Dismissed

Smt Mahadevamma v. M/S iL Proprietors Pvt. Ltd.

Karnataka HC10 Feb 2022CRL.RP/836/2019

Case brief

AI extract

What is this about?

The High Court of Karnataka dismissed a criminal revision petition challenging a conviction under Section 138 of the Negotiable Instruments Act. The Court held that the Director, duly authorized by the Board of Directors via resolution, was competent to file the complaint on behalf of the company, and the lack of explicit signature on the authorization copy did not vitiate the proceedings.

What did the court decide?

The revision petition was dismissed, and the judgment of conviction and sentence was confirmed.

Smt Mahadevamma Vs M/S iL Proprietors Pvt. Ltd. — Cheque Dishonour | Karnataka HC (2022)

¶1

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

¶2

DATED THIS THE 10^TH DAY OF FEBRUARY, 2022

¶3

BEFORE:

¶4

THE HON’BLE MR. JUSTICE P.N.DESAI

¶5

CRIMINAL REVISION PETITION No. 836 OF 2019

¶6

BETWEEN:

¶7

SMT. MAHADEVAMMA, W/O. M. L. SHANKAR, AGED ABOUT 57 YEARS, R/AT NO.45/46, 4^TH MAIN, ASTALAKSHMI LAYOUT, J P NAGAR, BENGALURU-560 078. .. PETITIONER

¶8

(BY SRI. D.P. PRASANNA, ADV.)

¶9

AND:

¶10

M/S. iL PROPRIETORS PVT LTD., OFFICE AT NO.732 4^TH FLOOR, 15^TH CROSS, J. P NAGAR 6^TH PHASE, BENGALURU-560 078. …RESPONDENT

¶11

(BY SRI. KUMARA K.G , ADV.)

¶12

THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 R/W 401 CR.P.C BY THE ADVOCATE FOR THE PETITIONER PRAYING TO SET ASIDE THE JUDGMENT OF CONVICTION AND SENTENCE PASSED BY THE LXV ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU CITY IN CRL.A.NO.696/2016, DATED 15.03.2019, AND JUDGMENT IN C.C.NO.4149/2015, DATED 11.05.2016 ON THE FILE OF THE XLII A.C.M.M., AT BENGALURU CITY AND ACQUIT THE PETITIONER FOR THE CHARGES UNDER SECTION 138 OF N.I ACT.

¶13

THIS CRIMINAL REVISION PETITION IS COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING:-

¶14

¶15

ORDER

¶16

This revision petition is filed by the petitioner under section 397 and 401 of The Code of Criminal Procedure, 1973(for short hereinafter referred to as Cr.P.C.) with a prayer to set-aside the judgment of conviction and order of sentence dated 15.03.2019 passed by learned LXV Additional City Civil and Sessions Judge, Bangalore in Crl.A.No.969/2016, wherein the learned sessions judge confirmed the judgment of conviction dated 11.05.2016 passed by learned XLII Additional Chief Metropolitan Magistrate, Bengaluru in C.C.No.4149/2015, wherein the accused is convicted for the offence punishable under section 138 of the Negotiable Instruments Act, 1881 (for short hereinafter referred to as N.I.Act) and acquit the petitioner of the said charge.

¶17

The Revision petitioner before this Court was the accused before the trial court and the respondent was the complainant. For the sake of convenience, the parties will be referred as 'accused' and 'complainant' as per their respective ranks before the trial court.

¶18

¶19

The brief case of the complaint before the trial

¶20

court is as under:-

¶21

That the complainant is a company incorporated under the Companies Act, 1956. It is further case of the complainant that in the second week of January 2014, the accused approached the complainant alongwith her husband and son stating that she is the absolute owner of the property bearing Sy.No.45/46 measuring 50' x 70' in Sy.No.25 situated at J.P. Nagar, 6th Phase, Bengaluru and they offered the complainant to purchase or develop the said property by entering into a joint development agreement. Believing the representation of the accused, the complainant agreed for the same. In this regard, on 21.02.2014, the accused requested the complainant to pay a sum of Rs.5,00,000/- as advance to clear some loans. The complainant paid a sum of Rs.2,10,000/- by way of cash and Rs.2,90,000/- by way of cheque bearing No.000160 dated 21.02.2014 drawn on HDFC, Jayanagar, Bengaluru. At the time of collecting money from the complainant, the accused executed a joint development agreement in favour of

¶22

¶23

the complainant and if she fails to do so, the amount will be repaid within 15 days. It is further contended that the accused executed a Memorandum of Undertaking in favour of the complainant after receiving the amount and the husband and son of the accused also signed as witnesses to the said MOU.

