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2012 DIGILAW 965 (BOM)

Jaushna Enterprises v. Shree Mahavir Agency

2012-05-08

T.V.NALAWADE

body2012
Judgment : The appeal is filed against the judgment and order of S.C.C. No.2117/2007, which was pending in the Court of Judicial Magistrate First Class, Nagpur. In the complaint filed by the appellant for offence punishable under Section 138 of the Negotiable Instruments Act, 1881, the respondent is acquitted by the Judicial Magistrate First Class. 2. The complaint was filed for a private limited company registered under the Companies Act, 1956, through its Executive Director Shri Jitendra Goyal. Accused No.1 is a Partnership Firm, Shree Mahavir Agency. It is contended that the accused deal in sale of Tata Salt and Samundar Soda and the complainant used to supply these goods to the accused Firm and for the payment, the accused used to issue cheques. It is contended that as against the amount of Rs. 57,088/-which was outstanding, the accused gave cheque of this amount to the complainant on 10.7.2006. This cheque was presented in the bank of the accused from Nagpur, but it bounced. After following the procedure, a complaint came to be filed. 3. Before Judicial Magistrate First Class, the complainant Jitendra Goyal examined and produced the relevant record like cheque, bank memo, copy of demand notice etc. Copy of account statement in respect of the business was also produced by the complainant to show that separate account was maintained in respect of the firm, accused no.1. Some bills came to be produced and copies of Resolutions made by the Company to appoint Shri Jitendra Goyal as Executive Director to look after day to day affairs of the company were produced. 4. The accused took various defences like (i) that, there was no authority or power given to Shri Jitendra Goyal to file complaint for the company, (ii) that, as per the agreement, five blank cheques were given by way of security in the custody of the complainant and one cheque has been mis-used even when the amount was not due from the accused (iii) that, in July 2006 order was placed for supply of Tata Salt but 6.4 metric tons quantity was found to be short and accordingly correspondence was made to the company and the claim was lodged. This quantity was supplied to another concern, Akar Agency and so there was no liability as such in respect of the value of that quantity, which was Rs. This quantity was supplied to another concern, Akar Agency and so there was no liability as such in respect of the value of that quantity, which was Rs. 43,568/-and (iv) that there was no legally enforceable liability in respect of the cheque amount. 5. The Judicial Magistrate First Class has accepted all the aforesaid defences taken by the accused. It was mainly submitted in the appeal for the complainant that even when the copies of authorisation in the form of Resolution of the Company were produced, the Judicial Magistrate First Class has given finding against the complainant on this point. Some submissions were made in respect of the presumption available under Section 139 of the Negotiable Instruments Act. Both sides have cited some reported cases. 6. This Court has carefully gone through the evidence given by Shri Jitendra Goyal for the complainant. Shri Goyal has admitted in the evidence that the grievance was made by the accused concern that less quantity of Tata Salt was received and probably part of the consignment was delivered to Akar Agency. The judgment of the trial Court shows that it was submitted in the Trial Court for complainant that there is probability that as per the instructions given by the accused the said supply was made to Akar Agency. The value of this quantity was more than Rs.43,568/-. Thus, there was dispute about the liability. In the past, similar disputes were considered by the TATA Company and many times, such grievances were considered favourably, as per the evidence. 7. The accused has brought on record the policy of the Company, which was supplying the aforesaid goods. The Distributor like the accused was expected to hand over five cheques by way of security. The Judicial Magistrate First Class has believed the letter of the Company, which is at Exhibit 51. It is the case of the accused that one of those cheques has been used by the complainant Company when there was no legally enforceable liability. 8. The main defence is about the absence of authorisation or power in favour of Shri Goyal from the complainant company. This Court has carefully gone through the so-called resolutions, which are at Exhibits 34 and 35. These documents to show that Shri Goyal was appointed as Executive Director and his remuneration was fixed. 