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Madras High Court · body

2001 DIGILAW 161 (MAD)

N. Kannan, Vice President (Operations), S and S Industries and Enterprises Ltd. , Madras and another v. Agri Development Finance (Tamil Nadu) Ltd. represented by its Vice President, K. Srinivasan

2001-02-12

A.RAMAMURTHI

body2001
ORDER: Crl.O.P.Nos.15488 and 15496 of 1999 are filed by the petitioners/A-2 and A-3 in C.C.Nos.4172 of 1999 and 4171 of 1999 on the file of the V Metropolitan Magistrate, Egmore to quash the proceedings under Sec.482 of Crl.P.C. 2. Crl.O.P.Nos.13772 and 13773 of 1999 have been filed by the petitioners/A-2 to A-5 in C.C.Nos.5122 and 2546 of 1999 on the file of the XVIII Metropolitan Magistrate, Saidapet, under Sec.482, Crl.P.C. to quash the proceedings. 3. Crl.R.C.No.615 of 2000 has been filed under Sec.397, Crl.P.C. read with Sec.401, Crl.P.C. by the petitioners/ accused in C.C.No.2546 of 1999 aggrieved against orders dated 2.6.2000 wherein the substitution petition was allowed. For disposal of these applications, the case in brief is as follows: 4. The respondents in the respective petitions have filed complaints under Secs.138 and 142 of the Negotiable Instruments Act against these revision Petitioners relating to dishonour of cheques. C.C. Nos.4171 and 4172 of 1999 were filed by the respondent- company represented by its Legal Assistant, Mr.G.Anbumani, C.C. Nos.2546 of 1999, 5122 and 5137 of 1998 have been filed by the respondent/ complainant, viz., Agri Development Finance (Tamil Nadu) Limited represented by its Vice President M.K. Srinivasan. 5. The complainant Company is the payee in all the cases. A competent person must legally represent the company and it must be brought in records. There are no applications in the company relating to authorisation or Board of Resolution to enable the person to file a complaint on behalf of the company. According to Sec.142 of the Negotiable Instruments Act, no Court shall take cognizance of any offence punishable under Sec.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 complaint is not preferred by a competent person, it cannot be construed as a proper complaint as per law and the learned Magistrate ought not to have taken cognizance of such complaint. The company, being a fictitious person, can authorise a person legally by way of Resolution of the Board. Unless there is Board of Resolution with a deed of Power of Attorney, the Court cannot proceed on authorisation. Though power of Attorney has been mentioned in the list of documents, there is nothing specific in the statement of the company. The company, being a fictitious person, can authorise a person legally by way of Resolution of the Board. Unless there is Board of Resolution with a deed of Power of Attorney, the Court cannot proceed on authorisation. Though power of Attorney has been mentioned in the list of documents, there is nothing specific in the statement of the company. The legal assistant can be considered as a person who was incharge of the affairs of the payee- company. He is not a Managing Director, authorised by way of resolution of the Board and his action may not be binding on the payee-company. In short, there are no clear averments in the complaint relating to the authorisation or power. 6. Regarding the other three cases, it has been stated that the company is represented by its Vice President by name Mr.K.Srinivasan and an authorisation letter has also been produced. In the sworn statement, it was stated that Srinivasan was working as Vice President and he received an authorisation to lodge the complaint. Without the resolution of the Board and in the absence of the proof that the person is mentioned as Managing Director of the Company, he has no right to maintain the complaint and therefore, the learned Magistrate ought not to have taken cognizance. No document has been produced to substantiate the same and no Board of Resolution has been produced before the Court. The alleged authorisation letter produced by Mr.K.Srinivasan is not an extract of the Board of Resolution. The date, number and any other particulars have not been furnished or disclosed. Under such circumstances, the proceedings initiated by the complainants and the respective complaints are illegal and the cognizance taken by the Magistrate is also basically wrong and under Sec.482, Crl.P.C. all these proceedings are liable to be quashed. 7. The criminal revision case has been filed by the accused alleging that the learned Magistrate has erred in allowing the application without giving an opportunity to the petitioner to file a counter. The substitution petition was filed by the complainant and notice was given to the other side. However, the Court below has passed an order alleging that other side has no objection, which is patently wrong. The counsel for the accused never made an endorsement and in fact, sought time only to file counter. The substitution petition was filed by the complainant and notice was given to the other side. However, the Court below has passed an order alleging that other side has no objection, which is patently wrong. The counsel for the accused never made an endorsement and in fact, sought