Cheque Dishonour | Substitution Of Complainant & Accused Not Permissible At Appellate Stage: Kerala High Court

The Kerala High Court recently held that the names of the complainant and the accused cannot be substituted at the appellate stage by an amendment application as there is no enabling provision in the CrPC, specially when the amendment plea was moved 27 years after filing of the complaint. Justice Johnson John was considering an appeal filed by the complainant in a cheque dishonour case challenging the acquittal of the accused under Section 138 of the Negotiable Instruments Act, 1881.The complainant had alleged that the accused, one of the Managing Partners of a firm, purchased goods from the company in which he was a managing director and towards the payment of amount due, the accused issued a cheque in the year 1997 for around Rs. 1.4 crores. When the cheque was dishonoured, the appellant instituted proceedings against the accused. The trial court found that there was no valid notice as contemplated under Section 138(b) since the complaint was filed on the basis of a second notice after the cheque was dishonoured for second time. It had then acquitted the accused finding that the offence was not proved. The complainant came before the High Court in appeal.The appellant relied on MSR Leathers v. S. Palaniappan and Another [2012 (4) KHC 2] to contend that prosecution based on second default in payment of a cheque is permissible. Agreeing, the Court remarked:“The decision of the Honourable Supreme Court in MSR 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.”The State contended that a complaint regarding dishonour of cheque issued in favour of a company should be filed in the name of the company. However, in this case, it was in the name of its Managing Director. He relied on Naresh Potteries v. Aarti Industries to supplement this argument.The appellant pointed out that the memorandum and articles of association of the complainant's company names him as its Chairman-cum-Managing Director and it was only after the company's incorporation that the complaint was filed.The Court however noted that there was nothing to show that the complainant/appellant was authorized to file the complaint by the Directors of the company in whose favour the cheque was issued.Another argument raised by the accused was that the complaint was filed against the Managing Partner of the firm without disclosing his name or address. The Court referred to Section 142 NI Act, which deals with cognizance of offence. It also looked into the Supreme Court decision in Dhanasingh Prabhu v. Chandrasekar, wherein it was held that a when the offence under Section 138 is committed by a firm, the offence is committed by the partners of the firm and, not just the firm.Responding to the accused's argument, the appellant filed an application to amend the cause title of the complaint and the appeal memorandum by substituting the names of the complainant and the accused.However, the Court was not inclined to allow the same since it was filed 27 years after the institution of the complaint and it felt that allowing the application would prejudice the accused.“There is no enabling provision in the Criminal Procedure Code for entertaining an application for amendment of the complaint… 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,” the Court remarked.It thus dismissed the appeal and the application for substitution.Case No: Crl. Appeal No. 1867/2007Case Title: Tenny Jose v. Managing Partner, New Metalised Agency and Anr.Citation: 2026 LiveLaw (Ker) 23Counsel for the appellant: Johnson P. JohnCounsel for the respondent: M.S. Breeze - Sr. Public Prosecutor, Nidhin Raj Vettikkadan – State BriefClick to Read/Download Judgment

Cheque Dishonour | Substitution Of Complainant & Accused Not Permissible At Appellate Stage: Kerala High Court

K. Salma Jennath

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