Kerala High Court: Conviction Under Section 138 NI Act Not Liable To Be Set Aside Merely Due To Defect In PoA Holder’s Complaint

The Kerala High Court has held that a conviction under Section 138 of the Negotiable Instruments Act cannot be set aside merely because the complaint filed through a power of attorney holder did not specifically state that the attorney holder had direct personal knowledge of the transaction. Justice G. Girish observed that such an omission is only a procedural irregularity and would not invalidate the conviction unless it resulted in a “failure of justice” under Section 465 CrPC.

The case arose from the dishonour of two cheques amounting to ₹29.75 lakh issued by the accused to the complainant. The Trial Court found the accused guilty under Section 138 NI Act and sentenced him to six months’ simple imprisonment along with payment of ₹29.5 lakh as compensation. The appellate court later confirmed both the conviction and sentence, following which the accused approached the High Court in revision.

Before the High Court, the accused argued that the prosecution itself was legally unsustainable because the complaint had been filed by the complainant’s power of attorney holder, who had not pleaded that she possessed direct personal knowledge of the transaction. Reliance was placed on the Supreme Court decisions in Narayanan A.C. v. State of Maharashtra and M/s Naresh Potteries v. M/s Aarti Industries.

Rejecting the contention, the High Court noted that the complainant himself had entered the witness box during trial and was cross-examined by the accused. The Court held that no prejudice or failure of justice had been caused to the accused. While upholding the conviction and compensation order, the Court modified the substantive sentence from six months’ imprisonment to imprisonment till the rising of the court in Kannan v. M/s Adisiva Enterprises.