8. The main defence is about the absence of authorisation or power in favour of Shri Goyal from the complainant company. This Court has carefully gone through the so-called resolutions, which are at Exhibits 34 and 35. These documents to show that Shri Goyal was appointed as Executive Director and his remuneration was fixed. In these documents, there is no whisper about giving power to Shri Goyal to file cases in the Court like the present case. 9. It was submitted for the appellant that as Shri Goyal can be treated as employee of the complainant company, there is no requirement of specific power or authorisation to file complaint. On this point, both sides relied on the observations made by the Apex Court in the case reported as (2009)1 SCC 407 (National Small Industries Corporation Limited Vs. State (NCT of Delhi) and others). The Apex Court has laid down the ratio as follows:- "A company can be represented by an employee or even by a non-employee authorised and empowered to represent the company either by a resolution or by a power of attorney." 10. The Apex Court has discussed the relevant provisions of Code of Criminal Procedure and the Companies Act and then aforesaid observations are made. These observations can be divided into three parts as follows:- [i] A company can be represented by an employee or even by a non-employee; [ii] authorised and empowered to represent the company either; and [iii] either by a resolution or by a power of attorney. There cannot be any other interpretation of the position of law laid down by the Apex Court in this case. Thus, even for Shri Goyal, it was necessary to show that there was resolution of the company to empower and authorise him to file complaint. In view of Section 142 of the Negotiable Instruments Act, 1881, a complaint can be made by only a payee. As the complainant company is incorporeal person, it is required to appoint a living person, who can file complaint and who can be available for procedure, which needs to be followed under Section 200 of the Code of Criminal Procedure. 11. In the present case, there was no such power given to Shri Goyal and there was no authorisation given by any resolution of the company. 12. 11. In the present case, there was no such power given to Shri Goyal and there was no authorisation given by any resolution of the company. 12. At least in two cases, this Court has observed that the authroisation by the Resolution must be specific for filing the complaint. In this regard, copies of decision given by learned Single Judge of Goa Bench of this Court are produced such decision was given in Appeal No.11 of 2009 (Reported in (Coram : Shri Justice Britto N. A.). While sitting at the Principal Seat, similar decision was given by Shri Justice Britto N.A. in Criminal Appeal No.32 of 2006. In the case reported at 2009 Cr. L.J. (NOC) 467 (BOM.) (EPC Industries Ltd. Vs. State of Maharashtra and another) this Court has observed that unless some person is authorised to file complaint by the Company, the complaint is not tenable. As the cognizance of offence can be taken by the Magistrate only on complaint of payee, the compliance of the aforesaid procedure was necessary. It can be said that only due to some observations made by the Apex Court in the case of National Small Industries Corporation Ltd Vs. State (cited supra) such authorisation could have been produced even subsequently. Such step was not taken. For the appellant, reliance was placed on the judgment delivered by this Court in Criminal Revision Application No.146 of 2011 (Jabirsha Latifshah Vs. The Shegaon Shri Agrasen Sahakari Path Sansha Maryadit, Shegaon and another) at Nagpur Bench. The other Bench of this Court has referred the aforesaid case of the Apex Court and it is observed that it was not necessary for the Branch Manager of the Credit Society to produce resolution of the Society authorising him to file a complaint, as such defence was not raised. The facts of the present case are totally different. 13. Reliance was placed for the appellant on one case reported as 1998 (2) Crimes 329 (Shakthi Concrete Industries Ltd and Ors. Vs. M/s. Valuable Steels (India) Ltd. (Madras High Court). In that case, the complaint was filed by the Company through the Director and the High Court held that no authorisation was necessary. The aforesaid case of the Apex Court could not be referred by the said High Court as the decision was given on 22.1.1998. So this ratio is of no use to the appellant. 14. In that case, the complaint was filed by the Company through the Director and the High Court held that no authorisation was necessary. The aforesaid case of the Apex Court could not be referred by the said High Court as the decision was given on 22.1.1998. So this ratio is of no use to the appellant. 14. In view of the discussion made, this Court holds that the view taken by the trial Court is probable view. No interference is warranted in the decision of the Judicial Magistrate First Class. So the appeal stands dismissed.