Code of Criminal Procedure, 1973: s.482 – Dishonour of cheque – Respondent issued certain cheques in favour of the appellant company which on presentation were dishonoured by the bank – On respondent’s failure to comply with the demand notices, appellant filed the complaint before the Magistrate u/ss.138 and
142 of N.I. Act – Respondent filed petition u/s.482 before the High Court for quashing of complaint, which was allowed – On appeal, held: s.142(1)(a) of N.I. Act states that the complaint ought to be in writing and it should be filed by payee or the holder in due course – In the instant case, requirements were satisfied, firstly, complaint was filed in the name of the company i.e. the payee, through the General manager (Accounting) – Secondly, Managing Director of the appellant had duly authorized General Manager (Accounting) to institute proceedings and represent the company – The Managing director was delegated by the Board of Directors all the powers necessary for the management and operation of the company – Hence, the complaint u/s.138 NI Act was filed on the behalf of the payee company with due authorization – In respect of General Manager’s knowledge about the transaction or witness to the transaction, transactions between the parties were based on the agreement in which witness on behalf of appellant was none other than General Manager – Further, the document for reconciliation of account was attested by the representatives of the parties and appellant was represented by the General Manager – Moreover, when the cheques were dishonoured, it was the General Manager who issued the notices on the behalf of the appellant – Hence, the said documents and affidavit filed in lieu of oral sworn statements before Magistrate indicated that the appellant was represented by an authorized person who has knowledge about the transaction – Requirement of s.142 was satisfied – High Court was not justified in entertaining the petition u/s.482 – Negotiable Instruments Act, 1881 – s.142.
Negotiable Instruments Act, 1881: s.142 – When a company is the payee of the cheque based on which a complaint is filed under s.138 of N.I. Act, the complainant necessarily should be the Company which would be represented by an employee who is authorized – All that is necessary is to demonstrate before the Magistrate that the complaint filed is in the name of the “payee” and if the person who is prosecuting the complaint is different from the payee, the authorisation therefor and that the contents of the complaint are within his knowledge – If at all, there is any serious dispute with regard to the person prosecuting the complaint not being authorized or if it is to be demonstrated that the person who filed the complaint has no knowledge of the transaction and, as such that person could not have instituted and prosecuted the complaint, it would be open for the accused to dispute the position and establish the same during the course of the trial – In such circumstances entertaining a petition under s.482 to quash the order taking cognizance by the Magistrate would be unjustified when the issue of proper authorisation and knowledge can only be an issue for trial.
Allowing the appeal, the Court
HELD: 1. The Managing Director apart from himself being the key managerial personnel of the appellant company, has also been delegated the power by the Board of Directors through the document dated 06.04.1998. Through the said document the Managing Director has been delegated, in general, all powers necessary for the management and operation of the company and it has been specified among others, to exercise the power relating to important issues affecting the company’s land and property. Through the said document, the Managing Director is also empowered to delegate where necessary and to the extent required, any of the powers delegated to him, to his subordinate officers. The above noted documents would disclose that the complaint under Section 138 NI Act was filed on behalf of the “payee” company with due authorisation. [Para 11][280-B-E]
2. The next aspect on which the High Court has interfered is on accepting the contention that there is no averment in the complaint as to whether the General Manager (Accounting) had any knowledge about the transaction or he was a witness to the transaction. On the said aspect it is noted that the transaction between the parties is based on the agreement dated 18.07.2014. The said document depicts, below the signature of the executives representing the appellant and the respondent company, a witness each from either side have appended their signatures. The witness on behalf of the appellant company is none other than Mr. Subhasis Kumar Das who was at that point in time, designated as General Manager (Commercial). Further, the document for reconciliation of account spanning the period from 01.04.2011 to 30.09.2014, as carried out on 28.10.2014, depicts that the same was attested by the representatives of both the companies. The appellant company is represented by the General Manager (Accounting). That apart, when the cheques were dishonoured, it was the General Manager (Accounting) who had issued the notices on behalf of the appellant company, to the respondent company. The said documents would indicate that the person who had knowledge of the transaction and was witness to it, has been authorized and has instituted the complaint on behalf of the company. [Para 12][280-E-H; 281-A]
3. A meaningful reading of the affidavit filed before SDJM would indicate that the company having authorized the General Manager (Accounting) and the General Manager (Accounting) having personal knowledge had in fact been clearly averred. What can be treated as an explicit averment, cannot be put in a straitjacket but will have to be gathered from the circumstance and the manner in which it has been averred and conveyed, based on the facts of each case. The manner in which a complaint is drafted may vary from case to case and would also depend on the skills of the person drafting the same which by itself, cannot defeat a substantive right. However, what is necessary to be taken note of is as to whether the contents as available in the pleading would convey the meaning to the effect that the person who has filed the complaint, is stated to be authorized and claims to have knowledge of the same. In addition, the supporting documents which were available on the record by themselves demonstrate the fact that an authorized person, being a witness to the transaction and having knowledge of the case had instituted the complaint on behalf of the “payee” company and therefore, the requirement of Section 142 of N.I. Act was satisfied. [Para 14][282A-D]
4. When a company is the payee of the cheque based on which a complaint is filed under Section 138 of N.I. Act, the complainant necessarily should be the Company which would be represented by an employee who is authorized. Prima facie, in such a situation the indication in the complaint and the sworn statement (either orally or by affidavit) to the effect that the complainant (Company) is represented by an authorized person who has knowledge, would be sufficient. The employment of the terms “specific assertion as to the knowledge of the power of attorney holder” and such assertion about knowledge should be “said explicitly” as stated in A.C. Narayanan cannot be understood to mean that the assertion should be in any particular manner, much less only in the manner understood by the accused in the case. All that is necessary is to demonstrate before the Magistrate that the complaint filed is in the name of the “payee” and if the person who is prosecuting the complaint is different from the payee, the authorisation therefor and that the contents of the complaint are within his knowledge. When, the complainant/payee is a company, an authorized employee can represent the company. Such averment and prima facie material is sufficient for the Magistrate to take cognizance and issue process. If at all, there is any serious dispute with regard to the person prosecuting the complaint not being authorized or if it is to be demonstrated that the person who filed the complaint has no knowledge of the transaction and, as such that person could not have instituted and prosecuted the complaint, it would be open for the accused to dispute the position and establish the same during the course of the trial. In such circumstances entertaining a petition under Section 482 to quash the order taking cognizance by the Magistrate would be unjustified when the issue of proper authorisation and knowledge can only be an issue for trial. [Para 17][286-A-B]
A.C. Narayanan v. State of Maharashtra & Anr. (2014)
11 SCC 790 : [2013] 11 SCR 80; National Small Industries Corporation Ltd. v. State (NCT of Delhi) and Ors. (2009) 1 SCC 407 : [2008] 16 SCR 83; Samrat Shipping Co. Pvt. Ltd. v. Dolly George (2002) 9 SCC 455; Vinita S. Rao v. Essen Corporate Services (P) Ltd. (2015) 1 SCC 527 – relied on.
M/s. M.M.T.C. Ltd. v. Medchi Chemicals and Pharma (P) Ltd. (2002) 1 SCC 234 : [2001] 5 Suppl. SCR 265; Vishwa Mitter v. O.P. Poddar (1983) 4 SCC 701 : [1984]
1 SCR 176; Janaki Vashdeo Bhojwani & Anr. v.
Indusind Bank Ltd. & Ors. (2005) 2 SCC 217 : [2004]
6 Suppl. SCR 681– referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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