Appeal dismissed HON’BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY Crl.A.No.620 of 2018 and Crl.M.P.No.13614 of 2018 M/s.Seshasayee Paper & Boards Ltd. Rep. by its Vice President (Marketing)

by Sekar Reporter · December 5, 2025

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 26.11.2025

CORAM :

THE HON’BLE MR.JUSTICE D.BHARATHA CHAKRAVARTHY

Crl.A.No.620 of 2018
and Crl.M.P.No.13614 of 2018

M/s.Seshasayee Paper & Boards Ltd.
Rep. by its Vice President (Marketing)
Pradeep Kumar Vasist .. Appellant
Versus

M/s.3H Classics
Rep. by its Authorised Signatory,
C.H.Subba Rao .. Respondent

Prayer : Criminal Appeal filed under Sections 378 of Cr.P.C., to set aside the judgment, dated 14.02.2018 in Crl.A.No.68 of 2017 passed by the XIX Additional Sessions Court, Chennai – 1 and restore the judgment of the learned Metropolitan Magistrate, Fast Track Court – IV, George Town, Chennai – 1 in C.C.No.2898 of 2013, dated 01.03.2017.

For Appellant : Mr.V.Perumal

For Respondent : Mr.A.Natarajan,
Senior Counsel,
for Ms.Madhumathi

JUDGMENT

This Criminal Appeal challenges the judgment of the XIX Additional Sessions Court, Chennai, dated 14.02.2018, in Crl.A.No.68 of 2017. The Appellate Court overturned the conviction and sentence given by the Trial Court. Crl.A.No.68 of 2017 was filed by the respondent/accused, who was dissatisfied with the judgment of the learned Metropolitan Magistrate, Fast Track Court – IV, George Town, Chennai, in C.C.No.2898 of 2013, dated 01.03.2017. The Trial Court had found the respondent/accused guilty of an offence under Section 138 of the Negotiable Instruments Act, 1881, and sentenced him to six months’ Simple Imprisonment and a fine of Rs.11,88,199/-, representing the value of three dishonoured cheques, to be paid within one month of the judgment. In default of payment, he was to undergo an additional two months of Simple Imprisonment.

2. This is a private complaint filed by the appellant Company under Section 200 of the Code of Criminal Procedure. The case of the appellant/complainant is that it is the manufacturer of papers and boards and it also markets them all over India and abroad. The respondent/accused approached the appellant/complainant and purchased papers, namely, cup stock board on 05.03.2012 vide Invoice No.SPB/CMO/TNGST/IMP cum Stock/10-11/179/2115070205, for a total value of Rs.11,88,199/-. After several requests and demands made by the appellant/complainant, the respondent/accused, in discharge of the aforesaid liability, issued three cheques as follows:-
S.No Cheque No. Date Amount Drawn on
1. 100821 10.09.2012 Rs.3,00,000/- Federal Bank at Royapettah
2. 100822 20.09.2010 Rs.4,00,000/- Federal Bank at Royapettah
3. 100823 30.09.2012 Rs.4,88,199/- Federal Bank at Royapettah

3. The cheques were presented for collection by the appellant/complainant with their bankers on 17.10.2012. However, they were returned dishonoured with the endorsement ‘funds insufficient’ and a memo of dishonour dated 18.10.2012. The appellant/complainant received this intimation on 19.10.2012. As a result, the appellant/complainant issued a statutory notice on 06.11.2012, calling on the respondent/accused to pay the amount due under the cheques within 15 days of receiving the notice. The respondent/accused received the notice on 14.11.2012 but did not pay the amount within the statutory period, leading to the filing of the complaint.

