বাংলাদেশের ফৌজদারি বিচারব্যবস্থা ফৌজদারি কার্যবিধি এবং কিছু ক্ষেত্রে বিশেষ আইন আলাদা পদ্ধতি নির্ধারণ করে থাকলে ওই বিশেষ আইনের বিধান যারা পরিচালিত হয়। যদিও ফৌজদারি কার্যবিধির বিধান এবং বিশেষ আইন কোনও ব্যক্তিকে থানায় বা উপযুক্ত আদালতে ফৌজদারি মামলা দায়ের করার অনুমতি দিয়েছে, তবে ফৌজদারি কার্যবিধির ১৯৫ থেকে ১৯৯ ধারায় নির্দিষ্ট কিছু অপরাধের ফৌজদারি মামলা দায়েরের জন্য কিছু শর্ত অন্তর্ভুক্ত করা হয়েছে। উদাহরণস্বরূপ, পেনাল কোডের ১৭২ থেকে ১৮৮ ধারা অনুযায়ী কোনও অপরাধের মামলা দায়েরের জন্য সংশ্লিষ্ট সরকারি কর্মচারীকে একটি লিখিত অভিযোগ দায়ের করতে হয়; পেনাল কোডের ১৯৩-১৯৬, ১৯৯-২০০, ২০৫-২১১, ২২৮, ৪৬৩, ৪৭১ এবং ৪৭৫-৪৭৬ ধারা অনুসারে মামলা দায়েরের জন্য সংশ্লিষ্ট আদালতে লিখিত অভিযোগ দায়ের করতে হয়; পেনাল কোডের ষষ্ঠ বা নবম অধীনে বা ১০৮এ, ১২০বি, ১৫৩এ, ২৯৪৩, ২৯৫এ এবং ৫০৫ ধারার অধীনে দণ্ডনীয় অপরাধের মামলা দায়েরের জন্য জেলা ম্যাজিস্ট্রেটের নির্দেশে পুলিশ পরিদর্শক কর্তৃক প্রাথমিক অনুসন্ধান করার জন্য সরকারের অনুমতি নিয়ে হয়; বিচারক এবং সরকারি কর্মচারীদের বিচারের জন্য সরকারের পূর্ব অনুমোদন প্রয়োজন; উনিশ এবং একুশ অধ্যায়ের অধীনে বা পেনাল কোডের ৪৯৩ বা ৪৯৬ ধারার অধীনে অপরাধীর বিরুদ্ধে মামলা করার জন্য আক্রান্ত ব্যক্তির মামলা দায়ের করা প্রয়োজন এবং ৪৯৭ বা ৪৯৮ ধারার অধীনে অপরাধীর বিরুদ্ধে মামলা করার জন্য স্বামীকে মামলা দায়ের করতে হয়। [কবির সিকদার (মোঃ) বনাম রাষ্ট্র ও অন্য একজন, ২৫ বিএলসি (২০২০) ৫৮৮।
ব্যতিক্রমসাপেক্ষে আমমোক্তারমূলে মামলা দায়ের আমাদের ফৌজদারি বিচারব্যবস্থায় যেহেতু যে কোনও ব্যক্তি ফৌজদারি মামলা দায়ের করতে সক্ষম, তাই ফৌজদারি মামলা দায়েরের জন্য আমমোক্তারকে জড়িত করার দরকার নেই। তবে যেখানে আইনে বলা হয়েছে যে ফৌজদারি কার্যবিধির ১৯৮ ধারা অনুসারে কেবল সংক্ষুব্ধ ব্যক্তির দ্বারা বা ১৯৯ ধারা অনুযায়ী কেবল নির্দিষ্ট ব্যক্তির দ্বারা ফৌজদারি মামলা দায়ের করতে হবে, সেই সংক্ষুব্ধ/নির্দিষ্ট ব্যক্তি কর্তৃক মামলা দায়ের না করার কারণ স্পষ্টভাবে উল্লেখ করে আমমোক্তার সম্পাদন করার মাধ্যমে নিজপক্ষে কোনও তৃতীয় ব্যক্তির দ্বারা ফৌজদারি মামলা দায়ের করতে পারবেন। তবে আমমোক্তারের ক্ষমতার বিষয়ে এই কথা মনে রাখা উচিত যে তিনি অন্য কোনও প্রাসঙ্গিক সাক্ষীর ন্যায় তার নিজের অবস্থান থেকে সাক্ষী হিসেবে বিচার-আদালতের সামনে সাক্ষ্য দিতে পারবেন, তবে আদালতের সামনে নিজেকে সংক্ষুব্ধ বা ওই সুনির্দিষ্ট পাওয়ার অব অ্যাটর্নি সম্পাদনকারী বলে চিত্রিত করার চেষ্টা করবেন না। কবির সিকদার (মোঃ) বনাম রাষ্ট্র ও অন্য একজন, ২৫ বিএলসি (২০২০) ৫৮৮
Authority to File Complaint
Known well, it is the company is a legal entity, not
having soul, mind, body and limbs to walk to the court for preference of a
complaint for the alleged refraction or violation of the provisions of section
138 of the Negotiable Instruments Act. The company as such has to be
represented by some human agency in preferring a complaint before the court.
There is no express or explicit provision in the Act as to in what manner the
company is to be represented in preferring a complaint before the court for the
alleged refraction or violation of the provisions under section 138 of the Act.