¶24

It is further contended that the complainant thereafter got verified the property papers given by the accused through an Advocate and came to know that the said property was already mortgaged to certain bank by availing the loan. In this regard, the complainant enquired with the accused and the accused admitted the same and stated that she would repay the amount and requested not to take any legal action against her. On several occasions, the complainant requested the accused to repay the amount. Subsequently, in the last week of September 2014, the accused issued a post-dated cheque bearing No.008042 dated 06.10.2014 for Rs.5,00,000/- drawn on Bank of Maharashtra, J.P. Nagar Branch, Bengaluru, in favour of the complainant. The complainant presented the said

¶25

¶26

cheque to the bank for encashment on 06.10.2014 through its banker HDFC, but the said cheque was returned with an endorsement 'Funds Insufficient'. Thereafter, the complainant got issued a notice to the accused on 08.11.2014 through RPAD. Though the said notice was served on the accused on 12.11.2014, the accused neither replied to the notice nor paid any amount. Therefore, the complainant was constrained to lodge a complaint against the accused under section 138 of N.I. Act.

¶27

Before the trial court, the accused appeared.

¶28

The complainant got examined himself as PW-1 and got marked six documents as Ex P1 to P6. The statement of the accused under section 313(1)(b) Cr.P.C. was recorded. The accused denied evidence of complainant. The accused has not chosen to adduce defence evidence. After hearing both sides, learned magistrate found the accused guilty of the offence punishable under section 138 of N.I. Act and she was convicted and

¶29

sentenced to pay fine of Rs.5,000/- and in default to undergo simple imprisonment for 30 days and under

¶30

¶31

section 357(3) Cr.P.C., the accused was directed to pay Rs.5,60,000/- to the complainant as compensation, in default, to undergo simple imprisonment for a period of four months. The same was challenged by the accused before the sessions court in Crl.A.No.696/2016. Learned sessions judge by judgment and order dated 15.03.2019 dismissed the appeal and confirmed the judgment of conviction and order of sentence which is now assailed before this Court in this revision petition.

¶32

I have heard Sri. D.P. Prasanna, learned counsel for the revision petitioner and Sri. Kumar K.G. for the respondent through video conferencing.

¶33

I have perused the appeal memo, judgment of the learned sessions judge, judgment of the trial court and also the evidence on record.

¶34

Learned counsel Sri. D.P.Prasanna appearing on behalf of the Revision petitioner argued mainly on one point. Learned counsel argued that under section 142 of the N.I. Act, the trial court ought not to have taken cognisance of the offence under section 138 of N.I. Act, when the complaint in writing is not made by

¶35

¶36

the payee or by its authorised authority holder in due course.

¶37

Learned counsel further argued that if the trial court records are perused, when the complainant got examined himself initially, he has produced only four documents which are marked as Exs-P1 to P4, wherein Ex-P1 is the cheque, Ex-P2 bank endorsement for insufficient funds, Ex-P3 legal notice and Ex-P3(a) and (b) postal acknowledgment and Ex-P4 complaint. So learned counsel argued that the cognizance taken by the trial court without there being proper authorisation to the person who has filed the complaint is bad in law. Learned counsel argued that the authorisation Ex-P5 and the agreement receiving advance amount for joint agreement -Ex-P6 are produced subsequently by recalling PW-1. Therefore, learned counsel argued that the said cognizance taken by the trial court is bad in law in view of section 142 of N.I. Act. In support of his argument, learned counsel has relied on the decision of

¶38

M/s. SURINDERA STEEL ROLLING MILLS v. SH.

