S.138 NI Act | Initial Defect In Authorisation To File Cheque Bounce Case Is Curable Defect: Gauhati High Court

The Gauhati High Court has reiterated that a complaint under Section 138 of the Negotiable Instruments Act cannot be invalidated merely because there was a defect in authorisation at the time of its institution, as such a defect is curable and can be rectified even during trial or at the appellate stage. Justice Sanjeev Kumar Sharma, presiding over the case, reiterated, “any initial defect as regards authorization at the time of initiation of the complaint is a curable defect which can be subsequently cured during the course of the trial or even at the appellate stage…”The complaint under Section 138 of the NI Act was instituted in the name of Gupta Hardware Private Limited, alleging dishonour of a cheque issued by the petitioner company. The complaint was filed through Manab Lahkar, who described himself as the Marketing Manager of the complainant company. The Judicial Magistrate, First Class, Kamrup (Metro), Guwahati took cognisance and issued summons.After prosecution evidence and defence evidence were closed, the complainant filed an application seeking permission to adduce additional evidence to bring on record a subsequent Board Resolution and a fresh General Power of Attorney. The Magistrate allowed the application, noting that the accused would have full opportunity to cross-examine the witness and that no prejudice would be caused.This order was then assailed before the High Court.The petitioner contended that the complaint was not maintainable as the complainant was not properly authorised at the time of institution. It was argued that the power of attorney produced initially suffered from infirmities and that there was no valid board resolution authorising the filing of the complaint. According to the petitioner, permitting subsequent documents amounted to filling up lacunae in the prosecution case.The High Court noted in its judgement, “Learned counsel for the respondent has virtually conceded that the said power of attorney suffered from infirmities, but the same have been subsequently cured by the resolution of the Board of Directors and fresh power of attorney.”The Court then clarified, “This also indicates that any initial defect at the time of institution of the complaint, whether with regard to the natural person instituting the complaint or with regard to the presence or absence of proper authority is a curable defect.”On the Magistrate's order permitting additional evidence, the Court found no illegality and held, “I do not find any infirmity in the impugned order of the Magistrate permitting the complainant to adduce additional evidence to bring on record the subsequent resolution of the Board of Directors and General Power of Attorney authorizing the complainant to institute the complaint.”Accordingly, the High Court dismissed the criminal petition.Case Title: M/s Amprolisa Construction and Marketing Pvt Ltd v. Gupta Hardware Private Limited and Another.Case No.: Crl.Pet./1263/2022, Click Here To Read Judgement

S.138 NI Act | Initial Defect In Authorisation To File Cheque Bounce Case Is Curable Defect: Gauhati High Court

Bhavya Singh

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