The dictates of commonsense, practical wisdom, prudence and expedience impels
the court in such a situation to enable the company to represent a compliant
before the court represented by some person connected with the affairs of the
company. The person connected with the affairs of the company in the normal run
of things, may be either its manager, partner, managing partner or director or
any other person authorised by the company, who can represent it during the
course of legal proceedings before the court. Only by making such a
construction and interpretation of the provisions of the aforesaid sections the
provisions of the Act can be made to work and life thereby given, having teeth
for the enforcement of the provision or any other interpretation given would
have the effect of making no sense of those provisions, and will be only in the
sense of defeating the very object for which the provisions had been enacted by
the Legislature.
Sagayadurai And Others vs J.D. Electronics 1997 (1) ALT Cri 753, 1999 95 CompCas 337 Mad, 1997 (2) CTC 478
Author: M Karpagavinayagam
The definition of "company" under the Negotiable Instruments Act indicates any body corporateincluding a firm which indicates that the company as such has to be represented by some human agency in preferring a complaint before the court. The company, though it is a legal entity, does not have a soul, mind, body and limbs to walk to the court for preference of a complaint. The dictates of common sense, practical wisdom, prudence and experience impel the court in such a situation to allow the company to present a complaint before the court represented by some person connected with the affairs of the company. The person connected with the affairs of the firm, the company, in the normal run of things, may be either its manager, partner, managing partner or director or any other person authorised by the company.
Swadharma Swarajya Sangha vs Indian Commerce And Industries 1999 98 CompCas 151 Mad, (1998) IMLJ 724
Karnataka High Court
M/S Canara Workshops Limited vs Shri.Mantesh
On 27
September, 2013 Author: Anand Byrareddy
IN THE HIGH COURT OF KARNATAKA,
DHARWAD BENCH
DATED THIS THE 27TH DAY OF SEPTEMBER, 2013
BEFORE THE HON'BLE MR. JUSTICE ANAND BYRAREDDY
CRIMINAL APPEAL No.2653/2008 BETWEEN:
M/s Canara Workshops
Limited,
Mangalore, through their
branch
Office in New Cotton
Market Hubli,
Represented by its branch
in-charge
And Power of Attorney
holder
Shri Maxim Miranda,
Age: Major, R/o Hosur,
Hubli. ...APPELLANT
(By Shri.Dinesh M Kulkari, & R.B.Naik,Advocates) AND:
Shri Mantesh,
Age : Major,
Prop: M/s Mantesh
Automobiles,
Bijapur Road,
Athani,
Belgaum District. ...RESPONDENT
(By Shri.Anant P Savadi,
Advocate)
2
This Criminal Appeal is filed under
Section 378 of the Code of Criminal Procedure, 1973 praying to call for the
entire records pertaining to C.C.No.2017/2006 on the file of the JMFC II Court,
Hubli and etc.
This appeal having been heard on
19.9.2013 and coming on for Pronouncement of Judgment this day, the Court
delivered the following:
JUDGMENT
This appeal is filed by the
complainant, who had alleged an offence punishable under Section 138 of the
Negotiable Instruments Act, 1881 (Hereinafter referred to as ' NI Act' for
brevity), against the respondent.
2. The appellant is a company incorporated under the
Companies Act, 1956. It is engaged in thebusiness of manufacturing automobile
spring leaves in the name and style of M/s Canara Springs. Its head office is
at Mangalore and one of its branch offices is at Hubli. The respondent -
accused was said to be a dealer in automobile spare parts, having his place of
business at Athani and was purchasing the goods manufactured by the appellant
on credit basis. That as per the books of account maintained by the appellant,
the accused was said to be due in a sum of Rs.70,294/payable towards the credit
purchases, as on 31.8.2004. Since there was delay in making payments, the
complainant had issued a notice seeking prompt payment. It transpires that a
part payment was made in cash and the respondent had issued a cheque for the
balance amount of Rs.65,294/- in discharge of the amount outstanding. The
cheque when presented for collection, was dishonoured for want of funds. When
the respondent was informed of the same, he had requested for time to pay the
amount and ultimately issued a cheque endorsed in blank with instructions to
the appellant to present the same for collection in the third week of February,
with due information to the respondent. Therefore, the same was presented as
per the instructions of the respondent while indicating the date of the cheque
as 22.2.2006 and presented the same through the appellant's banker and the same
was dishonoured. Therefore, a notice was issued in terms of Section 138 of the
NI Act within the time prescribed and since there was non-compliance with the
demand, a complaint was filed. The same was contested.
One of the objections raised was
that the complaint was not brought by an authorised person to represent the
company and therefore the complaint could not be entertained apart from raising
contentions as to the validity of the transaction, etc.
3. The court below while addressing the complaint on
merits, has considered the point whether thecomplaint was filed and prosecuted
by a person competent to represent the complainant - company and has answered
the same in the negative, while also answering other questions, as regards the
transaction, also in favour of the respondent and consequently acquitted the
accused - respondent. It is that which is under challenge in the present
appeal.
4. After having heard the learned Counsel for the
appellant and the respondent and afterconsidering the case law that was cited,
at the bar, the question as to whether the complaint was filed and prosecuted
by an authorised person to represent the complainant - company if answered in
the negative, the other points arising in the case may not require to be
considered. It is only if it is held otherwise that this court may have to
examine other aspects. Therefore, the focus of the rival contentions was
directed towards this aspect of the matter.
There are divergent views expressed
by several High Courts on the above point. Some of the views expressed are
noted below.