time only to file counter. The Board of Resolution dated 19.4.2000 in favour of one Mr.V.Singaravelan, authorising him to pursue the complaint in the place of the Original Power of Attorney Agent, Mr.S.Madhu is only to fill up the lacunae. In short, on the strength of the Managing Director of the Company and in order to ratify the act of the Managing Director, on the strength of the Board Resolution dated 19.4.2001, substituting Mr.Singaravelan in the place of Mr.Madhu, the application has been filed. The learned Magistrate, allowed the application for substitution and as the resolution goes to the root of the matter and virtually it ratifies the earlier act of the complainant, the company has no locus standi to execute the same and as such, the order passed by the learned Magistrate dated 2.6.2000 is liable to be set aside. 7-A. The learned counsel for the respondents/ complainants in the respective petitions contended that authorisation letter has been filed in some cases and power of Attorney has been filed in some cases. So far as the substitution is concerned, notice was already given to the counsel for the petitioners and as they have stated no objection, the substitution petition was allowed. When evidently the documents in the nature of Power of Attorney or authorisation has been filed, the question whether they are valid and binding are matters that could be considered in the course of trial. The contention of the petitioners cannot be accepted and the complaint cannot be thrown out on these grounds. The grounds now raised by the petitioners are matters that have to be decided on the basis of evidence and opportunity has to be given to the respondents to establish the same. 8. The petitioners are almost same in all the petitions and only the complainants are different. The disputes between the parties relate to the maintainability of the complaint and as the issues involved in all the cases are the same, a common Order is pronounced. The parties hereinafter will be referred to as they are described in the complaints to avoid the confusion. 9. The disputes between the parties relate to the maintainability of the complaint and as the issues involved in all the cases are the same, a common Order is pronounced. The parties hereinafter will be referred to as they are described in the complaints to avoid the confusion. 9. The points that arise for consideration are: (1) Whether the complaint filed by the respective complainants are maintainable under law? (2) Whether the complaints are liable to be quashed under Sec.482 of Crl.P.C.? (3) Whether the order of Substitution passed in favour of the complainant dated 2.6.2000 is proper and correct? 10.Points: There is no dispute that C.C.Nos.4171 and 4172 of 1999 have been filed by the company represented by it legal Assistant/ Mr.G.Anbumani similarly, C.C.No.2546 of 1999, 5122 and 5137 of 1998 are filed by the complainant company, represented by its Vice President, Mr.K.Srinivasan. These complaints have been filed by the respondents for the alleged offence under Secs.138 and 142 of the Negotiable Instruments Act relating to the dishonour of the cheques issued by the petitioners. 11. The learned counsel for the revision petitioners mainly contended that no Court shall take cognizance of any offence punishable under Sec.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. Unless the company prosecutes the complaint on proper legal grounds, it cannot be a valid complaint in the eye of law. Admittedly, the company is a fictitious person and the complaint has been filed by Mr.K.Srinivasan, as Vice President of the Company and he had also received an authorisation to lodge the complaint before the learned Magistrate. It is stated that the respondent-company has not been properly represented to file a complaint and no resolution of the Board has been filed and in the absence of such proof, the only conclusion that can be drawn is that all these complaints are not maintainable under law and as such, the said proceedings are not maintainable under Sec.482, Crl.P.C. The alleged authorisation letter produced by Mr.K. Srinivasan is not an extract of the resolution of the Board. Only if the Board takes a decision on behalf of the company, authorising a particular person to prosecute, the proceedings can be initiated. Only if the Board takes a decision on behalf of the company, authorising a particular person to prosecute, the proceedings can be initiated. There is no specific averments in this complaint that the person authorised has been really authorised by the Board to prosecute the complaint against the petitioners. 