4. Upon recording a sworn statement, the case was taken on file as C.C.No.2898 of 2013. After issuing the summons, providing copies, and questioning, the respondent/accused denied the allegations and stood trial. To establish guilt, the Power of Attorney Agent, the Vice President (Marketing) of the company, Pradeep Kumar Vasist, was examined as P.W.1. The Power of Attorney executed by the company’s Managing Director in favor of P.W.1 was marked as Ex.P-1. The invoice for the supplied goods is marked as Ex.P-2. The letter from the respondent/accused enclosing the three cheques, which are the subject of the complaint, was marked as Ex.P-3. The subject cheques are marked as Ex.P-4, Ex.P-5, and Ex.P-6. The dishonor memo is marked as Ex.P-7. The statutory notice is marked as Ex.P-8. The letter from the postal authorities confirming the service of the statutory notice was marked as Ex.P-9.

5. Upon being questioned under Section 313 of the Code of Criminal Procedure, regarding the material evidence and incriminating circumstances on record, the respondent/accused denied the allegations, claiming they are false and asserting that he is not liable to pay any money. Thereafter, the Trial Court considered the case of the parties. The Trial Court, after reviewing the evidence presented in paragraph No.12 of its judgment, concluded that the appellant/complainant had discharged his onus to prove the elements of the offence under Section 138 of the Negotiable Instruments Act, 1881. Subsequently, the Trial Court assessed whether the respondent/accused had raised a probable defence and fulfilled his burden of proof. It examined the arguments made by the respondent/accused, including those raised during cross-examination. The Court rejected the arguments regarding Ex.P-3, determining that it was merely a typographical error regarding the date, which should have been 2010. The Trial Court found that the Vice President (Marketing) was a duly authorized person. It dismissed the defence that the cheques were issued only as security and held that the respondent/accused failed to rebut the presumption. Consequently, the Court found the respondent/accused guilty of the offence and imposed the sentence as mentioned earlier.

6. Aggrieved thereby, the above Crl.A.No.68 of 2017 was filed by the respondent/accused. The Appellate Court held that the photocopy of the invoice cannot be accepted as evidence since there is no pleading that the original is not in the custody of the appellant/complainant or that it is misplaced, etc. The lower Appellate Court also found that there is no proof of delivery of goods to the respondent/accused. In the absence of any purchase order, original invoice, or delivery challan, the transaction is not proven by the appellant/complainant. The lower Appellate Court also observed that although the absence of a board resolution is merely a rectifiable defect, in the absence of rectification from the appellant/complainant and only the photocopy of the Power of Attorney being filed, the maintainability itself is questioned. For the above reasons, by concluding that the respondent/accused has rebutted the presumption to the level of preponderance of probability and by holding that the appellant/complainant has not proved its case, the conviction of the Trial Court was reversed and the respondent/accused was acquitted. Aggrieved by this, the present Criminal Appeal is filed.

7. Heard Mr.V.Perumal, learned Counsel for the appellant/complainant, and Mr.A.Natarajan, learned Senior Counsel for the respondent/accused.

8. Firstly, the learned Counsel for the appellant/complainant would submit that the lower Appellate Court erred in holding that the respondent/accused rebutted the presumption. In this case, no evidence whatsoever has been presented on behalf of the respondent/accused. Referring to the cross-examination of the appellant/complainant, the learned Counsel relies on the judgment of the Hon’ble Supreme Court of India in Rangappa Vs. Sri Mohan , specifically paragraph Nos.18 and 19, to argue that when the presumption relates to the existence of a legally enforceable debt, then the onus is on the respondent/accused to prove, on a preponderance of probabilities, that such a debt does not exist. Merely conducting a cross-examination on technicalities should not, by itself, be considered sufficient by the lower Appellate Court to meet the level of proof required to rebut the presumption. The Counsel further relies on paragraph No.14 of the judgment of the Hon’ble Supreme Court in Bharat Barrel & Drum Manufacturing Co. Vs. Amin Chand Payrelal , and the relevant portion of paragraph No.14 is extracted hereunder for quick reference:

