Name Of Complainant & Accused Can’t Be Substituted Now: Kerala High Court Upholds Acquittal In Cheque Bounce Complaint Filed 27 Years Ago

The High Court was considering an appeal filed by the complainant against the acquittal of the accused under Section 138 of the Negotiable Instruments Act, 1881 (NI Act).

The Single Bench of Justice Johnson John held, “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 appellate stage and that the amendment sought for does not relate to a curable infirmity that can be corrected by a formal amendment. Since the amendment sought for is having the effect of substituting the name of the complainant and the accused after 27 years of filing the complaint, I find that the same would cause prejudice to the accused and it cannot be allowed at the appellate stage. As noticed earlier, the trial court took cognizance of the offence against the mandate of Section 142(1)(a) of the N.I Act and therefore, I find that the amendment application and the appeal are liable to be dismissed.”

Advocate Johnson P. John represented the Appellant while Senior Public Prosecutor M.S. Breeze represented the Respondent.

Factual Background

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 a cheque for Rs 1,39,285.50. 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 the issuance of a statutory notice, the accused failed to pay the cheque amount to the complainant. The trial court found that there was no valid notice as contemplated under Section 138(b) of the NI Act and therefore, the complainant had not succeeded in proving the offence under Section 138 against the accused. Hence, the accused was acquitted.

Reasoning

The Bench noted that the complainant in cross-examination showed that the cheque involved in this case was previously presented for collection along with other cheques, and when the same was dishonoured, the notice was issued to the accused informing about the dishonour of the cheque and demanding payment of the cheque amount. In spite of notice, the accused had not paid the cheque amount and subsequently, the cheque was again presented for collection, and when the same was again dishonoured, the notice was issued.

Reference was made to the judgment of the Apex Court in MSR Leathers v. S. Palaniappan and Another (2012) wherein it has been observed 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. The Bench found that the findings of the trial court in this regard was not legally sustainable.

The Bench also reiterated 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 a complaint in their personal capacity. The Bench further noticed that the original complaint was filed in 1998, and an application seeking amendment was filed in 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”, it added.

The Bench found force in the argument that the name of the complainant and the accused cannot be substituted at the appellate stage and the amendment sought for does not relate to a curable infirmity that can be corrected by a formal amendment. Thus, the Bench dismissed the appeal.

Cause Title: Tenny Jose v. Managing Partner, New Metalised Agency (Neutral Citation: 2025:KER:97606)

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