In Gopalakrishna Trading Company
vs. D.Baskaran, (1994)80 Company Cases 53 Madras, in addressing the question as
to what would be the procedure to be followed in the case of a complaint by a
company, in terms of Section 138 of the NI Act, where the complaint was lodged
by the Manager of a company, the following view was expressed:
"Known well, it is the company is a legal
entity, not having soul, mind, body and limbs to walk to the court for
preference of a complaint for the alleged refraction or violation of the
provisions of Section 138 of the Negotiable Instruments Act. The company as
such has to be represented by some human agency in preferring a complaint
before the Court. There is no express or explicit provision in the Act as to in
what manner the company is to be represented in preferring a complaint before
the Court for the alleged refraction or violation of the provisions under
Section 138 of the Act.
The dictates of commonsense,
practical wisdom, prudence and expedience impels the court in such a situation
to enable the company to represent a complaint before the court represented by
some person connected with the affairs of the company. The person connected with
the affairs of the company in the normal run of things, may be either its
manager, partner, managing partner or director or any other person authorised
by the company, who can represent it during the course of legal proceedings
before the court. Only by making such a construction and interpretation of the
provisions of the aforesaid sections the provisions of the Act can be made to
work and life thereby given, having teeth for the enforcement of the provision
or any other interpretation given would have the effect of making no sense of
those provisions, and will be only in the sense of defeating the very object
for which the provisions had been enacted by the Legislature."
In Sagayadurai and Others vs.
J.D. Electronics, [1999]95 Company Cases 337 Madras, the view expressed in
Gopalakrishna, supra, was followed.
In Swadharma Swarajya Sangha vs.
Indian Commerce and Industries Company Private Limited, [1999] 98 Company Cases
151 Madras, a division bench of the Madras High Court, however, has taken a
view that a suit filed, without there being any resolution by the Board of
Directors, was not filed by an authorised person and was not maintainable.
In Shakthi Concrete Industries Limited and others vs.
Valuable Steels (India) Limited, [2000]100 Company Cases 429, a single judge of
the Madras High Court has reaffirmed the view taken in
Gopalakrishna, supra, on the
following reasoning:-
"24. There is no dispute in the concept that
the company being by itself a legal person as a payee or a holder in due
course, alone could file the complaint under Section 142 of the Negotiable
Instruments Act. It is also not in dispute that a director or a manager in his
individual capacity cannot be said to be a payee or a holder in due course in
terms of Section 142(a) of the Act.
25. But in the instant case, as per the cause title and the
averments, the complainant company hasapproached the court through some human
agency, namely, a director of the company, in preferring the complaints, as the
company has no soul, mind, body and limbs. If the company approaches the court
through some other person, who is not connected with the affairs of the
company, then necessarily it has to authorise that person to file the complaint
on its behalf. Therefore, in this case, the company being the complainant
through its director is competent to file the complaints even without any
authorisation.
26. This concept could be inferred by looking from some
other angle also. The Act does not provideany mode as to how a complaint can be
filed by and on behalf of the company. However, under Section 141(1) of the
Act, if the offence is committed by the company under Section 138 of the Act,
it is provided that every person who, at the time the offence was committed,
was in charge of, and was responsible to, the company for the conduct of the
business of the company, as well as the company, shall be deemed to be guilty
of the offence and shall be liable to be proceeded against and punished
accordingly.
27. Sub-section(2) of Section 141 provides that in case, it
proves that the offence has been committedwith the consent or connivance of, or
is attributable to, any neglect on the part of, any director, manager,
secretary or other officer of the company, such director, manager, secretary or
other officer shall also be deemed to be guilty of that offence and shall be
liable to be proceeded against and punished accordingly.
28. Thus, from the reading of Section 141 of the Act, so
far as the firm or any other company or acorporate body is concerned, a person
who was in charge of, and was responsible to, the company shall be guilty of
the offence for the purpose of Section 138 of the Act.
29. On the basis of Section 141 of the Act though it
contemplates a case in which company is anaccused, on the basis of the same
analogy, even in the case of company being the complainant, it can be inferred
that the person who can file a complaint on behalf of the company would be a
person who is in charge of, or was responsible to, the company. In other words,
he must be a person whose actions would be binding on the company."
Incidentally, the decisions of the Andhra Pradesh High Court to the contrary in
Satish and Company vs. S.R.Traders, [1999]95 Comp Cases 836, and Swastik
Coaters Private Limited vs. Deepak Brothers, [1997]89 Company Cases 564, has
not been followed and it is declared in the above decision of the Madras High
Court that the said decisions do not lay down the correct law.
In Medchl Chemicals and
Pharmaceuticals Private Limited and others vs. Minerals and Metals Trading
Corporation Limited, [2002]108 Company Cases 24 Madras, the very High Court has
however taken a divergent view ignoring its earlier decisions and following the
opinions expressed by other High Courts and the Supreme Court thus:-
"26. It will be appropriate
to refer to some of the rulings on this point, so that in the background of law
enunciated in those rulings, a better appreciation of the case on hand can be
made to see whether the magistrate was justified in taking cognizance of the
complaint. The Andhra Pradesh High Court has held in the decision in (1977) 1
ALT (Crl.) 696 that a complaint is to be filed on behalf of a company by a
person, who is in charge of or was responsible to the company. He must be a
person whose action would be binding on the company and the said person must be
empowered by law so as to bind the company. It was a case, where the
authorisation was not filed on the date when the complaint was filed, but it
was filed one year later. It was further held that the subsequent authorisation
does not validate the complaint, and since on the date of the complaint there
was no valid authorisation in favour of the complainant, there was no valid
complaint and hence the accused were acquitted.
