:KER:97606 the same was again dishonoured, Exhibit P4 notice was issued.

11. The learned counsel for the appellant cited the decision of the

Honourable Supreme Court in MSR Leathers v. S. Palaniappan and

Another [2012 (4) KHC 2] and argued that an offence under Section

138 of the N.I. Act is committed every time payment is defaulted upon

the issue of notice within the statutory period. In paragraph 13 of the

above decision, the Honourable Supreme Court held thus:

"13. What is important is that neither S.138 nor S.142 or any other provision contained in the Act forbids the holder or payee of the cheque from presenting the cheque for encashment on any number of occasions within a period of six months of its issue or within the period of its validity, whichever is earlier. That such presentation will be perfectly legal and justified was not disputed before us even at the Bar by learned counsel appearing for the parties and rightly so in light of the judicial pronouncements on that question which are all unanimous. Even Sadanandan Bhadran's case (supra) the correctness whereof we are examining, recognized that the holder or the payee of the cheque has the right to present the same any number of times for encashment during the period of six months or during the period of its validity, whichever is earlier."

12. The decision of the Honourable Supreme Court in MSR

2025:KER:97606 Leathers (supra) would show that a prosecution based on a second or

successive default in payment of the cheque amount is permissible, even

if no prosecution was launched based on the first default which was

followed by a statutory notice and that subsequent dishonour of the

cheque and issuance of statutory notice will create a new cause of action

and therefore, the findings of the trial court in this regard is not legally

sustainable.

13. The learned State Brief representing the accused/first

respondent cited the decision of the Honourable Supreme Court in

Naresh Potteries v. Aarti Industries [2025 SCC OnLine SC 18] and

argued that the complaint in regard to dishonour of a cheque issued in

favour of a company, should be filed in the name of the company. In

paragraph 15 of the judgment in Naresh Potteries (supra), the

Honourable Supreme Court held thus:

15. This court in the case of National Small Industries Corporation Ltd.v. State (NCT of Delhi) [(2009) 147 Comp Cas 11 (SC); (2009) 1 SCC 407; (2009) 1 SCC (Civ) 192; (2009) 1 SCC (Cri) 513; 2008 SCC OnLine SC 1710; [2008] INSC 1308.] had an occasion

2025:KER:97606 to consider the validity of a complaint under section 138 of the Negotiable Instruments Act and the satisfaction of the requirement under section 142 thereof, as well as to determine as to who could be considered to be the complainant/representative in a case where the complaint is to be filed by an incorporated body. This court held as follows [ See page 18 of 147 Comp Cas.] :

"The term 'complainant' is not defined under the Code. Section 142 of the Negotiable Instruments Act requires a complaint under section 138 of that Act to be made by the payee (or by the holder in due course). It is thus evident that in a complaint relating to dishonour of a cheque (which has not been endorsed by the payee in favour of anyone), it is the payee alone who can be the complainant. The Negotiable Instruments Act only provides that dishonour of a cheque would be an offence and the manner of taking cognizance of offences punishable under section 138 of that Act. However, the procedure relating to initiation of proceedings, trial and disposal of such complaints, is governed by the Code. Section 200 of the Code requires that the Magistrate, on taking cognizance of an offence on complaint, shall examine upon oath the complainant and the witnesses present and the substance of such examination shall be reduced to writing and shall be signed by the complainant and the witnesses. The requirement of section 142 of the Negotiable Instruments Act that the payee should be the complainant, is met if the complaint is in the name of the payee. If the payee is a company, necessarily the complaint should be filed in the name of the company. Section 142 of the Negotiable Instruments Act does not specify who should represent the company, if a company is the complainant. A company can be represented by an employee or even by a non-employee

2025:KER:97606 authorised and empowered to represent the company either by a resolution or by a power of attorney... Resultantly, when in a complaint in regard to dishonour of a cheque issued in favour of a company or corporation, for the purpose of section 142 of the Negotiable Instruments Act, the company will be the complainant, and for purposes of section 200 of the Code, its employee who represents the company or corporation, will be the de facto complainant. In such a complaint, the de jure complainant, namely, the company or corporation will remain the same but the de facto complainant (employee) representing such de jure complainant can change, from time to time. And if the de facto complainant is a public servant, the benefit of exemption under clause (a) of the proviso to section 200 of the Code will be available, even though the complaint is made in the name of a company or corporation."