12. The complainant in C.C.No.2546 of 1999 filed an application for substitution of the complainant. The substitution petition was allowed after giving notice to the accused and they have stated no objection. The counsel for the accused would contend that they have not made any endorsement and in fact, sought time to file counter. The resolution of the Board dated 19.4.2000 in favour of Mr.K.Singaravelan, authorising him to pursue the complaint in the place of Mr.S.Madhu the Original Power of Attorney Agent is virtually filling up the lacunae. The Original Complaint was preferred by Mr.S.Madhu on the strength of the Power of Attorney executed by the Managing Director of the company, for which he has no locus standi to execute power of Attorney. In order to ratify the act of the Managing Director, the present application for substitution on the strength of the Board of Resolution dated 19.4.2000, the said application has been filed. By ordering substitution in the place of Mr.Madhu and adding Mr.Singaravelan, it goes to the root of the matter and virtually, it ratifies the earlier act of the complainant, more particularly, the complaint initiated by the Power of Attorney Agent, executed by the Managing Director of the Company has no locus standi to execute the same. As such, the Order of the learned XVII Metropolitan Magistrate is unsustainable and liable to be set aside. 13. The learned counsel for the petitioners mainly relied upon the language employed under Sec.142 of the Negotiable Instruments Act and contended that the present complaints filed by the respective respondents/ complainants are not maintainable under law. No Board Resolution has been filed by the complainant to prove the alleged authorisation. Although Power of Attorney has been filed and even for that, no Resolution has been passed by the Board. It is further stated that as the complaints have been filed by the persons not authorised under law, all these applications are not maintainable and the learned Magistrate cannot take cognizance of these complaints. Under such circumstances only, the aforesaid Crl.O.Ps. have been filed by invoking Sec.482, Crl.P.C. to quash these proceedings. 14. It is further stated that as the complaints have been filed by the persons not authorised under law, all these applications are not maintainable and the learned Magistrate cannot take cognizance of these complaints. Under such circumstances only, the aforesaid Crl.O.Ps. have been filed by invoking Sec.482, Crl.P.C. to quash these proceedings. 14. The learned counsel for the petitioners/ accused relied on a Bench Decision of this Court in Swadharma Swarajya Sangha v. Indian Commerce & Industries Co. P. Ltd., 1998 M.L.J. (Crl.) 724, relating to O.29, Rule 1, C.P.C. wherein the suit was instituted by the Director of the Company without authorisation by the Board of Directors and as such, it was held that the suit was not maintainable. The language employed under O.29, Rule 1, C.P.C. would make it clear that only authorised person is entitled to file a suit and only under such circumstances, such a decision was made. It has no application to the case on hand and the language employed under Sec.142 of the Negotiable Instruments Act was completely different. 15. The learned counsel for the petitioners relied on M/s.Sathish & Co. v. M/s.S.R. Traders, 1998 Crl.L.J. 419, that the complaint by the company must be filed by a person whose actions would be binding on company. Person designated as manager is not necessarily competent to file complaint and specific authorisation in that behalf is necessary. Subsequent ratification filed after prescribed period of limitation cannot revive the said complaint. They also relied on K.Sankaranarayanan and another v. Shree Consultations and Services P. Ltd. and others, s (1994)80 C.C 558 , that petition to be filed by Director on behalf of Company. Power must be specifically conferred on Director. Director instituting petition on behalf of company without proof of authorisation. Invalidity cannot be cured by later ratification. This decision has also come under O.29, Rule 1, C.P.C. 16. The learned counsel also relied on Boc India Ltd. v. Zinc Products and Co. Pvt. Ltd., (1996)86 C.C. 358 , that relates to Secs.291 and 433 of the Companies Act, 1956, wherein petition filed by the Company for winding up another company, Authority to file must be given by resolution of Board of Directors. If petition is filed by the persons not so authorised, it is not maintainable. Pvt. Ltd., (1996)86 C.C. 358 , that relates to Secs.291 and 433 of the Companies Act, 1956, wherein petition filed by the Company for winding up another company, Authority to file must be given by resolution of Board of Directors. If petition is filed by the persons not so authorised, it is not maintainable. This relates to winding up of another company and as such, the resolution of Board of Directors was considered to be necessary and hence this decision is not applicable to the case on hand. 17. Reliance is also placed on Nibro Ltd. v. National Insurance Company Ltd. (1991) 70 C.C. 388 , wherein it is stated that the director must be authorised to file suit by resolution and this relates to a suit filed by the company and as such, it has no application. 18. It has been held in Shakthi Concrete Industries Ltd. and others v. M/s. Valuable Steels (India) Ltd., (1998)2 Crimes 329 , that the complaint by the company through Director was a valid one and no authorisation was required. This decision only supports the contention of the complainant. 