“14. …The technicalities of law and procedural wrangles deprived the plaintiff of its due entitlement. The justice claimed by the plaintiff was buried under heaps of divergent legal pronouncements on the subject conveyed and communicated in sweetly-coated articulate language and the oratory of the persons which is shown to have been resorted to to present the rival claims. The approach adopted by the majority of the Judges in dealing with the case was contrary to the basic principles governing the law relating to negotiable instruments. Faith of the business community dealing in mercantile and trade cannot be permitted to be shaken by resort to technicalities of law and the procedural wrangles as appears to have been done in the instant case. Even though it is true that the plaintiff’s evidence was not believed yet we are of the opinion that the same could not be made the basis for rejecting its claim because obligation upon the plaintiff to lead evidence for the purposes of “to prove his case”, could not have been insisted upon because the defendant has prima facie or initially not discharged his onus of proof by showing directly or probabilising the non-existence of consideration.”

9. The learned Counsel for the appellant/complainant then addressed the technical pleas raised by the respondent/accused, which were partly accepted by the Appellate Court. First, regarding the cause title in the complaint, the learned Counsel pointed out that the body of the complaint clearly mentions the name of the respondent/accused, Subba Rao, in the short cause title. Thus, the omission in the preamble is merely a technical error. The Counsel further argued that since the Managing Director was duly authorized to execute a Power of Attorney on behalf of the appellant/complainant Company, and had executed Ex.P-1, the Power of Attorney, this sufficiently establishes that P.W.1 was entitled to represent the Company. Additionally, the absence of a board resolution is a hypertechnical issue or irregularity that can be easily rectified. The Counsel relied on the judgment of the Hon’ble Supreme Court of India in M.M.T.C. LTD. and Anr. Vs. Medchl Chemicals and Pharma (P) Ltd. and Anr. , particularly on paragraph No.12, to argue that the Company can rectify such defects at any stage of the proceedings. The relevant portion of paragraph No.12 is excerpted below for reference:
“12. …It has been held that it is open to the de jure complainant company to seek permission of the court for sending any other person to represent the company in the court. Thus, even presuming, that initially there was no authority, still the company can, at any stage, rectify that defect. At a subsequent stage the company can send a person who is competent to represent the company. The complaints could thus not have been quashed on this ground.”

10. The learned Counsel would also rely on the resolution now produced as an additional document before this Court, whereby the entire exercise has been ratified once again by the Board of Directors. In any case, he would argue that such technical considerations should not influence the respondent/accused’s liability for the amount that is otherwise due and payable. Regarding the service of notice, the learned Counsel again submits that initially, the letter received from the postmaster was marked as Ex.P-9. This clearly shows that the letter was received by the recipient. The name of the proprietary concern, namely, 3H Classics, and the address are correctly mentioned in the notice. When the name and address are correctly specified, then, when the postal authorities state that the notice is delivered, the Court should presume that it was delivered to Subba Rao, the respondent/accused. For this proposition, the learned Counsel relies on the judgment of the Hon’ble Supreme Court of India in C.C. Alavi Haji Vs. Palapetty Muhammed and Anr. , specifically referencing paragraph No.14 of that judgment, which invokes Section 27 of the General Clauses Act. The learned Counsel also relies on the judgment of the Hon’ble Supreme Court in Basant Singh and Anr. Vs. Roman Catholic Mission . The entire paragraph No.9 of the judgment that is relied upon is excerpted below for easy reference:-
“9. Order 5, proviso to sub-rule (2) of Rule 19-A CPC provides that where the summons are properly addressed, prepaid and duly sent by registered post with acknowledgement due, notwithstanding the fact that the acknowledgement having been lost or mislaid, or for any other reason, has not been received by the court within thirty days from the date of the issue of the summons, the court shall presume that notice is duly served. Further, Section 27 of the General Clauses Act, 1897 (in short “the Act”) provides similar provision. The presumptions are rebuttable. It is always open to the defendants to rebut the presumption by leading convincing and cogent evidence.”

