Thapar Agro Mills v. Haryana State Industrial Development Corporation Ltd.
2004-01-27
VIRENDER SINGH
body2004
DigiLaw.ai
JUDGMENT Virender Singh, J. - M/s Thapar Agro Mills Ltd. through Sh. Satish Thapar, its Managing Director-cum-Chairman are facing trial in a complaint (Annexure P1) filed by the Haryana State Industrial Development Corporation Ltd., the respondent-herein under Section 138 read with Section 141 of the Negotiable Instruments Act (for short the Act) on account of dishonour of cheque No. RGE 142527 dated 20.9.1995 for Rs. 6.25 lacs and 15 other cheques of different dates, which were also dishonoured. 2. A process was issued againt the petitioners by the concerned Court. Petitioner No. 2 filed an application dated 14.8.2000 (Annexure P5) for dismissal of the complaint mainly on the ground that the present complaint had not been filed by legally and validly authorised person and as such the complaint is not sustainable in the eye of law. The said application stands dismissed by the Judicial Magistrate 1st Class, Chandigarh vide order dated 12.2.2001 (Annexure P-7) Hence this petition for quashing of the complaint and the order dated 12.2.2001. Record reveals that respondent No. 2 is only a proforma party. Respondent No. 1 has filed its reply. The proceedings before the trial Court were stayed by this Court way back on May 4, 2001. 3. I have heard Mr. Puneet Bali, learned counsel for the petitioners, Mr. Dheeraj Chawla, learned counsel for respondent No. 1 and with their assistance have gone through the entire records. 4. Mr. Bali has contended that M/s Thapar Agro Mills Ltd. has been declared a sick unit under the Sick Industrial Companies (Special Provisions) Act, 1985 and in this eventuality the liability of the petitioner-company to pay the money is purely of civil nature. However, he has not raised this objection in the present petition and confines his arguments to another primary controversy i.e. Ashwani Kumar Sharma, Assistant General Manager of the Corporation could not file the present complaint without a specific resolution passed by the Board of Directors in a general meeting. He then contends that the authority letter (Annexure P-3) in this regard cannot be taken into account. Similarly, according to Mr. Bali, another authority letter (Annexure P-4) in favour of the J.K. Sharma, Assistant General Manager, who stepped into the shoes of Mr. A.K. Sharma after his transfer, is again without any resolution authorising the Managing Director or any other person to institute the criminal complaint against the petitioners.
Similarly, according to Mr. Bali, another authority letter (Annexure P-4) in favour of the J.K. Sharma, Assistant General Manager, who stepped into the shoes of Mr. A.K. Sharma after his transfer, is again without any resolution authorising the Managing Director or any other person to institute the criminal complaint against the petitioners. In the face of these objections, the petitioners filed an application for dismissal of the complaint alleging therein that it has not been filed by legally and validly authorised person. The said application stands dismissed without any basis. Drawing my attention to certain Clauses of the Articles of Association of the Company as reproduced in para 5 of the petition, Mr. Bali then contends that the learned trial Court has not properly appreciated this fact while dismissing the application. The learned counsel buttresses his argument with an instance as per order Annexure P6 dated 8.10.2000, in which a complaint of similar nature filed by M/s. American Express Bank Ltd. was dismissed by the Metropolitan Magistrate, New Delhi on the ground that no resolution was passed by the Bank before filing the complaint againt the petitioners. Otherwise also, in support of his contentions Mr. Bali relies upon two decisions i.e. Punjab Wakf Board v. Kishan Chand, 1988(3) PLR 15 and Municipal Committee, Sirhand v. Ishar Dass and another, 2000(1) PLR 691. 5. Mr. Dheeraj Chawla, learned counsel for respondent No. 1 contended that so far as the amount of Rs. 6.25 lacs is concerned, the petitioners admit that they owe the said amount and had issued the cheque in favour of the answering respondent and as such the uncontroverted position is that the petitioners have the financial liability. As per Annexure R-1/1, which is extract of minutes of the meeting of Board of Directors of respondent/Corporation held on 30.5.1967, administrative powers were delegated to the Managing Director in general and it was made clear in para 8 that he would be authorised to institute, conduct, defend and compromise, refer to arbitration and abandon legal or other proceedings and claims by and against the Corporation." According to Annexure R-1/2 in exercise of the power under Article 81(xx) and Article 105, a partial modification was done and as per the meeting held on 20.5.1998, the Manging Director was given certain more powers for efficient working of the Corporation.
