Who can file complaint for offence under Section 138 of the Act and what are the facts which are required to be proved for establishing the offence?

Who Can File the Complaint

Section 142(a) of the Negotiable Instruments Act provides with unmistakable clarity that no court shall take cognizance of any offence punishable under Section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque. This is the sole eligibility criterion. The non-obstante clause preceding Section 142 operates primarily to exclude two things from the ordinary operation of the CrPC — oral complaints, and complaints by any person other than the payee or holder in due course. Anyone outside this bracket cannot set the criminal law in motion for this offence, no matter how aggrieved.

The Supreme Court in Vishwa Mitter v O.P. Poddar (AIR 1984 SC 5) laid down that while generally anyone can file a complaint of facts constituting an offence, when a special statute prescribes an eligibility criterion, the complainant must satisfy it. For Section 138, that criterion is confined entirely to the payee or the holder in due course.

Who is the Payee

The "payee" is the person in whose favour the cheque is drawn. Where the payee is an individual, the complaint must be in his name. Where the payee is a proprietary concern, as clarified by the Supreme Court in Shankar Finance and Investments v State of Andhra Pradesh (AIR 2009 SC 422; 2008 8 SCC 536), the complaint can be filed in three ways: by the proprietor describing himself as the sole proprietor of the payee concern; by the proprietary concern itself represented through its sole proprietor; or by the proprietor represented through an attorney-holder under a power of attorney. Where the payee is a company, being a juristic person, the complaint must be filed in the name of the company, represented through a de facto complainant who is a natural person authorised on its behalf — as held in Associated Cement Co. Ltd. v Keshvanand (AIR 1998 SC 596). The Supreme Court clarified in MMTC Ltd. v Medchl Chemicals and Pharma Pvt. Ltd. (AIR 2002 SC 182) that even if initially there was no authority, the company can at any stage rectify that defect. A partnership firm can file through any of its partners, since every partner is an agent of the firm, and the bar of Section 69 of the Partnership Act, which applies to civil suits, does not apply to criminal complaints.

Holder in Due Course

The "holder in due course" is defined in Section 9 of the Act as any person who for consideration became the possessor of a cheque, if payable to bearer, or the payee or indorsee thereof, if payable to order, before the amount became payable, and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title. The important point is that, for a cheque payable to order, a mere delivery without indorsement is insufficient to constitute a person as the holder in due course — indorsement is mandatory. The Kerala High Court in Anil Kumar S. v N. Ramakrishna Kartha (AIR 2009 NOC 1541 Ker) set aside a conviction precisely because the complainant had received the cheque from the payee's brother without any indorsement and therefore could not be said to be a holder in due course, making the cognizance itself invalid. However, once a cheque is dishonoured, it loses its negotiability; any indorsement made after dishonour cannot confer the status of holder in due course, as the Madras High Court held in Elangovan v Jagadeesan.

Filing through Power of Attorney

A heavily contested question — now authoritatively settled — is whether the complaint can be filed through a power of attorney holder. The Three-Judge Bench of the Supreme Court in A.C. Narayanan v State of Maharashtra (AIR 2014 SC 630) resolved the debate and held that filing of a complaint through a power of attorney is perfectly legal and competent. The power of attorney holder steps into the shoes of the payee or holder in due course. However, the power of attorney holder cannot file the complaint in his own name as if he were the complainant — he files it on behalf of the principal, whose name must appear as the complainant. Additionally, the power of attorney holder can depose and verify on oath only if he witnessed the transaction as an agent or possesses due knowledge of it, and this must be specifically asserted in the complaint itself.

Legal representatives of a deceased payee or holder in due course can also maintain a complaint, since under Section 53 of the Act, a holder deriving title from the holder in due course has all the rights of the original holder in due course.

Facts Required to Be Proved

The offence under Section 138 is a composite offence built from multiple ingredients, each of which must be established. To make a drawer liable, the following facts must be proved by the complainant:

First, that the accused drew a cheque on an account maintained by him with a banker. The cheque must be one drawn by the accused on his own account — a complaint is not maintainable against a person who was not the drawer of the cheque. In PJ Agro Tech Ltd. v Water Base Ltd. (AIR 2010 SC 2596), the Supreme Court affirmed that a complaint against persons who did not draw the cheque is not maintainable.