27. Referring to a complaint laid by the Sanitary Inspector
of Calcutta Corporation, their Lordshipsof the Supreme Court held in the
decision in Ballabhdas Agarwala v. Chakravarthy (J.C.) (1960) MLJ (Crl.) 677
that the absence of complaint by the Commissioner or the chairman or a duly
delegated authority cannot be said to be a mere defect or irregularity which
could be cured under Section 537 of the Criminal Procedure Code and it affected
jurisdiction and initiation of proceedings.
28. Justice Thangamani, has held in the decision in K.N. Shankaranarayanan
v. Shree Consultationsand Services Pvt. Ltd. MANU/TN/0077/1994: (1993) IIMLJ298
that when a director institutes petition on behalf of company without proof of
authorisation, the invalidity cannot be cured by later ratification and therefore,
such a petition is not maintainable. The Andhra Pradesh High Court again held
in the decision in Satish and Co. v. S. R. Traders (1997) 4 AII MR 58; (1999)
95 Comp Cas 836 that complaint filed by the company represented by its manager,
who is not authorised to file the complaint, is not maintainable. Subsequent
authorisation in favour of the manager will not revive the prosecution. The
case reported in Ruby Leather Exports v. K. Venn MANU/TN/0086/1993 related to a
complaint filed by a manager. As the records did not disclose any
authorisation, it was held that taking cognizance of the impugned complaint was
barred under Section 142(a) of the Negotiable Instruments Act.
29. The Supreme Court has held in the ruling reported in
Vishwa Mitter v. O. P. PoddarMANU/SC/0378/1983: 1984 CriLJ 1, that it is thus
crystal clear that anyone can set the criminal law in motion by filing a
complaint of facts constituting an offence before a magistrate entitled to take
cognizance under Section 190 and unless any statutory provision prescribes any
special qualification or eligibility criteria for putting the criminal law in
motion, no court shall take cognizance of the sole ground that the complainant
was not competent to file the complaint. The Patna High Court has held in the decision
in BOC India Ltd. v. Zinc Products and Co. Pvt. Ltd. (1996) 86 Comp Cas 358
that since the board of directors of the petitioner-company had not passed a
resolution authorising the area sales manager to institute a petition for
winding up the respondent-company, the petition filed by him is not
maintainable.
30. The Delhi High Court has held in the decision in Nibro
Ltd. v. National Insurance Co. Ltd. (1991) 70 Comp Cas 388 (headnote):
"... that the powers of a company in respect of a particular matter are to
be exercised by the company in general meeting, in all other cases the board of
directors are entitled to exercise all its powers... It is true that ordinarily
the court will not nonsuit a person on account of technicalities. However, the
question of authority to institute a suit on behalf of a company is not a
technical matter. It has far-reaching effects. Order 29, Rule 1 of the Code of
Civil Procedure, 1908, does not authorise persons mentioned therein to
institute suits on behalf of a corporation. It only authorises them to sign and
verify the pleadings on behalf of the corporation. Thus, unless a power to
institute a suit is specifically conferred on a particular director, he has no
authority to institute a suit on behalf of the company. Such power can be
conferred by the board directors only by passing a resolution in that
regard."
In S.Sankaran vs. Emkay Aromatics
Limited, [2001]107 CompCas 130 Mad., it is again reiterated that the complaint
is maintainable, though filed without the authorisation of the company, since
the representative who had brought the complaint was closely connected with the
affairs of the company.
In C.B.S.Gramaphone Records and
Tapes (India) Limited vs. P.A.Noorudeen, [1992]73 Company Cases 494 (Kerala), a
single judge of the Kerala High Court has held that a complaint brought by a
person as representing the company could be entertained, while dealing with a
situation where the Magistrate had returned the complaint as the complainant
was described as the Company represented by its Accounts Officer while passing
an order to the following effect:-
" The complainant is neither
the payee nor the holder in due course. Hence returned."
The High Court however has taken
the view that the complainant being a company, it can act only through an
authorised representative and had directed the Magistrate to take on file the
complaint and to examine the complainant as the representative of the company,
while leaving open the privilege of the respondent therein to raise all valid
defences as regards the authorisation of the person representing the company.
5. Insofar as this court is concerned, there are three
reported decisions, namely, Menon Ventures vs.Birla 3M Limited, ILR 2005
KAR.3167; Director Maruti Feeds and Farms Private Limited vs. Basanna Pattekar,
ILR 2007 KAR.3155 and Om Shakthi SC/ST and Minority Credit Co-operative Society
Limited vs. M.Venkatesh, ILR 2007 Kar.5126, holding the view that the company
being a juristic person, any person on behalf of the company would have to be
authorised by the company in the Articles of Association or by a separate
resolution to depose on behalf of the company.
Section 142 of the NI Act lays
down 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. If the payee is a
corporate body or a company incorporated under the Companies Act, in terms of
Section 291 of the Companies Act, 1956, it is the Board of Directors who are
entitled to exercise all powers as the company is authorised to exercise and
do. Thus, a company, though a legal entity, can act only through its Board of
Directors (See: National Small Industries Corporation Limited vs. Harmeet Singh
Paintal, (2010)3 SCC 330).
Under Section 291 of the
Companies Act, except where express provision is made, that the powers of a
company in respect of a particular matter, are to be exercised by the company
in a general meeting. The individual directors have such powers only as are
vested in them by the Memorandum and Articles of Association. The question of
authority to institute a suit or other proceeding on behalf of a company is
therefore not a technical matter as it often affects the policy and finances of
the company and unless the power to institute a proceeding is specifically
conferred on a particular director, he would have no authority to institute a
suit or other proceeding on behalf of the company and such power can be
conferred by the Board of Directors only by passing a resolution in that
regard.