He was even authorised to sub-delegate any of his powers to the officers of the Corporation. On the basis of the aforesaid annexures, Mr. Chawla submits that the Managing Director had all the authority to authorise Mr. Ashwani Kumar Sharma vide Annexure P3 to file the complaint against the petitioners in the court of competent jurisdiction agaisnt dishonour of the cheque and thereafter to authorise Mr. J.K. Sharma vide Annexure P4. He then contends that even if there is no specific resolution by the Board of Directors of the Corporation for filing the present complaint, it would not adversely effect the case of the respondent/complainant and the complaint cannot be dismissed on this count alone. The learned counsel in support of his contentions relies upon the decision of the Honble Apex Court in M.M.T.C. Ltd. and another v. Medchl Chemicals and Pharma (P) Ltd., 2002(1) SCC 234. Mr. Chawla submits that even if there is no authorisation to file complaint by way of a special/specific resolution, still the present complaint is maintainable. 6. After hearing the rival contentions, I do not find myself in agreement with the submissions made by learned counsel for the petitioners. 7. Clauses 80, 81 and 82 of the Memorandum of Association of the respondent/Corporation reads as under : "80(i). Subject to the provisions of the Act, the Board shall be entitled to exercise all such powers and to do all such acts and things, as the Company is authorised to exercise and do in furtherance of its objects, specified in the Memorandum of Association, for which the Company is established, except such powers as are required by the Act or the Memorandum of Articles of Association of the Company to be exercised or done by the Company in General Meeting. In exercising such powers or doing any such acts or things, the Board shall be subject to the provisions contained in that behalf in the Memorandum or Articles of the Company or in any regulation not inconsistent herewith and duly made thereunder, including regulations made by the Company in General Meeting. ii) No regulations made by the Company in General Meeting shall invalidate any prior act of the Board which have been valid if that regulation had not been made. 81.
ii) No regulations made by the Company in General Meeting shall invalidate any prior act of the Board which have been valid if that regulation had not been made. 81. Without prejudice to the general powers conferred by Article 100 and the other powers conferred by these Articles but subject to the provisions of Section 292 of the Act, the Directors shall have the following powers namely :- xxx xxx xxx xxx (vii) to institute, conduct, defend, compound or abandon any legal proceedings by or againt the Company or its officers or otherwise concerning the affairs of the Company and also to compound and allow time for payment or satisfaction of any claims or demands by or against the Company. 82. (i) The Government may appoint one of the Directors to be Managing Director for the conduct or management of the business of the Company subject to the control and supervision of the Board of Directors. The Managing Director may be authorised by the Board to exercise such powers or discretion in relation to the affairs of the Company as are specifically delegated to him by the Board and are not required to be done by the Board of Directors or the Company at the General Meeting under the Act." 8. The main contention raised by Mr. Bali is that all the decisions pertaining to the Corporation have to be taken by the Board of Directors in a general meeting. The Directors have the powers to appoint one of the Directors to be the Managing Director for the purposes of management of the business of the Company, but this would be subject to control and supervision of the Board of Directors. The other argument advanced is that till date no such specific resolution by the Board of Directors has been passed authorising the Managing Director to file the instant complaint and as such question of sub-delegating of powers does not arise. At the first flush, the argument appear to be attractive but have to be repelled when seen in the light of Annexures R1/1 and R1/2 filed by the respondent/Corporation. Although according to clause 80 of the Memorandum of Association, all the powers were with the Directors, but it is mentioned in Annexure R1/1 that the Managing Director was authorised to exercise certain powers which included power to institute conduct and defend cases for and against the Corporation.
Although according to clause 80 of the Memorandum of Association, all the powers were with the Directors, but it is mentioned in Annexure R1/1 that the Managing Director was authorised to exercise certain powers which included power to institute conduct and defend cases for and against the Corporation. The matter does not rest here. Annexure R1/2 further empowers the Manging Director of sub-delegate its power to the officers of the Corporation. This all was done visualising the practical viability as the Corporation has to go in for different litigations of multifarious nature and it is not possible that for every litigation a specific resolution be passed in that regard by the Board of Directors of the Corporation. In such an eventuality, a single resolution empowering any of its Directors to be the over all incharge/supervisor of the office would suffice the matter. In the instant case, Annexure R1/1 and R/12 are indicative of the said situation and in my considered view there is no illegality in it. 9. The decisions in Punjab Wakf Board, and Municipal Committee, Sirhand (supra) relied upon by Mr. Bali are not applicable in the instant criminal proceedings. In the aforesaid two cases, the civil appeals filed were held to be not properly filed by an authorised person in the absence of a specific direction by way of a special resolution. However, the factual position in the present case is entirely different. Similarly, the learned counsel cannot derive any benefit from the order Annexure P-6. 10. It is significant to observe that the objection pertains to the indoor working of a Company and as such it tantamounts to raising a storm in a tea- cup. 11. Even otherwise, locus standi of the complainant is a concept foreign to criminal jurisprudence. Section 190 of the Code of Criminal Procedure permits any one to approach the Magistrate with a complaint, it does not prescribe any qualification for a person eligible to file a complaint. It is well recognised principle that any one can set the criminal law in motion by filing a complaint of facts constituting an offence before the Magistrate, entitled to take cognizance. The complainant has to be a corporeal person, who is capable of making physical appearance in the Court as held by their Lordships of the Honble Apex Court in the case of Associated Cement Co. Ltd. v. Keshvanand, 1998(1) SCC 687.
The complainant has to be a corporeal person, who is capable of making physical appearance in the Court as held by their Lordships of the Honble Apex Court in the case of Associated Cement Co. Ltd. v. Keshvanand, 1998(1) SCC 687. However, the general principle of law can be excluded only by a statute providing otherwise by necessary implication. But in the case in hand no such exception has been adverted to. 12. Considering the circumstances of the present case and following the ratio of the decision in M.M.T.C. Ltds case (supra), I am of the view that the instant complaint is maintainable. 13. No other point has been urged before me. 14. Hence the present petition is dismissed being devoid of force. Since the proceedings before the trial Court were stayed by this Court, the parties through their respective counsel are directed to appear before the Court below on February 23, 2004 for further proceedings in the main case. Petition dismissed.