(emphasis supplied)

14. In this case, the payee in Exhibit P1 cheque is M/s Steel

House (Pvt.) Ltd. But, the complainant is Tenny Jose, Managing Director

of Steel House. Section 142 of the N.I Act reads thus:

"142. Cognizance of offences.--1[(1)] Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),--

(a) no court shall take cognizance of any offence punishable under Section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;

(b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the

2025:KER:97606 proviso to section 138:

2[Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period;]

(c) no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under section 138.].

[(2) The offence under section 138 shall be inquired into and tried only by a Court within whose local jurisdiction,--

(a) if the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated; or

(b) if the cheque is presented for payment by the payee or holder in due course, otherwise through an account, the branch of the drawee bank where the drawer maintains the account, is situated.

Explanation.--For the purposes of clause (a), where a cheque is delivered for collection at any branch of the bank of the payee or holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or holder in due course, as the case may be, maintains the account."

15. It is well settled that where the payee is a company, the

complaint should necessarily be filed in the name of the company and a

power of attorney holder or agent cannot file complaint in his personal

capacity. In Dhanasingh Prabhu v. Chandrasekar [(2025) 10 SCC

2025:KER:97606 96], the Honourable Supreme Court considered the difference between a

partnership firm and a company and held that a partnership firm, unlike

a company registered under the Companies Act, does not possess a legal

personality and firm's name is only a compendious reference for

describing its partners and that the fundamental distinction between a

firm and company rests on the premise that the company is separate

from its shareholders.

16. In Dhanasingh Prabhu (supra), the Honourable Supreme

Court also held that a partnership firm has no separate recognition

either jurisprudentially or in law, apart from its partners. It was also held

that while a Director of a company can be vicariously liable for an

offence committed by a company, insofar as a partnership firm is

concerned, when the offence is committed by such a firm, in substance,

the offence is committed by the partners of the firm and not just the

firm per se.

17. As noticed earlier, the accused is shown as Managing Partner

of New Metalised Agency and no living person is shown as representing

2025:KER:97606 the accused--Managing Partner of New Metalised Agency in the cause

title of the complaint.

18. When the learned State Brief representing the accused/first

respondent raised the above aspects, the learned counsel for the

appellant filed Crl. M.A. No.1 of 2025 for amending the cause title of the

complaint and the appeal memorandum by substituting the name of the

company, Steel House Pvt. Ltd. as the complainant and also for

incorporating the name and address of one Muraleedhara Panicker, S/o.

Ramakrishna Pillai as the Managing Partner of the firm 'New Metalised

Agency.

19. In S.R. Sukumar v. S. Sunaad Raghuram [(2015) 9 SCC

609], the Honourable Supreme Court considered the question whether

a criminal court has power to order amendment of a complaint and held

thus:

"19. What is discernible from U.P. Pollution Control Board case [(1987) 3 SCC 684 : 1987 SCC (Cri) 632] is that an easily curable legal infirmity could be cured by means of a formal application for amendment. If the amendment sought to be made

2025:KER:97606 relates to a simple infirmity which is curable by means of a formal amendment and by allowing such amendment, no prejudice could be caused to the other side, notwithstanding the fact that there is no enabling provision in the Code for entertaining such amendment, the court may permit such an amendment to be made. On the contrary, if the amendment sought to be made in the complaint does not relate either to a curable infirmity or the same cannot be corrected by a formal amendment or if there is likelihood of prejudice to the other side, then the court shall not allow such amendment in the complaint."

20. In this case, the original complaint was filed on 04.04.1998

and Crl. M.A. No. 1 of 2025 seeking amendment is filed on 25.11.2025.

There is no enabling provision in the Criminal Procedure Code for

entertaining an application for amendment of the complaint. The

complainant, Tenny Jose, who filed the amendment application to

substitute the name of the complainant and the accused at the appellate

stage has not produced any document to show that the company, M/s.

Steel House Pvt. Ltd., has authorised him to file this complaint or

amendment application.

21. I find force in the argument of the learned State Brief that the

name of the complainant and the accused cannot be substituted at the

2025:KER:97606 appellate stage and that the amendment sought for does not relate to a