11. Therefore, he would submit that once the notice is received by the respondent/accused, it should be presumed in the present case, especially considering the name contained in the subject matter cheques. The appellant/complainant has discharged his initial onus, and once the initial onus is discharged, the burden shifts heavily onto the respondent/accused. In this regard, the learned counsel relies on the judgment of the Hon’ble Supreme Court of India in Rajesh Jain Vs. Ajay Singh , specifically referencing paragraph Nos. 54 and 55 to argue about the standard of proof required when the respondent/accused discharges his onus to rebut the presumption.

12. If the respondent/accused fails to prove the case set up by him, then the case of the appellant/complainant is liable to be accepted. The learned Counsel also relied upon the judgment of the Hon’ble Supreme Court of India in TRL Krosaki Refractories Limited Vs. SMS Asia Private Limited and Anr. , specifically relying on paragraph No.23 to argue about the correctness of P.W.1 representing the Company. For the same proposition regarding the individuals representing the Company, the judgment of the Hon’ble Supreme Court of India in National Small Industries Corporation Limited Vs. State (NCT of Delhi) and Ors. is also cited. The relevant portion of paragraph No.14 of that judgment is extracted below.
“14. …If the payee is a company, necessarily the complaint should be filed in the name of the company. Section 142 of the NI 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 authorised and empowered to represent the company either by a resolution or by a power of attorney.”

13. Thus, relying on the above, he would argue that it is sufficient if a person is authorized either by a resolution or by a Power of Attorney, and both are not necessary. For all these reasons, the learned counsel would submit that this case warrants interference, as the appellant company supplied the goods, and after accepting the cheques has been left without any payment.

14. Mr.A.Natarajan, learned Senior Counsel for the respondent/accused, submits that on the merits of the case, the lower Appellate Court has clearly found that when the appellant/complainant claimed to have supplied the goods through invoices, the appellant/complainant failed to produce the invoices. Producing a photocopy without proper pleading or grounds to satisfy Sections 63 and 65A of the Evidence Act to admit secondary evidence is not sufficient. Therefore, the lower Appellate Court rightly rejected the photocopy. The learned Counsel also relies on the judgment of the Hon’ble Supreme Court of India in Smt.J.Yashoda Vs. Smt.K.Shobha Rani for this principle. The appellant/complainant did not file any delivery challan, nor was any document with the respondent/accused’s endorsement or signature produced to prove delivery of the goods.

15. Apart from this, the complaint itself was filed by naming ‘3H Classics’ as the accused. 3H Classics is the name of the proprietary concern and is neither a legal nor a natural person. Therefore, when a private complaint is filed against a non-entity, the complaint itself is not maintainable. The learned Senior Counsel relied upon the judgment of this court in S.K.Real Estates, represented by its Proprietor S.K. Krishnamoorthy and Anr. Vs. S.Ahmed Meeran , specifically relying on paragraph Nos.5 and 6 of that judgment. The learned Senior Counsel also submitted that for P.W.1, to represent the Company, only a photocopy of the Power of Attorney was marked. When the appellant/complainant is a company, the primary requirement for maintaining a complaint is that the company must authorize the concerned individual to represent it. The Power of Attorney was not given by the company but by the Managing Director. Unless there is a board resolution authorizing the Managing Director to execute a Power of Attorney, the complaint is not maintainable. The entire Board of Directors is the competent authority to decide on the representation of the company. Therefore, in the absence of the board’s resolution, the company’s complaint should be considered not maintainable. It may be true that the irregularity can be rectified, but despite cross-examination and arguments before the Trial Court and the lower Appellate Court, such rectification was not sought. Once the accused is acquitted on a particular ground, the Appellate Court cannot admit additional evidence under Section 361 of Cr.P.C., to fill gaps or negate the findings that led to the acquittal. Therefore, the additional evidence now produced cannot be admitted by this Court. In any case, it cannot be accepted without giving the respondent/accused an opportunity. Furthermore, even when reading the resolution, it does not properly authorize the person who executed the Power of Attorney to do so.