Second, that the cheque was drawn for the discharge, in whole or in part, of a legally enforceable debt or other liability. The Explanation to Section 138 clarifies that "debt or other liability" means a legally enforceable debt. A cheque issued as a gift, donation, or in discharge of a time-barred debt, or a debt illegal in nature, will not constitute an offence under this provision. Section 139 of the Act raises a statutory presumption — that the holder received the cheque for the discharge of a legally enforceable debt — but this is a rebuttable presumption which the accused can displace by proving on a balance of probabilities that the cheque was not issued in discharge of any debt.

Third, that the cheque was presented to the bank within six months from the date on which it was drawn, or within the period of its validity, whichever is earlier. A cheque presented beyond this period is stale and its dishonour does not give rise to an offence under Section 138.

Fourth, that the cheque was returned by the bank unpaid on account of insufficiency of funds in the account or because the amount exceeded the amount arranged to be paid from that account. It is now settled — following the Three-Judge Bench decision in Rangappa v Sri Mohan (2010) — that any endorsement by the bank leading to dishonour, and not merely "insufficient funds," is covered under Section 138, so long as the underlying reason is inadequacy of funds or breach of the overdraft arrangement.

Fifth, that the payee or holder in due course, on receiving information from the bank of the dishonour, issued a written demand notice to the drawer within thirty days of receipt of such information. The notice must demand payment of the cheque amount and must be issued by the payee or the holder in due course. In K. Bhaskaran v Sankaran Vaidhyan Balan (AIR 1999 SC 3762), the Supreme Court held that once the notice is dispatched to the correct address by registered post, the payee's part is done. A notice sent to a wrong address, however, is invalid. In cases where the company is the drawer, the notice must be served on the company, and in appropriate circumstances, on directors sought to be prosecuted, as settled in Aneeta Hada v Godfather Travels & Tours Pvt. Ltd. (2012 2 Crimes 229 SC).

Sixth, that the drawer failed to make payment within fifteen days of receipt of the notice. The cause of action — and therefore the right to file the complaint — ripens only upon this failure. Until the fifteen-day period expires, no offence is complete and any complaint filed before its expiry is premature and stillborn, as held in Rakesh Nemkumar Porwal v Narayan Dhondu Joglekar (1993 Cr LJ 680 Bom). It is only the failure to pay within this window that gives the drawer the character of an offender.

Seventh, that the complaint was filed in writing by the payee or holder in due course within one month of the date on which the cause of action arose — i.e., within one month from the day following the expiry of the fifteen-day notice period. The court has power under the proviso to Section 142(b) to condone delay on sufficient cause being shown.

Eighth, since mens rea is not an ingredient of the offence — as Section 140 expressly states, and as confirmed by the Bombay High Court in Mayuri Pulse Mills v UOI (1995) — the complainant need not prove any dishonest intention on the part of the drawer. The statute creates a regime of quasi-strict liability, and the proof of the above factual ingredients is sufficient to establish the offence. The burden then shifts to the accused to rebut the statutory presumptions under Sections 139 and 118 of the Act.

The Burden and the Presumptions

It is worth noting that this area of law operates under a unique burden-shifting regime. Once the complainant establishes the basic facts of the dishonour, the issuance of notice, and the failure to pay, Section 139 raises a presumption that the cheque was issued in discharge of a legally enforceable debt. This is a presumption of law, not merely of fact, and the accused must rebut it on a preponderance of probabilities — not beyond reasonable doubt. The Supreme Court in Rangappa v Sri Mohan clarified that the accused need not prove the absence of debt beyond reasonable doubt; a probable defence suffices to displace the presumption. This carefully calibrated structure — where the prosecution proves the mechanical facts and the accused bears the burden of a plausible rebuttal — reflects the legislature's policy of treating the dishonour of a cheque as presumptively blameworthy, while not converting the section into an instrument of oppression.