¶39

¶40

SANJIV KUMAR & ANR¹ , wherein, it is held-complaint

¶41

not filed by holder of cheque in due course and complaint not been filed through a duly authorised person, the cognizance thereof, could not be taken and accused was entitled to acquittal. The learned counsel submitted that in the present case also as no authorisation was produced, the complaint filed by the complainant without there being any authorisation is bad in law and the cognizance taken by the learned magistrate is illegal and hence the petitioner/accused is entitled for acquittal. Learned counsel relied on another decision of this court in GEORGE JOSEPH v. HMT

¶42

(INTERNATIONAL) LIMITED² .

¶43

Learned counsel argued that in view of the principles stated in the above decision, the proceedings are vitiated for want of authority to prosecute the complaint on behalf of the company. He relied upon another decision of coordinate Bench of this Court in the case of CREF FINANCE LIMITED, KOLKATA v. SREE

¶44

1 2009 CRL.L.J. (NOC) 701 (P. & H.)

¶45

2 2015(1) AKR 822

¶46

¶47

SHANTHI HOMES PRIVATE LIMITED, BANGALORE

¶48

AND ANOTHER³

¶49

So learned counsel argued that in the aforestated decision also, the person who has signed the complaint has no authority in law to represent the company as there is no resolution by the Company authorizing the complainant to file the complaint. Learned counsel prayed to dismiss the complaint and acquit the revision petitioner/accused. Except this point, no other point was urged by the learned counsel.

¶50

Against this, learned counsel for the respondent/complainant Sri. Kumara K.G. appearing through video conferencing argued that, this aspect is considered by both trial court as well as first appellate court. Both the courts have concurrently held that the complaint is filed by the authorised person. Hence the said contention urged by learned counsel for the petitioner is not tenable. Learned counsel further argued that if the original records of the trial court are perused, the complainant infact at the time of filing the complaint

¶51

3 ILR 2014 KAR 2168

¶52

10 -

¶53

itself has produced the said authorisation letter which is available on record at page 7 of the complaint and same is evident from the list of documents produced by the complainant which is available at ink page 97 of the file. Totally five documents were produced alongwith complaint, out of which 5th document is shown in the list of documents as Authorization letter/company incorporation letter. Learned counsel submitted that though the said authorisation letter was produced earlier, due to oversight, it was not marked when the complainant led his evidence at the initial stage. Subsequently, an application was filed by the complainant under section 311 Cr.P.C. to recall the complainant/PW-1 and the said authorisation letter which was already produced alongwith the complaint was marked as Ex-P5 alongwith other papers. Therefore, learned counsel argued that the complaint was filed by one Sri. Appanna V.T, who is Director of M/s. il Properties Private Ltd., as competent person. In this regard, he has argued that the same was also mentioned in the legal notice issued to the

¶54

11 -

¶55

respondent/accused, and subsequently a complaint was filed. Therefore, learned counsel contended that there is prior authorisation before issuance of legal notice and filing of the complaint in favor of PW1. Learned counsel brought to the notice of the Court the discussion of the trial court and also the first appellate courts made at paras 19 of the judgments. The learned counsel argued that the said authorisation was not questioned by the petitioner/accused and she has not replied to the legal notice, therefore, such contention of the revision petitioner at this stage is not at all tenable.

¶56

I have perused the judgment of both trial court and appellate court and records of the case.

¶57

From the above materials, the point that arise for consideration of this Court is:-

¶58

"Whether the judgment passed by the LXV Addl. City Civil and Sessions Judge, Bengaluru in Crl.A.No.696/2016 confirming the judgment of conviction and sentence by learned XVI Addl. Chief Metropolitan Magistrate, Bangalore City in

¶59

12 -

¶60

C.C.No.4149/2015 is legal, correct or call

¶61

interference by this Court?"

