JUDGMENT : CRM(M) No. 487/2022 1. The respondent filed a complaint under section 138 Negotiable Instruments Act (hereinafter to be referred as “the NI Act”) against the petitioner by asserting that it is a partnership firm dealing with finance, loan, auction group and committee business etc. It is averred in the complaint that the petitioner was having a business relationship with the respondent, as such, he approached the respondent for financial support and the respondent gave him some amount. In order to discharge his part liability, the petitioner issued a cheque bearing No. 073991 dated 29.01.2022 for an amount of Rs. 20.00 lacs in favour of respondent but the same was dishonored vide memo dated 31.01.2022 for “Funds Insufficient”. 2. The respondent through its counsel served a legal notice on 18.02.2022 through registered post calling upon the petitioner to pay the amount of dishonored cheque within a period of 15 days from the date of receipt of notice. The said notice was received by the petitioner on 24.02.2022 but he did not pay the amount of the dishonored cheque within the period of 15 days. Thereafter, the respondent filed a complaint under Section 138 NI Act, before the learned Chief Judicial Magistrate, Jammu which was assigned to the court of learned Special Railway Magistrate Jammu (hereinafter to be referred as “the trial court”) and the process was issued against the petitioner vide order dated 18.04.2022. 3. The petitioner has filed the present petition for quashing of the proceedings of the complaint, titled, “Ajay Trading Company vs Ajay Gupta” pending before the learned trial court on the following grounds: (i) that the complainant has not pleaded the nature of transaction for which the cheque in question was issued and in fact, there was no transaction between the parties and there is no legally enforceable debt. (ii) that the complaint has been filed without any authority as no partnership deed has been annexed with the complaint. (iii) that the respondent-firm deals with the business of finance, loan, auction group and committee business etc. and for conducting such type of business, a mandatory permission under the Money Lenders and Accredited Loan Providers Act is required and until and unless such a license is issued, no one can conduct this business. 4. Mr. Mohd. (iii) that the respondent-firm deals with the business of finance, loan, auction group and committee business etc. and for conducting such type of business, a mandatory permission under the Money Lenders and Accredited Loan Providers Act is required and until and unless such a license is issued, no one can conduct this business. 4. Mr. Mohd. Aamir Awan, learned counsel for the petitioner has vehemently argued that in terms of section 5 of the Money Lenders and Accredited Loan Providers Act, a business of money lending cannot be commenced without obtaining registration under the said Act and the respondent has nowhere demonstrated that it has a requisite license under the Act to commence/continue the said business, therefore, the complaint is not maintainable. He has further argued that neither the partnership deed nor the authorization has been placed on record by the respondent, thereby authorizing Sh. Ajay Gupta, who claims to be the partner of respondent partnership firm, to file the impugned complaint. He has placed reliance upon the judgment of the Hon’ble Supreme Court of India in “A. C. Narayanan v State of Maharashtra and another”, (2014) 11 SCC 790 , “Shop named Kaloji Talusappa Ganga Vathi v Khyanagouda and others”, 1970 AIR SC 1420, the judgment of the Andhra Pradesh High Court in “Krishna Raju Finances vs Abida Sultana and others”, 2004(1) Andh LD (Criminal) 546, and the judgment of the Bombay High Court in “Anil Baburao Kataria vs Purshottam Prabhakar Kawane”, 2010(1) AIR Bom. R 434. 5. Per contra, Mr. Jasbir Singh Jasrotia, learned counsel for the respondent has vehemently argued that the respondent-partnership firm is registered with the Ministry of Micro, Small and Medium Enterprises, which is substantiated by the Udhayam Registration Certificate issued in favour of the respondent. He has further argued that the disputed questions of facts have been raised in the present petition, which cannot be adjudicated upon, until and unless the trial is conducted. He has relied upon the judgments in Dhanji Singh Nanda vs State and another, 2010(1) DCR 648, Rajbir Singh vs Geeta Devi, 2018(3) R.C.R. (Criminal) 534, Manoj Karwasara vs Parhlad Soni, 2020(2) R.C.R.(Criminal) 279 and Jupiter Brokerage Services Ltd vs Ektara Exports Pvt Ltd and others, 2016(1) CalCri LR 453. 6. He has relied upon the judgments in Dhanji Singh Nanda vs State and another, 2010(1) DCR 648, Rajbir Singh vs Geeta Devi, 2018(3) R.C.R. (Criminal) 534, Manoj Karwasara vs Parhlad Soni, 2020(2) R.C.R.