It may also be seen that even in
respect of civil suits, under Order XXIX Rule 1 of the Code of Civil Procedure,
1908 (Hereinafter referred to as the 'CPC', for brevity), in a suit by a
Corporation, any pleading may be signed and verified on behalf of the
Corporation by the Secretary or by a Director or other principal officer of the
Corporation, who is able to depose to the facts of the case. This would
indicate that the said provision merely prescribes that any pleading on behalf
of a Corporation may be signed and verified by its Secretary or by its Director
or by any other principal officer, who is able to depose to all the facts of
the case. It does not empower such a officer to conduct the case on behalf of
the Corporation, for which, such officer must be authorised by the Board of
Directors by a resolution or must be empowered under the Memorandum and
Articles of Association to bring a suit.
6. One other aspect that requires to be kept in view when
the authorisation to file a complaint onbehalf of a company is called in
question - is that the court of the Magistrate ought not to reject the
complaint at the threshold if no such authorisation accompanies the complaint -
but ought to proceed as indicated by the apex court in the following decision.
In Samrat Shipping Company
Private Limited vs. Dolly George, (2002)9 SCC 455, the facts were that the
appellant - company had filed a complaint before the Court of the Magistrate
for an offence punishable under Section 138 of the NI Act. The Magistrate
dismissed the complaint on the ground that there was no resolution of the Board
of Directors of the petitioner - Company authorising a person who represented
the company before the Court of the Magistrate. A revision petition was filed
before the Sessions Court unsuccessfully, challenging the order and thereafter
the High Court had been moved invoking Section 482 of the Code of Criminal
Procedure, 1973 (Hereinafter referred to as the 'Cr.PC', for brevity). The
learned Single Judge of the High Court had also dismissed the petition, though
a copy of the resolution, showing that the company had authorised a particular
individual to present the complaint before the court, was produced; On the
ground that it was a matter of grave doubt as to such a resolution would enure
to the benefit of the petitioner as it was not a civil suit, but a criminal
prosecution and authorisation to prosecute being in the nature of sanction, the
Board of Directors of a company are required to apply their mind to the facts
and circumstances before authorising any person to prosecute any other for any
offence and since such a document was being produced for the first time before
the High Court. The apex court however held that a company can file a complaint
only through human agency. The person who presented the complaint on behalf of
a company having claimed that he was an authorised representative of the
company prima facie the trial court should have accepted it at the time when
the complaint was presented. If it is a matter of evidence, when the accused
disputed the authority of the said individual to present the complaint, opportunity
should be provided to the complainant to prove the same. But that opportunity
need be given only when the trial commences. The dismissal of the complaint at
the threshold on the premise that the individual has not produced a certified
copy of the resolution, in the view of the apex court, was too hasty an action
and accordingly set aside the impugned order and directed the trial court to
proceed with the trial and to dispose of the same in accordance with law.
7. Applying the above, in the present case on hand, it is
found as a fact by the trial court that ageneral power of attorney Exhibit
P.14, by one Premanath Guruva, the Executive Director of the complainant,
executed in favour of PW.1 was sought to be produced as a proof of
authorisation. The trial court has observed that the said power of attorney was
in respect of civil litigation and there was no specific authority to file a
complaint under Section 138 of the NI Act and that there was no proof of the
fact that the said Premanath Guruva was the Executive Director of the company
and that he himself had any authority to file a complaint or execute a power of
attorney in terms of Exhibit P.14 in favour of PW.1 and hence held that the
complaint filed through the medium of PW.1 and sought to be prosecuted through
the said Guruva, was not maintainable.
Therefore, having regard to the
view of the law that is consistently followed by this court, the reasoning of
the trial court insofar as the point whether the complaint was brought by an
authorised person, has been correctly decided and hence the acquittal of the
accused on other grounds, as well, cannot be held to be illegal.
The appeal is dismissed.
Sd/-
JUDGE nv
Gopalakrishna Trading Co. vs D. Baskaran
Sagayadurai And Others vs J.D. Electronics
Satish And Company vs S.R. Traders And Ors.
Andhra High Court
Satish And Company vs S.R. Traders And Ors. on 28 November, 1996
Equivalent citations: 1997 (1) ALD Cri 745, 1997 (1) ALT Cri 696, 1999 95 CompCas 836 AP, 1998
CriLJ 419
Bench: B Raikote JUDGMENT
1. This appeal is preferred by the complainant by name M/s. Satish and company being aggrieved by the judgment and order dt. 31-12-1994 passed by the III Metropolitan Magistrate, Hyderabad in C.C. No. 229 of 1993. By the impugned order, the Court below acquitted the accused for the offence under S. 138 of the Negotiable Instruments Act (for short 'the Act'). The learned counsel appearing for the appellant strenuously contended that the entire approach of the Court below is totally erroneous and on the basis of the material recorded an offence is constituted under S. 138 of the Act and as such, the impugned order is liable to be set aside and the accused are liable to be convicted for the offence they are charged with. The learned counsel appearing for the respondents supported the order.