¶62

I have perused the evidence meticulously. On

¶63

perusing the complaint which is marked as Ex-P4, it is evident that the written complaint was filed by M/s. il Proprieties Private Ltd., represented by its Director Sri. Appanna V.T. and complaint is also signed by him for M/s. il Properties Private Ltd., as authorised signatory and the seal and signature of the said person is appearing in all the pages. He has verified the same. In para 2 of the complaint, it is stated that the said complainant is a company incorporated under the provisions of the Companies Act, 1956 and the complainant company is represented by its Director, who is incharge and responsible for the day-to-day administration and affairs and functioning of the complainant company. Complainant has also stated about issuance of legal notice which was served on the accused. He has stated that said notice was not replied inspite of service. Hence, he has filed the complaint and he has also filed his sworn statement by way of

¶64

13 -

¶65

affidavit, wherein he has also stated on oath that he know the facts of the case and he is the Director and representative of the above said company and is incharge and responsible for the day-to-day affairs and functioning of the company. Complainant has reiterated the complaint averments in his sworn statement. It is also evident from the order sheet maintained by the trial court that when the complaint was filed, learned magistrate in his order of taking cognizance has mentioned that the complainant has filed his affidavit by way of sworn statement and also list of documents. After verification of the same and after perusing the complaint, documents and sworn statement, learned magistrate was of the opinion that there is prima-facie case made out by the complainant and took cognizance. The complaint containing list of documents as referred above shows that authorisation letter was also produced alongwith the complaint itself. Therefore, at this stage, the contention of Revision Petitioner that cognizance taken by the learned magistrate is illegal or wrong cannot be accepted.

¶66

14 -

¶67

In the examination-in-chief, the complainant PW1 has deposed that he had produced only four documents and in the cross examination, it is suggested that they have obtained blank cheque and signature of the accused, her husband and son on a stamp paper and blank paper, PW1 has denied it. It is further suggested that in the month of August 2014, accused has returned money and asked for return of the cheque, it was not returned, he has denied it. It is suggested that PW1 is not authorised to lodge the complaint, he has denied it. The oral evidence of PW1 corroborates his documentary evidence. Ex-P1 complaint. Ex-P2 bank endorsement, Ex-P3 copy of legal notice. Ex-P3(a) and (b) are the postal acknowledgments and Ex-P4 is the complaint.

¶68

It is pertinent to note that Ex-P3 legal notice was issued on 8th November 2014, wherein said counsel has clearly mentioned that as per the instructions of M/s.i1 Properties Private Limited, represented by its Director Appanna V.T., legal notice is given to the accused. Ex-P5 is the copy of the resolution

¶69

15 -

¶70

wherein the Directors of M/s. i1 Properties Pvt. Ltd., in the meeting held on 15th October 2014, resolved to take legal action against accused Smt. Mahadevamma for return of the cheque by the bank and authorising Sri. Appanna V.T., Director to take action in the matter. Said resolution is not challenged by the accused nor any reply notice was given by her. Ex-P3 is the legal notice. It is evident that resolution was passed on 15th October 2014. Subsequently, notice was issued on 8th November 2014. As per the authorisation issued by the company authorising Sri. Appanna V.T, Director, a complaint was filed wherein it is clearly averred in complaint that he is in charge and responsible for the day-to-day affairs administration of the company and he is authorised to file the complaint and accordingly, he has signed the complaint. Therefore, the contention of the revision petitioner that the complaint is not filed by authorised person of the company at this stage is not tenable.

¶71

In the decision of GEORGE JOSEPH referred supra, it is observed at para 6 as under :-

¶72

16 -

¶73

6. "In answer to the first point raised, it may be said following the view expressed in MMTC Ltd . v. Medchl Chemicals and Pharma Limited, (2002) 1 SCC 234, (relying on Vishwa Mitter v. OP Poddar, (1983) 4 SCC 701), anyone can set the criminal law in motion by filing a complaint of facts constituting an offence before a Magistrate entitled to take cognizance. No court can decline to take cognizance on the sole ground that the complainant was not competent to file the complaint. However, if any special statute prescribes offences and makes any special provision for taking cognizance of such offences under the statute, then the complainant requesting the Magistrate to take cognizance of the offence must satisfy the eligibility criterion prescribed by the statute. The only eligibility criteria prescribed by Section 142 of the NI Act is that the complaint must be by the payee or the holder in due course. That criteria is satisfied in the present case on hand, as the complaint is in the name and on behalf of the respondent company.