(Criminal) 279 and Jupiter Brokerage Services Ltd vs Ektara Exports Pvt Ltd and others, 2016(1) CalCri LR 453. 6. The following two issues have been raised by the petitioner for adjudication by this Court: (1) Whether the proceedings of the complaint are required to be quashed as the respondent has neither placed the partnership deed nor any authorization on record, there by authorizing Sh. Ajay Gupa to file the complaint under section 138 NI Act ? (2) Whether the proceedings of the complaint are required to be quashed in view of section 5 of the Money Lenders and Accredited Loan Providers Act? Issue No. 1 7. Whether the proceedings of the complaint are required to be quashed as the respondent has neither placed the partnership deed nor any authorization on record, there by authorizing Sh. Ajay Gupa to file the complaint under section 138 NI Act ? A perusal of the record of the trial court reveals that the respondent has neither placed on record partnership deed nor any authorization for filing the complaint through its partner, Ajay Gupta. However, in para-1 of the complaint, it is specifically stated by the respondent that the complainant is a partner of the firm, namely, M/s Ajay Trading Company situated near Guest House, Canal Road, Jammu. Similar averments have been made by the respondent in his preliminary statement recorded before the learned trial court. Sh. Ajay Gupta, who has filed the complaint on behalf of M/S Ajay Trading Company, is one of the partners of M/s Ajay Trading Company as per averments made in the complaint and as stated by him on oath before the learned trial court. Whether Sh. Ajay Gupta is a partner and has competence to file the complaint under section 138 NI Act, is an issue, which is required to be determined during the course of trial. The learned trial court, after examining the contents of the complaint and examining the preliminary statement of the partner of the respondent-partnership firm, has issued the process against the petitioner. The learned trial court, after examining the contents of the complaint and examining the preliminary statement of the partner of the respondent-partnership firm, has issued the process against the petitioner. No fault can be found with the order dated 18.04.2022, whereby the process has been issued against the petitioner as there was no material before the learned trial court to disbelieve the averments made in the complaint and statement made by Sh. Ajay Gupta that he was partner of M/s Ajay Trading Company and the complaint cannot be quashed at the threshold without permitting the respondent to establish the averments made in the complaint. 8. The Hon’ble Supreme Court of India in the case of “Samrat Shipping Co. (P) Ltd. v. Dolly George”, (2002) 9 SCC 455 has held as under: 3. Having heard both sides we find it difficult to support the orders challenged before us. A company can file a complaint only through human agency. 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 of it in accordance with law. Parties are directed to appear before the trial court on 31-1-2000. (emphasis added) 9. Further the Hon’ble Supreme Court of India in “TRL Krosaki Refractories Ltd. v. SMS Asia (P) Ltd.”, (2022) 7 SCC 612 has held as under: “21. A meaningful reading of the above would indicate that the company having authorised the General Manager (Accounting) and the General Manager (Accounting) having personal knowledge had in fact been clearly averred. (emphasis added) 9. Further the Hon’ble Supreme Court of India in “TRL Krosaki Refractories Ltd. v. SMS Asia (P) Ltd.”, (2022) 7 SCC 612 has held as under: “21. A meaningful reading of the above would indicate that the company having authorised the General Manager (Accounting) and the General Manager (Accounting) having personal knowledge had in fact been clearly averred. What can be treated as an explicit averment, cannot be put in a straitjacket but will have to be gathered from the circumstance and the manner in which it has been averred and conveyed, based on the facts of each case. The manner in which a complaint is drafted may vary from case to case and would also depend on the skills of the person drafting the same which by itself, cannot defeat a substantive right. However, what is necessary to be taken note of is as to whether the contents as available in the pleading would convey the meaning to the effect that the person who has filed the complaint, is stated to be authorised and claims to have knowledge of the same. In addition, the supporting documents which were available on the record by themselves demonstrate the fact that an authorised person, being a witness to the transaction and having knowledge of the case had instituted the complaint on behalf of the “payee” company and therefore, the requirement of Section 142 of the NI Act was satisfied. In Vinita S. Rao v. Essen Corporate Services (P) Ltd. [ (2015) 1 SCC 527 ] , to which one of us (the Hon'ble CJI) was a member of the Bench has accepted the pleading of such a nature to indicate the power to prosecute the complaint and knowledge of the transaction as sufficient to maintain the complaint.” 