Section 138 NI Act: Technical Omission In Complaint Filed By POA Holder Cured If Original Complainant Testifies During Trial; Kerala High Court

"The act of the learned Magistrate, taking cognizance of the offence on the basis of the complaint filed by the power of attorney holder of the complainant, had not resulted in the failure of justice... especially so in view of the fact that the complainant himself had adduced evidence at the stage of trial." Kerala High Court, in a significant ruling, held that a criminal prosecution under Section 138 of the Negotiable Instruments Act (NI Act) cannot be overturned merely because the Power of Attorney (POA) holder failed to plead direct personal knowledge in the complaint, provided the original complainant later testifies during the trial.

A single-judge bench of Justice G. Girish observed that such an omission is a curable irregularity under Section 465 of the Code of Criminal Procedure (CrPC) and does not constitute a "failure of justice" if the accused failed to raise the objection at the earliest possible stage.

The revision petitioner was convicted by the Chief Judicial Magistrate Court, Kollam, for the dishonour of two cheques totaling Rs. 29,75,000/- issued to M/s. Adisiva Enterprises. The complaint was originally filed through the proprietor's wife, acting as a Power of Attorney holder, but the proprietor himself appeared as PW1 during the trial to adduce evidence. The trial court and the appellate court concurrently found the petitioner guilty, sentencing him to six months of simple imprisonment and compensation, leading to the present revision petition before the High Court.

The primary question before the court was whether the entire criminal prosecution was legally unsustainable because the Power of Attorney holder did not explicitly state in the complaint that she had personal knowledge of the transactions. The court was also called upon to determine whether the protections under Section 465 CrPC prevent the reversal of a conviction based on such a technical pleading omission when no prejudice or failure of justice is demonstrated.

Distinction Between Early Challenge And Post-Trial Revision

The Court noted a marked difference between the factual scenario of this case and the Supreme Court precedents in Naresh Potteries v. Aarti Industries and Narayanan A.C. v. State of Maharashtra. In those cases, the orders of the Magistrate were challenged shortly after the issuance of process. The High Court observed that in the present case, there was no such prompt challenge, and the matter proceeded to a full trial where the evidence was tested.

"The dictum laid down by the Hon’ble Apex Court in the aforesaid decisions has no applicability in the present case as the original complainant himself adduced evidence during the course of trial."

Original Complainant's Testimony Cures Pleading Omissions

The Court emphasized that while the complaint filed by the POA holder (the proprietor's wife) did not state she had personal knowledge, the proprietor himself appeared as PW1. By relying on the proprietor's direct evidence regarding the transactions, the trial court properly arrived at the conviction. The bench noted that the petitioner had the full opportunity to cross-examine the original complainant on all aspects of the transactions alleged in the complaint.

"It is by relying on the aforesaid evidence that the Trial Court and the Appellate Court found the petitioner guilty, and the aforesaid conviction and sentence are not liable to be reversed in revision proceedings."

Section 465 CrPC Bars Reversal For Irregularities Not Causing Failure Of Justice

Referring to Section 465 CrPC, the Court explained that no finding or sentence shall be reversed on account of any error or irregularity in the complaint unless a "failure of justice" has been occasioned. The Court highlighted that sub-section (2) of Section 465 requires the court to consider whether the objection could and should have been raised at an earlier stage. Since the petitioner did not object to the cognizance before the commencement of the trial, he could not raise it later.

"The findings of conviction and sentence are not liable to be reversed unless it is shown that a failure of justice has, in fact, been occasioned due to the act of the learned Magistrate taking cognizance."

The Meaning Of 'Failure Of Justice'

Citing the Supreme Court in State of Karnataka Lok Ayukta Police v. Subbegowda, the Court noted that "failure of justice" is not a "pliable or facile expression" to be fitted into any situation. The bench observed that the legislature disfavours the axing down of proceedings or directing a de novo trial for mere technicalities. In this case, the fact that the complainant was cross-examined by the petitioner ensured that the trial was fair and that no prejudice was caused.

"The criminal Court, particularly the superior Court, should make a close examination to ascertain whether there was really a failure of justice or whether it is only a camouflage."

Modification Of Sentence

While upholding the conviction, the Court took a lenient view regarding the substantive sentence. Considering the nature and gravity of the offence, the Court reduced the sentence of six months' simple imprisonment to imprisonment "till the rising of the Court." However, the directions regarding the payment of compensation and the default imprisonment clause were retained to ensure the interests of the complainant were protected.

The High Court dismissed the revision petition regarding the conviction but modified the sentence. It reaffirmed that technicalities in the filing of a complaint by a POA holder cannot override substantive evidence recorded during a trial, especially when the accused participates in the trial without initial objection. The ruling underscores the principle that procedural irregularities do not vitiate a trial unless they result in a manifest failure of justice.

Date of Decision: 18 May 2026