2. In order to appreciate the rival contentions it is necessary for me to notice the facts of the case.
3. It is alleged by the complainant that A-1 is the firm and A-2 to A-4 are its partners. The accused were purchasing goods from the complainant on credit basis and A-1 was accordingly issuing the cheques for the goods purchased. In relation to such a transaction, the accused issued cheque dated 9-6-1993 for an amount of Rs. 81,450/- drawn on State Bank of India, Begum Bazar Branch, marked in the case as Ex. P. 2. The accused also issued two other cheques dated 11-6-1993 for an amount of Rs. 82,700/- marked as Ex. P. 3 and the third cheque dated 10-6-1993 for an amount of Rs. 82,200/- marked as Ex. P. 4. The latter two cheques were drawn on A.P. Mahesh Co-operative Urban Bank Limited, Begum Bazar. The complainant accordingly presented the cheques to the Banks but the Banks returned Ex. P. 2 on 11-6-1993 vide bank Memo Ex. P. 5, and Ex. P. 3 was returned on 14-6-1993 under bank endorsement Ex. P. 6 and Ex. P. 4 cheque was also returned on the same day i.e. on 14-6-1993 vide bank endorsement Ex. P. 7. All these cheques were returned by the Banks on the ground of 'insufficient funds and effect not cleared'. Thereafter, the complainant issued a notice dated 18-3-1993 vide Ex. P. 8 and the same was received in time by the accused and accordingly the accused also gave reply to the said notice vide Ex. P. 9 dated 3-7-1993. Since the accused did not pay the amount within fifteen days as per S. 138 of the Act, the complainant filed a complaint on 20-7-1993. On the same day, after examining the complaint, the Court has taken the cognizance of the offence and proceeded with the trial of the case. On behalf of the Company, its manager by name Naresh Kumar has been examined as P.W. 1. On the appreciation of the entire material the Court below has acquitted the respondents, for the offence under S. 138 of the Act. It is in these circumstances, the complainant has come up to this Court by way of this appeal.
4. The learned counsel for the appellant contended that the entire approach of the Court below is in error. He elaborated his argument contending that the Court below was wrong in holding that the complainant was incompetent to lodge the complaint. He submitted that the complainant is M/s. Satish and Company and the complaint was filed through its Manager Sri Naresh Kumar. It is stated
in the cause title of the complaint that it was filed by M/s. Satish and Company by its Manager. Therefore, the Court below is not right in holding that such a complaint was not made by a competent person. At any rate, he submitted that Ex. P. 1 though filed after one year authorising the Manager to initiate proceedings either civil or criminal, it cannot be said that the Manager was not competent to file the present complaint. On the other hand, the learned counsel for the respondents submitted that the alleged authorisation Ex. P. 1 was not filed along with the complaint but it was filled after one year of the filing of the complaint and as such the fact remains that as on the date of filing of the complaint, no such authorisation letter was filed. Therefore, the complaint, as filed on 20-7-1993 itself was not maintainable and filing such authorisation if any later, would not cure the legal infirmity. Therefore, he submitted that the Court below is correct in holding that the complaint was not competent and accordingly it has rightly acquitted the accused.
5. Having regard to this kind of controversy, the short point that arises for my consideration is whether the complaint filed by and on behalf of the company under the name and style M/s. Satish and Company was competent as on the date of filing the same i.e. as on 20-7-1993 and what is the effect of the alleged authorisation letter, Ex. P. 1 in favour of P.W. 1 filed after one year.
6. In order to appreciate the rival contentions I have to note a few admitted facts. It is an admitted fact that the complaint in question was filed by M/s. Satish and Company represented by its Manager, Mr. N. K. Gupta. It is also an admitted fact that along with the complaint no letter or any resolution of the company was filed to show that the Manager was authorised to file the complaint. It is also not in dispute that a letter said to have been dated 17-6-1993 is filed in the case vide Ex. P-1 after one year of filing of the complaint. Now the short question, therefore would be whether the complaint was competent as on the date of filing of the complaint, i.e. as on 20-7-1993, and whether Ex. P-1 can be taken as the ratification on behalf of the Company for the action taken by the Manager P.W. 1 in filing the complaint and even if it is so, would it be a valid ratification.
7. In order to consider these points, I have to necessarily refer to some of the provisions of the N.I. Act.
8. From this section, it follows that the offence under S. 138 is made non-cognizable and such an offence can be taken cognizance of only upon a complaint made by the payee or the holder in due course. According to the three cheques marked as Exs. P-2, P-3 and P-4 the payee is M/s. Satish and Company. Therefore, the complaint should have been filed by M/s. Satish and Company. Such a complaint also could be filed by a person who is a holder in due course of the cheque. The Manager cannot be construed to be a person holder in due course of the cheque in terms of the definition of 'holder in due course' found under S. 9 of the Act. Therefore, it is only M/s. Satish and Company alone who is entitled to file a complaint. But the Company being a corporate body and it breathes its life only through authorised officers or agents and if that is so, any officer of the company who is duly authorised by the company to initiate proceedings can file a complaint for and on behalf of the company.
9. The learned counsel for the complainant submitted that the complaint being filed by the Manager being one of the officers of the company was competent as on the date of the filing of the complaint. But the learned counsel for the respondent submitted that a Manager can file the complaint only if he is duly authorised by the Company and for that purpose he has to produce with the complaint any authorisation letter or power of attorney and he submitted that in the instant case, the complainant did not file anything of that sort when the complaint was filed. Therefore, as on the date of the filing of the, complaint it was an incompetent complaint and not validly instituted and on the basis of such a complaint, the Court is not entitled to take cognizance of the offence.
10. I have given a very anxious consideration to the case. The Act does not provide any mode as to how a complaint can be filed by and on behalf of the company. However, under S. 141 of the Act, if the offence is committed by a company under S. 138 of the Act, it is provided that "every person who, at the time the offence was committed, was in charge of, and was responsible to the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to he proceeded against and punished accordingly. A proviso added to 141 (1) further states that :
"Nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence."