19. It has also been held in Sagayadurai and others v. J.D. Electronics, (1997)1 L.W. (Crl.) 297, that the definition of the company under the Negotiable Instruments Act indicates any body Corporate including a firm indicates that the company has to be represented by some human agency in preferring a complaint. The dictates of common sense, practical wisdom, prudence and expedience impels 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. This decision is applicable to the case on hand. 20. It has also been held in M/s.Gopalakrishna Trading Co. represented by its Manager P.Sivaram v. P.Baskaran, (1999)3 C.T.C. 764 , that when the cheque has been issued in favour of a company, a complaint under Sec.138 of the Negotiable Instruments Act can be filed by its Manager, Partner, director of any other person authorised by the company. This decision is also applicable to the facts of the case on hand. The principles in all these decisions are applicable to the case on hand, but the applicability of the same depends upon the facts and circumstances of each case. 21. This decision is also applicable to the facts of the case on hand. The principles in all these decisions are applicable to the case on hand, but the applicability of the same depends upon the facts and circumstances of each case. 21. The learned counsel for the respondents relied on Gopalakrishna Trading Company v. D. Baskaran, (1994)80 C.C. 53 , wherein it is observed that the company is a legal entity and 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 the manner in which the company is to be represented in preferring a complaint before the Court for violation of the provisions under Sec.138 of the Act. The person connected with the affairs of the company in the normal run of things, who may be either its Manager, Partner, Managing Partner or director or any other person authorised by the company can represent it during the course of legal proceedings before the Court. 22. It has been held in Salar Solvent Extractions Ltd. v. South India Viscose Ltd., (1995)83 C.C. 540 , that a manager or any other person authorised by the company can represent it during the course of legal proceedings before the Court and file a complaint. 23. Reliance is also placed upon another decision of this Court in Modern Denim Ltd v. Lucas TVS Ltd., (1999)3 C.T.C. 143 , that there is no distinction between civil and criminal law as far as authorisation or power of attorney is concerned. Subsequent authorisation given cannot be thrown out on the ground that there was no authorisation at the time of filing complaint. 24. The learned counsel also relied on Bicycle Manufacturing Corporation v. Samrat Shipping Co. P. Ltd., (2000)2 C.C.R. 548 and it was held that no specific authorisation is required for filing the complaint by the Branch Manager since cheques in question in this case have been issued and given to the Branch Manager for encashment. Therefore, he is holder in due course and the cheques have been presented to the Bank, namely, Bank of India for collection. Therefore, he is holder in due course and the cheques have been presented to the Bank, namely, Bank of India for collection. When the Branch Manager presented the Cheque for encashment on behalf of the principal Company and when the cheques were dishonoured, he is competent to file the complaint even without there being any authorisation since he is responsible for all his acts on behalf of the company. 25. It has also been held in Manjeet Singh v. N.F.I.C.F. Co. (P) Ltd., (2000)2 C.C.R. 567, that where the complainant has been authorised to file a complaint, mere omission to file a document under which the complainant has been authorised is not a ground to refuse letter and the real question is whether on the date of complaint, the complainant is authorised to file a complaint or not. They also relied on Pappilon Exports Ltd. v. M.M.T.C. Ltd., 1999 M.L.J. (Crl.) 576, that the company has to be represented by some human agency and the General Manager can file a complaint on behalf of the company. Objections if any of the petitioner, should be agitated only at the time of trial and the complaint cannot be quashed. 26. The learned counsel for the respondents also relied in Geekay Exim (India) Ltd. v. State of Gujarat, 1996 Crl.L.J. 700, that the complainant-company represented by administrative Manager, who signed complaint, no special and express authorisation is necessary for initiating proceedings and as such, the complaint is maintainable. It is also held in P.A.Verghese v. Champion Business Associates P. Ltd., (1998)2 Crimes 85 , that complaint by person holding power of attorney of complainant company, having full knowledge of transaction of the company and complaint suffered no illegality. It has also been held in Shakthi Concrete Industries Ltd. v. M/s. Valuable Steels (India) Ltd., (1998)2 Crimes 329 , that a complaint by company through Director was a valid complaint as no authorisation was required. It has also been held in M/s.Credential Finance Ltd. v. State of Maharashtra, 1999 Crl.L.J. 1032, that existence of authorisation not being a pre-condition complaint was maintainable. 