¶74

It is further opined (following Associated Cement Company Limited v. Keshvanand, (1998) 1 SCC 687) that a complainant must be a corporeal person who is capable of making a physical appearance in the court. If a complaint is made in the name of an incorporeal person (like a company or a corporation) it is necessary that a natural person represent such a juristic person in court. The court looks upon the natural person to be the complainant for all practical purposes. No magistrate shall insist that the particular person whose statement was taken on oath at the first instance, alone can continue to represent the company till the end of the proceedings. There may be occasions when different persons can represent the

¶75

17 -

¶76

company. It would be open for the de jure complainant company to seek permission of the court for sending any other person to represent the company in court. Thus even presuming that initially there was no authority, still the company can at any stage, rectify that defect .

¶77

Therefore, the question whether a person is competent and authorised to represent an incorporeal body such as a company or a corporation, in filing or presenting the complaint, would not normally be gone into in the court taking cognizance of a complaint, if the complaint is on behalf of the payee or the holder in due course of the cheque in question.

¶78

However, should the question be raised by the court in the course of the proceedings or is an objection raised by the accused, the complainant is bound to satisfy the court that the person prosecuting the complaint is competent and duly authorized by the incorporeal complainant to represent it. The contention that the question would be material only if there is a plea raised by the accused to that effect, is apparently taken drawing inspiration from the observation made by this court in the case of Sarathi Leasing Finance v. B.Narayana Shetty, 2006 (3) Kar.L.J 397. In that case, it was found as a fact that the complaint had been filed by the Managing Director of the complainant company, and that he was duly authorized under the Articles of Association to do so. Hence, the question whether the accused had raised a 'plea' in that regard did not arise at all and the observation was clearly obiter dicta, which is unwittingly and unnecessarily emphasized in the head note, to the report, by the concerned editor. Further, in the present case on hand, as can be

¶79

18 -

¶80

seen from the judgments of the trial court and the appellate court, the question has been raised by the accused and PW-1 has been cross-examined on this aspect.

¶81

However, the fact that the law requires a company or a corporate body to carry on its affairs in a particular manner and the question whether the proceedings have been instituted and is prosecuted in conformity with such requirements, is a question of law that should be satisfied as a matter of course and ought not to depend upon whether an objection has been raised or a 'plea' taken, if you will. The infirmity if noticed should be cured. It certainly cannot be ignored as being a mere technicality that would not vitiate the proceedings.

¶82

Section 291 of the Companies Act, 1956, did embody the principle that subject to the specific exceptions mentioned, the directors of the company, as its governing body, are entitled to exercise all the powers of the company. In the instant case on hand, it is noticed by the lower appellate court that the Articles of Association of the company, did confer the power on the Directors to sue or defend any proceedings on behalf of the company. A delegation of such power can only be by a resolution of the Board of Directors. Hence, a letter of authorization or a Power of Attorney executed by the Chairman or other officer of the company, without a delegation of the power to institute such proceedings having emanated from the Board of Directors, would invalidate any proceedings brought without the necessary authority. This lack of authority could have been supplied even before the appellate court when the issue arose for consideration, as has been observed by the Apex court in MMTC's case as well in the case of United Bank of India v. Naresh Kumar

¶83

19 -

¶84

(1996) 6 SCC 660. In other words even on a presumption, that in the face of a letter of authorization and a power of attorney having been executed, authorizing the concerned person to file and prosecute the complaint, that there was an implied authorization by the Board, it ought to have been formally ratified, when the same was questioned before the courts below.

¶85

This court has consistently held that for any person to represent and tender evidence in a court of law on behalf of a company, ought to be authorized under the Articles of Association of the company or by a separate resolution by the Board of Directors.

¶86

See : Menon Ventures, Bangalore v Birla 3M Limited, Bangalore, (2005 (5) Kar. L.J.448) ; Director, Maruti Feeds and Farms Private Limited, Dharwad v. Basanna Pattekar (2007 (5) Kar. L.J.310) and Om Shakthi Scheduled Castes and Scheduled Tribes and Minority Credit Co-operative Society Limited v M. Venkatesh (2008(2) Kar. L.J. 486; National Small Industries Corporation Limited v Harmeet Singh Paintal and another, (2010)3 SCC 330."