16. The learned Senior Counsel would then argue that even the statutory notice in this case has not been served on the respondent/accused. If the appellant/complainant wishes to prosecute the individual by name, Subba Rao, there must be proof of service of the statutory notice calling upon Subba Rao to pay the amount due under the cheque; otherwise, the prosecution itself becomes untenable. For all these reasons, the learned Senior Counsel contends that the judgment of the lower Appellate Court should not be interfered with by this Court.

17. I have considered the rival submissions made on both sides and reviewed the material records of the case.

18. At the outset, there can be no quarrel over the proposition that was argued by the learned Counsel for the appellant/complainant that the nature of the offence under Section 138 of the Negotiable Instruments Act, 1881, arises out of commercial transactions, and when in such transactions, the appellant/complainant accepts the cheque believing the promise made through the Negotiable Instrument, the presumption under the Negotiable Instruments Act, 1881, would be strictly enforced. The appellant/complainant should not be left high and dry on any hypertechnical points raised by the respondent/accused. Even if there is any error in the form, the appellant/complainant should be permitted to rectify it at any stage of the proceedings, and such an error should not be a ground for the respondent/accused to go scot-free after committing the offences. With this understanding, the submissions made by the learned Counsel for the respondent/accused, regarding the form of the complaint and the maintainability of the complaint through P.W.1, can be rejected by this Court. As far as the cause title of the complaint is concerned, the long cause title reads as follows:-
“M/s.Seshasayee Paper & Boards
Limited, rep: by its Vice President
(Marketing) Mr.Pradeepkumar Vasist
No.84 T.T.K. Road, Alwarpet,
Chennai – 600 018. .. Complainant
Vs.
M/s.3H Classics
Rep: by its Authorised Signatory,
No.4B Saraswathipuram,
2nd Main Road,
Nagalkeni,
Chrompet,
Chennai – 600 044. .. Accused”

19. However, in paragraph No.2 of the complaint, the accused is described as follows:-
“2. The Accused is M/s.3.H.Classics, represented by its authorised Signatory Mr.C.H. Subba Rao, son of Dharmaraj, Hindu, aged about 58 years and having his office at No.4 B Saraswathipuram, 2nd Main Road, Nagalkeni, Chrompet, Chennai – 600 044.”

20. Therefore, even if a mistake is made by the Counsel, it can only be technical in nature and does not affect the substantive right of the respondent/accused to defend the case, especially when summons are served on Subba Rao and he appears before the Court to contest the matter.

21. Similarly, regarding the maintainability of the complaint by allowing P.W.1 to represent the Company, a review of the Power of Attorney shows that in the preamble, it states that the Company executes the power, specifically M/s.Seshayee Paper and Boards Ltd., but it does not mention the person representing it. However, the signature includes a seal indicating it is for M/s.Seshayee Paper and Boards Ltd., as Chairman and Managing Director. In this regard, again, the contentions on behalf of the respondent/accused are formal and technical in nature. The cross-examination of P.W.1, although touching upon this issue, was not direct in establishing that there was no authority for the Chairman and Managing Director to execute the Power of Attorney in this regard. The employee’s personal knowledge of the transactions is pleaded. In view thereof, as held by the Hon’ble Supreme Court of Indian in TRL Krosaki Refractories Limited’s case (cited supra), when the perusal of the complaint shows in substance the authorisation of the payee of the cheque and knowledge of the transactions, then the complaint filed through the power of attorney is maintainable.

22. However, even according to the judgment relied upon by the learned Counsel for the appellant/complainant, it is evident that there are two stages in a complaint under Section 138 of the Negotiable Instruments Act, 1881. First, the onus rests on the appellant/complainant until the stage where the elements of the offense under Section 138 are proved. A review of paragraph Nos.18 and 19 of the Hon’ble Supreme Court of India’s Rangappa’s case (cited supra) clarifies this. Therefore, while the appellant/complainant has produced the cheque, the issue of statutory notice is addressed as follows:-
“M/s.3H Classics,
4-B, Saraswathi Puram,
2nd Main Road,
Nagelkeni,
Chrompet,
Chennai – 600 044.”