27. The other decisions relied on M/s.Sathish & Co. v. M/s.S.R. Traders, 1998 Crl.L.J. 419 and P.M.Vijayakumar v. M/s.Manara Chits (P) Ltd., 1998 M.L.J. (Crl.) 138 are not applicable to the case on hand. 27. The other decisions relied on M/s.Sathish & Co. v. M/s.S.R. Traders, 1998 Crl.L.J. 419 and P.M.Vijayakumar v. M/s.Manara Chits (P) Ltd., 1998 M.L.J. (Crl.) 138 are not applicable to the case on hand. It is relevant to point out that Power of Attorney has been filed in the case, nominating and appointing one Madhu to file the complaint. Similarly in respect of the other cases the copy of Board resolution had been filed. It is necessary to state that when there are particulars in the complaint indicating the power of attorney/ authorisation, I am of the view that it is sufficient compliance under law. Whether the Power of Attorney has been duly authorised by the Board of Directors under the provisions of the Act are the matters that have to be agitated only in the course of trial. If the contention of the learned counsel for the petitioners is probed or analysed now, it would amount to preliminary trial and it is just and necessary that the complainant has to be given an opportunity to let in evidence in order to prove that the power of attorney/ authorisation filed along with the complaint are valid under law. It is always open to the accused concerned also to cross-examine the witness or to let in positive evidence in order to establish that there is no valid power of attorney/ authorisation. The disputes now raised by the accused are only question of fact and it requires evidence to come to a reasonable conclusion. I am of the view that Sec.482, Crl.P.C. cannot be invoked to quash the proceedings against the accused. It is always open to the accused to raise these points during the time of trial. In the complaint, if the name of the witness and the names of power of attorney/ authorisation had been mentioned, in my view, they are sufficient to proceed further in the case and the cognizance taken by the Magistrate in the case is proper and correct and no interference is called for. 28. The complainants also relied on the decision of the Apex Court in M/s.Samart Shipping Company Ltd. v. Dolly George, J.T. (1999)10 S.C. 381, wherein it is held as follows: “The person who presented the complaint on behalf of the company claimed that he is the authorised representative of the company. 28. The complainants also relied on the decision of the Apex Court in M/s.Samart Shipping Company Ltd. v. Dolly George, J.T. (1999)10 S.C. 381, wherein it is held as follows: “The person who presented the complaint on behalf of the company claimed that he is the authorised representative of the company. Prima facie, the trial Court should have accepted it at the time when a 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 have been given 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 certified copy of the resolution appears to be too hasty an action. We, therefore, set aside the impugned orders and direct the trial Court to proceed with the trial and dispose it off in accordance with law.” This decision is applicable to this case in all fours. 29. The accused have also filed a Crl.R.C. aggrieved against the allowing of substitution petition filed on behalf of the complainant. Originally, the complaint in C.C.No.2546 of 1999 was represented by Power of Attorney holder Mr.Madhu and thereafter, the complainant filed an application to substitute Mr.Madhu in the name of Mr.Singaravelan. The learned counsel for the accused contended that by substituting one Power of Attorney for the other, it does to the root of the matter and the Board of resolution dated 19.4.2000 has not been filed while substituting Mr.Madhu and as such, the order allowing the substitution petition is not proper and correct. 30. A perusal of the order of the Court below dated 2.6.2000 indicates that notice was served to the accused and as they stated no objection, petition was allowed. The accused having stated no objection before the trial Court, cannot turn round and contend that the substitution of the person is not proper and correct. As adverted to, this question is also to be agitated by the accused only in course of trial. It is always open to the accused to contend that even Mr.Madhu was no proper authority and by substitution, it would not improve the case. As adverted to, this question is also to be agitated by the accused only in course of trial. It is always open to the accused to contend that even Mr.Madhu was no proper authority and by substitution, it would not improve the case. Merely because the substitution petition is allowed, it will not bar the contention of the accused in raising a plea relating to maintainability of the complaint and it is open to the accused to raise the same at the appropriate time, namely, trial and if the Court came to the conclusion based on notice and no objection, 1 am of the view that no interference is called for. The points are answered accordingly. 31. For the reasons stated above, all the Crl.O.Ps. as well as Crl.R.C. fail, and accordingly, they are dismissed. Consequently, all the connected Crl.M.Ps. are dismissed as unnecessary. It is however open to the accused to raise the issue of maintainability of the complaint before the trial Court and the trial Court is directed to consider the same uninfluenced by any of the observations and the trial Court is directed to dispose of all the cases as early as possible.