¶87

It is evident from the decision referred above, that

¶88

the coordinate Bench at para 6 has discussed various decisions of this Court and also Apex Court as to who can file the complaint and in the same decision itself, relying on the decision of MMTC Ltd ., v. Medchl

¶89

20 -

¶90

Chemicals and Pharma Limited⁴ , it is stated 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. It is further observed by coordinate Bench that under section 142 of the NI Act, the complaint must be by the payee or the holder in due course. That is the criteria to be satisfied at the initial stage. The Coordinate Bench has further observed that no magistrate shall insist that the particular person whose statement on oath at the first instance, alone can continue to represent the company till the end of the proceedings, but there may be occasions when different persons can represent the company. Therefore, the question whether a person is competent or authorised to represent an incorporeal body such as a company or a corporation in filing or presenting the complaint, would not normally be gone into in the court taking cognizance of a complaint, if the complaint is on behalf of the payee or the holder in due course of the cheque in question.

¶91

4 2002 1 SCC 234

¶92

21 -

¶93

The next decision of M/s. SURINDERA

¶94

STEEL ROLLING MILLS , referred supra, the head note cannot be disputed at all. In that case, the complaint was filed by a person who is not duly authorised. So cognizance taken is bad in law. That proposition has nothing to do with the present case. Further, the decision in CREF FINANCE LIMITED, KOLKATA referred supra, it is held at para 7 and 16 as under:-

¶95

7. The Board of Directors of the Company collectively entitled to exercise the powers and to do the acts on behalf of the Company. Section 291 of the Companies Act confers the authority to the Board of Directors collectively. Therefore, if a complaint is to be filed, it is necessary for the Board of Directors to authorize any person to file a complaint or depose to the facts in a case and such an authority could be granted by the Board of Directors only under a resolution. The complainant has produced Ex.P1, which is a certified copy of the Resolution dated 27.06.2000, which authorizes one Sri. Ravi Puri and Sri. Pramod Kumar, to sign any document in connection with the legal proceedings pertaining to recovery of the amount due and dishonour of cheques and to do all acts and deeds necessary in this behalf. It is in pursuance of this Resolution-Ex.P1 that P.W.1-Pramod Kumar has deposed on behalf of the Company. This Resolution authorizes the aforesaid two persons to do all necessary acts in the legal proceedings.

¶96

22 -

¶97

But, the perusal of the complaint reveals that it is signed by "Ravi Seth", who is said to be the authorized signatory and VicePresident of the Company. The name of Sri. Ravi Seth is not seen in the Resolution at Ex.P1. So also, the complainant has not produced any other Resolution or document conferring authority to Sri. Ravi Seth to file or sign a complaint on behalf of the Company. The appellant has not explained as to who authorized Sri. Ravi Seth to file or sign the complaint and no Resolution of the Board or any document has been produced in the evidence. Learned counsel for the appellant has not explained any authority having been granted to Sri. Ravi Seth to file a complaint on behalf of the Company. Therefore, the complaint of the appellant cannot be maintained in the absence of any authority to Sri. Ravi Seth to file the complaint on behalf of the Company. Mere fact that P.W.1Pramod Kumar was authorized on behalf of the Company either to file the complaint or depose to the facts, he having not signed the complaint, his authority in the absence of his signature on the complaint is of no help to the appellant. On this aspect of the matter, a reliance is placed on the decision of this Court DIRECTOR, MARUTI FEEDS AND FARMS PVT., LTD., vs. BASANNA PATTEKAR reported in ILR 2007 KAR. 3155, wherein it is held that the Company is a juristic person and any person on behalf of the Company has to be authorized by the Company under Articles of Association or by a separate resolution to depose on behalf of the Company. Therefore, this Court held that dismissal of the complaint is sound and proper. Though the decision refers to an authority to depose to the facts, the principle of law as such is applicable even to an authority to sign the complaint.