23. It is essential to advert to the judgment of the Hon’ble Supreme Court of India in C.C.Alavi Haji’s case (cited supra) and paragraph No.15 of the said judgment is extracted hereunder:-
“15. Insofar as the question of disclosure of necessary particulars with regard to the issue of notice in terms of proviso (b) of Section 138 of the Act, in order to enable the court to draw presumption or inference either under Section 27 of the GC Act or Section 114 of the Evidence Act, is concerned, there is no material difference between the two provisions. In our opinion, therefore, when the notice is sent by registered post by correctly addressing the drawer of the cheque, the mandatory requirement of issue of notice in terms of Clause (b) of proviso to Section 138 of the Act stands complied with. It is needless to emphasise that the complaint must contain basic facts regarding the mode and manner of the issuance of notice to the drawer of the cheque. It is well settled that at the time of taking cognizance of the complaint under Section 138 of the Act, the court is required to be prima facie satisfied that a case under the said section is made out and the aforenoted mandatory statutory procedural requirements have been complied with. It is then for the drawer to rebut the presumption about the service of notice and show that he had no knowledge that the notice was brought to his address or that the address mentioned on the cover was incorrect or that the letter was never tendered or that the report of the postman was incorrect. In our opinion, this interpretation of the provision would effectuate the object and purpose for which proviso to Section 138 was enacted, namely, to avoid unnecessary hardship to an honest drawer of a cheque and to provide him an opportunity to make amends.”
(Emphasis supplied)

Therefore, if the notice is addressed to the drawer of the cheque, then the presumption under Section 27 can be invoked, and the mandatory requirement would be considered fulfilled.

24. In this case, even the statutory notice is not addressed to the drawer of the cheque, but only mentions the name of the proprietorship concern. It should be noted that the complaint, in paragraph No.3, even casually refers to it as if it is a firm. Be that as it may, if at least the acknowledgment had been produced and if the said Subba Rao had actually received the notice outside of any mistake regarding the firm, the Court could have concluded that the requirement of calling upon the concerned accused/drawer of the cheque was substantially met. Unfortunately, in this case, the appellant/complainant did not have the actual acknowledgment at the time of filing the complaint, and even now, the appellant/complainant is only relying on confirmation from the postal authorities that the item was delivered. Therefore, however strong the suspicion that Subba Rao could have received and been aware of the statutory notice, with reference to a criminal case, the suspicion cannot take the place of the proof.

25. Regarding the ingredients of the offence, it is to be proved by the appellant/complainant, who must discharge the burden of proof. The appellant/complainant has to blame itself as it was misled by the manner of description in the cheque. It did not even consider verifying the entity named 3H Classics, nor did it describe the recipient as specified in paragraph No.2 of the complaint, which states that 3H Classics is represented by its authorized signatory, Subba Rao. Without proof of substantial compliance with the elements of the offence under Section 138 of the Negotiable Instruments Act, 1881, which requires the respondent/accused to be called upon to pay the amount due under the cheque, the stage for invoking the presumption under Section 139 does not arise. I am unable to concur with the learned counsel for the appellant/complainant regarding the statutory notice requirement. Consequently, the ultimate decision of the lower appellate court to acquit the respondent/accused cannot be reversed in this appeal against acquittal.

26. Accordingly, finding no merits, this Criminal Appeal stands dismissed. Consequently, the connected miscellaneous petition is closed.

26.11.2025
Neutral Citation : yes
grs

1. The XIX Additional Sessions Court,
Chennai – 1.

2. The Metropolitan Magistrate,
Fast Track Court – IV,
George Town, Chennai – 1.
D.BHARATHA CHAKRAVARTHY, J.

grs

Crl.A.No.620 of 2018
and Crl.M.P.No.13614 of 2018

26.11.2025