Sub-clause (2) of S. 141 further provides that, in case it is proved that the offence has been committed with the consent or connivance attributable to any neglect on the part of any director, manager, Secretary or other officer of the Company, such Director, Manager, Secretary or other officer of the company shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Under the explanation "Company" has been defined as body corporate including a firm and other association of individuals" and a 'Director' in relation to a firm is also defined as 'a partner in the firm.'
11. Thus, from the reading of S. 141 of the Act, so far as the firm or any company or a corporate body is concerned, a person who was incharge of or was responsible to the Company shall be deemed to be guilty of the offence for the purpose of S. 138 of the Act.
12. On the basis of S. 141 of the Act, though it contemplates a case in which a company is an accused, on the basis of analogy, even in case of company being the complainant it can be inferred that the person who can file a complaint on behalf of the company would be a person who is incharge of or was responsible to the company. In other words, he must be a person whose actions would be binding on the company.
13. Section 26 and 27 of the N.I. Act also deal with similar situations in relation to promissory notes, bills, cheques, etc. Under S. 26 of the Act.
"Every person capable of contracting, according to the law to which he is subject may bind himself and be bound by the making, drawing, acceptance, indorsement, delivery and negotiation of a promissory note, bill of exchange or cheque."
The proviso to S. 26 of the Act further adds that :
"Nothing herein contained shall be deemed to empower a corporation to make, indorse or accept such instruments except in cases in which, under the law for the time being in force, they are so empowered."
14. From these sections, it is clear that such a person to bind the corporation or a company must be a person empowered by law so as to bind such corporation. For instance, in case of companies registered under the Companies Act, the memorandum of article itself may specify as to who should institute or defend proceedings for and on behalf of the company and such an authorised person can file a complaint. There may be another person who acts as an agent capable of binding himself or of being bound, as mentioned in S. 26 of the Act "duly authorised agent acting in his name". A proviso to S. 27 further provides that :
"A general authority to transact business and to receive and discharge debts does not confer upon an agent the power of accepting or indorsing bills of exchange so as to hind his principal and any authority to draw bills of exchange does not of itself import an authority to indorse."
15. From this section a further principle evolves that "a duly authorised agent" can also file a complaint, suit or any legal proceedings in the competent court of law. In other words, he must be such a person that his actions would bind the company which he represents, whether he is called a Manager, Secretary or by any other designation.
16. In fact, corporations being only inanimate legal persons necessarily have to act through such authorised persons and on the basis of an authority under any law or under specific instrument such person can sign the pleadings and file or defend proceedings for and on behalf of such corporation or a company.
17. In this context Order XXIX, Rule 1 of CPC also deserves to be noted and it reads as under :
"In suits by or against a corporation, any pleading may be signed and verified on behalf of the corporation by the Secretary or by any director or other principal officer of the Corporation who is able to depose to the facts of the case."
18. Interpreting the import of Order XXIX of CPC in "M/s. Kalpaka Shrimp Exports v. Kerala Financial Corporation" held that any officer generally or specially authorised by the Board in that behalf could be regarded as the "Principal Officer of the Corporation". The High Court of Delhi in "M/s. Nibro Ltd. v. National Insurance Co. Ltd." , held that for the purpose of Order XXIX, CPC unless a power to institute a suit is specifically conferred on a particular director, he has no authority to institute a suit on behalf of the company. As held by the High Court of Punjab and
Haryana in "Hindustan Petroleum Corporation Ltd. v. Sardar Chand" , such authorisation could also be by way of delegation of powers to the other officers, under any statute, or rule authorising them to file a suit, appeal, etc.
19. From the above analysis of the general principles of law regarding corporations and companies it follows that under S. 142 of the Act, a complaint can be filed by the payee or by the holder in due course or by their duly authorised officer. To the same effect is also the law declared by the High Court of Madras in "M/s. Ruby Leather Exports v. K. Venu Rep. Vandana Chemicals etc. (1994) 1 Crimes 820. In this case, the High Court of Madras considered a batch of petitions filed under S. 482 of Cr. P.C. seeking quashing of the proceedings on the ground that the complaints under S. 138 of the Negotiable Instruments Act were filed by or on behalf of certain firms and companies without due authorisation. The point that was raised for consideration was as under :
"Can a power of Attorney Agent or a person authorised in writing by payee or holder in due course be competent to make a complaint in writing under S. 142(a) of the Negotiable Instruments Act to facilitate valid cognizance being taken by the Magistrate ?"
20. After considering the judgment of the Hon'ble Supreme Court and other High Courts the High Court of Madras held as under :
"Whenever the statute, required a particular act to be done personally, it stood so mentioned. The law laid down by Paripoornan, J. is one more indication, that when the statute, does not insist, that the complaint should be filed personally by the payee or the holder in due course, such a meaning cannot be read into it. There cannot be any dispute, that when the law specified, that an act should be done in that way, and not in any other way. Once there cannot be any doubt, that the power of Attorney agent is virtually the payee himself or the holder in due course, it cannot be construed, that the Act of filing a complaint by a power of Attorney, is done in a way not contemplated by S. 142(a) of the Act. It will not be possible to hold, on the analogy of S. 141 of the Act, which refers to offences by companies, that such of those persons contemplated therein, will also be competent to file complaints, when the statute is silent on that aspect. If a power of Attorney Agent can act instead of an individual payee or a holder in due course, it will equally be competent for a power of Attorney Agent of a company, explained under S. 141 of the Act, meaning anybody corporate including a firm or other association of individuals, to file a complaint, on behalf of the company.
The answer to the question posed, is that a Power of Attorney Agent of the payee or the holder in due course of the cheque, will be competent to make a complaint in writing under S. 142(a) of the Negotiable Instruments Act, to facilitate valid cognizance being taken by the Magistrate."