¶98

xxxxxxxxxxxxxxx

¶99

23 -

¶100

16. Despite the findings, the accused are due for the sum mentioned in the cheques-Exs.P4 to 7 and that P.W.1-Sri. Pramod Kumar has the authority to depose before the Court in the present case, the complaint instituted by the appellant in the trial Court is not maintainable for the sole reason that Sri. Ravi Seth, who has signed the complaint has no authority in law to represent the Company as there is no resolution by the Company authorizing Sri. Ravi Seth to file the complaint. The Trial Court in addition to other grounds has dismissed the complaint of the appellant on this ground as well. In this appeal though the appellant is able to establish all other grounds, as the complaint itself is incompetent for the reasons aforesaid, the dismissal order passed by the Trial Court cannot be interfered with."

¶101

This judgment is also of no use to the revision petitioner. In that case, the complaint was filed and signed by a person who has no authority in law to represent the company and there was no resolution of company authorising him to file the complaint. That proposition is well settled and reiterated by this Court and also Hon'ble Supreme Court in number of cases also. In that case, no proper authorisation was there to file complaint and hence the trial court had dismissed the complaint.

¶102

24 -

¶103

Here in this case, learned trial judge has discussed the said aspect at para 14 of the judgment and observed that PW-1 being Director and authorised person is competent to file the complaint. Learned sessions judge in his judgment at para 19 has also in detail discussed as to how this complainant who is examined as PW-1 is competent to file a complaint and depose in this regard.

¶104

As far as issuance of cheque and signature are not disputed by the complainant. Apart from that, there is presumption under section 139 of N.I. Act in respect of issuance of cheque and unless the same is rebutted by the accused either by cross-examination of PW-1 or lead defence evidence to show by preponderance of probability that presumption is not available and the contents of the complaint are not probable.

¶105

In this regard, the petitioner/accused has not let in any defence evidence to rebut such presumption and the cross examination of PW-1 does not disclose that the defence of the accused revision petitioner is

¶106

25 -

¶107

tenable. On the other hand, on perusal of section 142(a) of N.I. Act and section 138 of N.I. Act, the complainant has complied with the ingredients of said sections and there is no merit in the arguments advanced by learned counsel for the petitioner. Therefore, the contention of the revision petitioner that the complaint PW1 in this case lacks authorisation to file a complaint and to depose evidence on behalf of company has no basis. This revision petition is filed by the petitioner only to avoid her liability some how and there is no legal basis for the same. On the other hand, what is required is the complainant must be payee or holder in due course and if it is mandatory to satisfy that the complaint is in the name and on behalf of the company, then that satisfies the requirement of section 142 of N.I. Act. Here, it is the i1 Properties Private Ltd., which is payee or holder in due course which is not disputed by the complainant It has authorised Sri. Appanna V.T. to issue legal notice by engaging counsel and lodge the complaint and authorisation is given by passing a resolution in the Board of Directors which is

¶108

26 -

¶109

evident from Ex-P5. Learned counsel for revision petitioner argued that the said resolution does not bear any date and the Director has not signed it.

¶110

In another decision, the Hon'ble Supreme Court in the case of BHUPESH RATHOD v. DAYASHANKAR PRASAD CHAURASIA AND ANOTHER⁵ , the same is dealt with, wherein it is held that “ while we turn to the authorisation, it was a copy and, thus, does not have to be signed by the Board Members, as that would form a part of the minutes of the Board meeting and not a true copy of the authorisation. We also feel that it has been wrongly concluded that the Managing Director was not authorised”. Here in the present case on perusing ExP5, the same discloses the date of resolution passed by the Board of Directors authorising the present complainant to lodge a complaint. Just because the same does not bear the date when the authorisation is issued does invalidate the resolution of the Board of Directors authorising the complainant. On the other

¶111

5 AIR 2021 SC 5726

¶112

27 -

¶113

hand, the Hon'ble Supreme Court in the case of BHUPESH RATHOD referred supra, at paras 21, 23 and 24 considered the said aspect and it is stated at para 23 that it would be too technical a view to take to defeat the complaint merely because the body of the complaint does not elaborate upon the authorisation . The Court referred to the authorisation which was a copy and it is stated that it does not have to be signed by the Board Members, as it would form a part of the minutes of the Board meeting and not a true copy of the authorisation . Therefore, the Hon'ble Supreme Court was of the opinion that it has been wrongly concluded that the Managing Director was not authorised.