25. In that view, the position that would emerge is that when a company is the payee of the cheque based on which a complaint is filed under Section 138 of the NI Act, the complainant necessarily should be the company which would be represented by an employee who is authorised. Prima facie, in such a situation the indication in the complaint and the sworn statement (either orally or by affidavit) to the effect that the complainant (Company) is represented by an authorised person who has knowledge, would be sufficient. Prima facie, in such a situation the indication in the complaint and the sworn statement (either orally or by affidavit) to the effect that the complainant (Company) is represented by an authorised person who has knowledge, would be sufficient. The employment of the terms “specific assertion as to the knowledge of the power-of-attorney holder” and such assertion about knowledge should be “said explicitly” as stated in A.C. Narayanan [ (2014) 11 SCC 790 ] cannot be understood to mean that the assertion should be in any particular manner, much less only in the manner understood by the accused in the case. All that is necessary is to demonstrate before the learned Magistrate that the complaint filed is in the name of the “payee” and if the person who is prosecuting the complaint is different from the payee, the authorisation therefor and that the contents of the complaint are within his knowledge. When, the complainant/payee is a company, an authorised employee can represent the company. Such averment and prima facie material is sufficient for the learned Magistrate to take cognizance and issue process. If at all, there is any serious dispute with regard to the person prosecuting the complaint not being authorised or if it is to be demonstrated that the person who filed the complaint has no knowledge of the transaction and, as such that person could not have instituted and prosecuted the complaint, it would be open for the accused to dispute the position and establish the same during the course of the trial. As noted in Samrat Shipping Co. [(2002) 9 SCC 455], dismissal of a complaint at the threshold by the Magistrate on the question of authorisation, would not be justified. Similarly, we are of the view that in such circumstances entertaining a petition under Section 482 to quash the order taking cognizance by the Magistrate would be unjustified when the issue of proper authorisation and knowledge can only be an issue for trial.” (emphasis added) 10. The petitioner can raise the issue in respect of the competence of Sh. Ajay Gupta to file and prosecute the complaint on behalf of the respondent-partnership firm during the course of trial but cannot seek quashing of the complaint solely on the ground that neither any partnership deed nor authorization has been placed on record by Sh. Ajay Gupta on behalf of the partnership firm. Ajay Gupta to file and prosecute the complaint on behalf of the respondent-partnership firm during the course of trial but cannot seek quashing of the complaint solely on the ground that neither any partnership deed nor authorization has been placed on record by Sh. Ajay Gupta on behalf of the partnership firm. The judgment relied upon by the learned counsel for the petitioner in case of A. C. Narayanan’s case(supra) has been taken note of in the judgment in the case titled TRL Krosaki Refractories Ltd. v. SMS Asia (P) Ltd. (Supra). Thus, the complaint and the proceedings arising thereto cannot be quashed at this stage on the ground that the respondent has neither placed partnership deed nor any authorization, thereby authorizing Sh. Ajay Gupta to file the complaint on behalf of the respondent. Issue No. 2 11. Whether the proceedings of the complaint are required to be quashed in view of section 5 of the Money Lenders and Accredited Loan Providers Act? Section 5 of the Money Lenders and Accredited Loan Providers Act provides that a business of money lending cannot be commenced without obtaining a registration under the Act. In order to adjudicate this issue, this Court deems it appropriate to extract paras 2 and 3 of the complaint which read as under: “2. That the complainant deals in the business of Finance, loan, auction group & committee business etc. 3. That the complainant submits that the accused is having business relation with complainant approached the complainant for financial support and complainant gave him some amount.” 