21. After enunciating the principle, as above, the High Court of Madras quashed those proceedings in which no authorisation was filed along with the complaint (and dismissed the criminal petitions in which either authorised or power of attorneys were filed for and on behalf of the payee at the time of filing of the complaint.).
22. At this stage, I may also notice the other contention of the learned counsel for the appellant herein that in the instant case, the Manager being an employee of the company is deemed to be authorised to file the complaint. But, according to me the powers of the Manager are slightly different from that of the Managing Director of a company. A Managing Director may derive his powers from the articles of association directly or for certain other acts he may be authorised to do so, but in case of a Manager such powers may be traced either to his appointment order or to specific authorisation given to him regarding a particular aspect or aspects of the business. It is quite common that there are Purchase managers, entitled to make only purchases and there are Sales managers authorised only to sell the commodities etc. Therefore, on the basis of designation that one is it cannot be inferred that he has all the powers of the firm or a company or any corporate body including the power to file the complaint. The designation 'Manager' does not clothe a person with all the powers to file a suit and defend the suit or file a complaint for or on behalf of the company. In fact, dealing with a similar situation, the High Court of Madras in "Sudesh Kumar Sharma v. Selvamani" (1994) 4 Cur Cri R 2374 held that a person who is competent to file a complaint under S. 138 of the Act must be a payee or a holder in due course. It further held that by no stretch of imagination, a Manager of the company can be said to be a payee or a holder in due course. Therefore, unless there is specific authorisation, a complaint filed by such manager was incompetent. However, the learned counsel for the appellant tried to distinguish that case by contending that in that case the complaint was filed by Selvamani in his individual capacity but not as a Manager though he described himself as a Manager. But, according to me, the facts of the case do not matter much for proper appreciation of the principle of law that such a Manager should be an authorised person. Even if the cause title of the complaint describes the company as the complainant through the Manager, the point for consideration would be whether such a complaint is competent without such authorisation. According to me even if the company is the complainant represented by its Manager, such Manager shall necessarily be an authorised Manager so that the Magistrate can take cognizance of the offence. Thus, in my humble opinion, the other decision of the High Court of Madras in "M/s. Gopalakrishna Trading Co. v. D. Baskaran" 1992 (1) Mad WN (Cri) 236 : 1992 (Supp) MWN (Cr) Mad (sic) that a manager is competent to institute complaint without any authorisation by the company cannot be taken as laying down correct law.
23. The next question that arises in this case is that even in such cases where proper authorisation letter or power of attorney was not filed, along with the complaint, whether the company can ratify such actions later or whether such authorisation letter can be filed later so as to regularise the irregular proceedings.
24. The learned counsel for the appellant-complainant brought to my notice that in this case Ex. P-1, a letter, authorising the Manager to institute the proceedings was filed after one year and on that basis he submitted that the defect, if any, in filing the complaint stands cured and therefore the complaint was properly instituted. I am afraid that this contention also cannot be accepted for more than one reason. If there was no proper authorisation as on the date of filing of the complaint, the Court could not have taken cognizance of the offence since it was not a proper complaint in terms of
S. 142(a) of the Act.
25. The object of law in all such cases, that the complaint or suit shall be filed by a person duly authorised, is that, such proceedings will definitely have financial consequences on the company so as to bind the company for the actions of such persons. A company which suffered, a decree or order, at the hands of such a person, who was not duly authorised, may repudiate the order and decree of a competent Court as not binding. Even in criminal cases an aggrieved person may also file a suit for malicious prosecution in case a false complaint was filed. Even in such cases also the company may take up a plea that it was not bound by the actions of a particular officer on the ground that he was not duly authorised in that behalf. Therefore, a principle has emerged that any legal proceedings whether criminal or civil shall be instituted by the company through its authorised officers, so as to bind the company. In this view of the matter, therefore, there shall be a proper initiation of the proceedings by filing a proper complaint so that the Court may take cognizance of the same and if the complaint, as filed, was not maintainable as on the date of its filing, it was liable to be dismissed and subsequent ratification cannot revive it. For this principle, I am supported by a judgment of the High Court of Madras in "K. N. Sankaranarayanan v. Shree Consultations" (1994) 80 Com Cas 558. In that case, one of the Directors filed a petition for prevention of oppression and mismanagement on behalf of the company without the approval of the Board of Directors and on that basis it was contended that such a suit instituted without the authority of the Board was incompetent. Negativing the contention of the other side in that case, that subsequently, a letter of consent to file the petition under Ss. 397 and 398 of the Companies Act was given, the Court held that any cause instituted without the authority makes it invalid from its inception and cannot be validated by a later ratification and accordingly the proceedings initiated by one of the Directors without the resolution of the company was dismissed as not maintainable. In this context, I further make it clear that in terms of S. 142 of the Negotiable Instruments Act, another duly authorised complaint could be filed in time i.e. within one month from the date of cause of action. In this view of the matter, Ex. P-1, a letter of authorisation filed after one year cannot be taken as a proper ratification of the action initiated by P.W. 1. Because if it is taken that on the date of Ex. P-1, letter (filed after one year), a duly constituted complaint is filed, it would be barred by limitation of one month prescribed by S. 142 of the Negotiable Instruments Act. Moreover nothing prevented the complainant to withdraw the complaint himself voluntarily and file another complaint with proper authorisation within the time permitted by S. 142 of the Act.
26. For the above reasons, I do not find any illegality or infirmity in the order of the Court below and hence I pass the order as under :
27. The Criminal Appeal is dismissed.
28. Appeal dismissed.