¶114

Further, the Hon'ble Supreme Court while considering sections 142 and 138 of N.I. Act in the case of M/s. M.M.T.C. LTD & ANR., v. M/S. MEDCHL CHEMICALS & PHARMA (P) LTD.,⁶ it has held that even if the complaint is lodged by the Manager or who had not been authorised by the Board of Directors to sign and file the complaint on behalf of the company is not a

¶115

6 2002 CRL.L.J. 266

¶116

28 -

¶117

ground to quash the complaint since said defect is curable. Therefore, here in the case on hand, at the time of filing of the complaint, the complainant has produced the authorisation. Simply because it was not marked due to oversight or some inadvertence, it is not a ground for the revision petitioner to take such a stand. The Hon'ble Supreme court in the case of M/s. SHANKAR FINANCE & INVESTMENTS v. STATE OF ANDHRA PRADESH AND OTHERS⁷ has elaborately discussed as to how a complaint under section 138 of N.I. Act is to be filed by a company and what are the requirements of section 142(a) of taking cognizance of the offence and who should represent the payee where the payee is a company or sole proprietrix one and said aspect was dealt at para 7 which reads as under:-

¶118

7. The payee of the cheque is M/s Shankar Finance & Investments. The complaint is filed by "M/s Shankar Finance & Investments, a proprietary concern of Sri Atmakuri Sankara Rao, represented by its power of Attorney Holder Sri Thamada Satyanarayana". It is therefore evident that

¶119

7 (2008) 8 SCC 536

¶120

29 -

¶121

the complaint is in the name of and on behalf of the payee.

¶122

Section 142(a) of the Act requires that no Court shall take cognizance of any offence punishable under section 138 except upon a complaint made in writing by the payee. Thus the two requirements are that (a) the complaint should be made in writing (in contradistinction from an oral complaint); and (b) the complainant should be the payee (or the holder in due course, where the payee has endorsed the cheque in favour of someone else). The payee, as noticed above, is M/s Shankar Finance & Investments. Once the complaint is in the name of the `payee' and is in writing, the requirements of section 142 are fulfilled. Who should represent the payee where the payee is a company, or how the payee should be represented where payee is a sole proprietary concern, is not a matter that is governed by section 142, but by the general law."

¶123

Therefore, in view of the principles stated in the aforesaid decisions and the evidence on record and records of the case, if the judgment of the trial court

¶124

30 -

¶125

which is confirmed by the learned sessions Judge in Crl.A.696/2016 is considered, then it is evident that both the courts have rightly appreciated the evidence on record as per the settled principles regarding appreciation of evidence in the cases of dishonour of cheques which is popularly called as 'Cheque bounce cases'. Both the courts have rightly raised a presumption arising in favour of the complainant and have come to the conclusion that the revision petitioner has failed to rebut said presumption. Regarding cognizance and also requirements under sections 142 and 138 of N.I. Act, both courts rightly held that the complaint filed by the respondent/complainant is legal and proper. Therefore, in view of the reasons stated above, this revision petition being devoid of merit is liable to be dismissed.

¶126

Accordingly, I pass the following:

¶127

ORDER

¶128

The revision petition is dismissed.

¶129

31 -

¶130

The judgment passed by the learned Sessions Judge in Crl.A.No.696/2016 dated 15th March 2019 which has confirmed the judgment of conviction and order of sentence passed by learned XLII Addl. Chief Metropolitan Magistrate, Bengaluru dated 11th May 2016 in C.C.No.4149/2015 is hereby confirmed.

¶131

Send back the records to the trial court.

¶132

Sd/JUDGE

¶133

*mn/-

Smt Mahadevamma v. M/S iL Proprietors Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

Smt Mahadevamma v. M/S iL Proprietors Pvt. Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Bhojaraj S/O Yeshwanthrao Samane Vs Santosh /O Bhimrao Manami

Bhojaraj S/O Yeshwanthrao Samane Vs Santosh S/O Bhimrao Manami

Veerendra S/O Chandrashekar Para Vs Smt. Sangeeta W/O Veerendra Para

Sri K Guru Prasad Karohatikar Vs Chikkaputtegowda

M G Siddappa Vs Mallikarjuna M

Smt M Soubhagyalakshmi Vs Sri R S Venkataraman