12. The respondent-partnership firm, as stated in the complaint, is involved in the business of finance, loan, auction group and committee business etc. and simultaneously, it is stated that the petitioner was having a business relation with the complainant and he approached the complainant for financial support. It is not forthcoming from the complaint that as to whether the financial support was provided to the petitioner as a loan or participation in a committee business and this is substantiated by ground-(i) as mentioned above (ground (d) in the petition), wherein the petitioner has stated that the complainant has not pleaded the nature of transaction for which the cheque in question was issued. The petitioner, in fact, has been caught in a web woven by him only as on one hand, the petitioner has stated that the respondent has not pleaded the nature of transaction for which the cheque has been issued and on the other hand, it is urged that there is no legally enforceable debt as the section 5 of the Act clearly bars the commencement and continuance of business of money lending without obtaining a registration under the Act. Once the petitioner himself has stated that the respondent has not pleaded the nature of transaction, he cannot be heard to say that the complaint is required to be dismissed in view of the provisions contained in section 5 of the Act., more particularly when the proceedings in the complaint before the learned trial court are still at initial stage and even the statement of the accused/petitioner has not been recorded. Whether the cheque was issued by the petitioner in discharge of legal debt is a triable issue which can be decided only after trial. The inherent powers under section 482 Cr.P.C. for quashing the criminal proceedings cannot be exercised in a routine manner but in exceptional circumstances. The inherent powers for quashing complaint at the threshold can be exercised only when the admitted fact or the facts taken in entirety do not constitute any offence but where the facts are hazy and inchoate, the inherent powers cannot be exercised. 13. In “Rathish Babu Unnikrishnan v. State (NCT of Delhi)”, 2022 SCC OnLine SC 513, the Hon’ble Apex Court has held as under: 16. The proposition of law as set out above makes it abundantly clear that the Court should be slow to grant the relief of quashing a complaint at a pre-trial stage, when the factual controversy is in the realm of possibility particularly because of the legal presumption, as in this matter. What is also of note is that the factual defence without having to adduce any evidence need to be of an unimpeachable quality, so as to altogether disprove the allegations made in the complaint. 17. The consequences of scuttling the criminal process at a pre-trial stage can be grave and irreparable. What is also of note is that the factual defence without having to adduce any evidence need to be of an unimpeachable quality, so as to altogether disprove the allegations made in the complaint. 17. The consequences of scuttling the criminal process at a pre-trial stage can be grave and irreparable. Quashing proceedings at preliminary stages will result in finality without the parties having had an opportunity to adduce evidence and the consequence then is that the proper forum i.e., the trial Court is ousted from weighing the material evidence. If this is allowed, the accused may be given an un-merited advantage in the criminal process. Also because of the legal presumption, when the cheque and the signature are not disputed by the appellant, the balance of convenience at this stage is in favour of the complainant/prosecution, as the accused will have due opportunity to adduce defence evidence during the trial, to rebut the presumption. 18. Situated thus, to non-suit the complainant, at the stage of the summoning order, when the factual controversy is yet to be canvassed and considered by the trial court will not in our opinion be judicious. Based upon a prima facie impression, an element of criminality cannot entirely be ruled out here subject to the determination by the trial Court. Therefore, when the proceedings are at a nascent stage, scuttling of the criminal process is not merited. (emphasis added) 14. In view of the above, this Court does not find any reason to show indulgence at this stage and accordingly, the present petition is dismissed, leaving the petitioner free to raise the grounds urged in the present petition before the learned trial court during the course of trial. CRM(M) Nos. 488/2022 & 499/2022 15. The controversy involved in the instant petitions as well as the grounds taken, are the same as discussed above, as such, these petitions are also dismissed on the aforesaid terms.