JUDGMENT
M. Karpagavinayagam, J.
1. These four petitions could be disposed of by a common order, since these petitions relate to the quashing of the proceedings arising out of four complaints filed for the offence under Section 138 of the Negotiable Instruments Act, 1881, in which the parties are the same.
2. The one and the only ground urged by counsel for the petitioners in these petitions seeking to quash the proceedings is this : the complaints have been presented on behalf of the limited company, but the complaints do not reveal any authorisation either by way of board’s resolution or power of attorney enabling the executant of the complaints, viz., one P. Govindarajulu, a director of the said company, to execute and present the same before the court.
3. Counsel for the petitioners, on the strength of the decisions in Sudesh Kumar Sharma v. K.S. Selvamani [1994] 4 CCR 2374 ; [1995] 84 Comp Cas 806 (Mad), Ruby Leather Exports v. K. Venu [1994] (1) III Crimes 820 ; [1995] 82 Comp Cas 776 (Mad), Satish and Company v. S.R. Traders [1997] 1 ALD (Crl.) 747 (AP) ; [1999] 95 Comp Cas 836 and Swastik Coaters Pvt. Ltd. v. Deepak Brothers [1997] 89 Comp Cas 564 ; [1997] 1 ALD (Crl.) 370 (AP) would contend that in the absence of any authorisation or power of attorney issued by the complainant company, the director, on behalf of the company, cannot maintain the complaints and admittedly in this case, there is no reference about the power of attorney or authorisation in the complaints or in the sworn statement and as such, the proceedings initiated on these complaints against the petitioners are liable to be quashed. In the complaint, the following cause title has been given :
“M/s. Valuable Steels (India) Pvt. Ltd.,
12, Neelakanda Mehta Street,
T. Nagar,
Madras 600 017.
rep. by its Director,
Mr. P. Govindarajulu.”
4. The averments in the body of the complaints are that the accused, the managing director (A2) and director (A3) on behalf of the company (Al) approached the complainant for financial assistance in connection with their business, that with such financial assistance, the accused got the supply of materials, that the accused persons issued cheques to the complainant, that when the complainant through its bankers presented the cheques, the same were dishonoured, that the complainant issued a notice and that in spite of the receipt of the notice, the accused did not make any payment.
5. In the sworn statement, which was recorded by the Magistrate before taking the case on file, Govindarajulu, the director of the company on behalf of the complainant company has mentioned as follows :
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If the above cause title as well as the averments made in the complaints and the sworn statement are perused, it emerges that the complaints had been filed by Valuable Steels (India) Limited represented by its director Govindarajulu. It is not as if the complaints had been lodged by the said Govindarajulu in his individual capacity.
Explanation (a) to Section 141 of the Negotiable Instruments Act defines the company for the purpose of this Act as under :
“Explanation.–For the purpose of this Section (a) ‘company’ means any body corporate and includes a firm or other association of individuals.”
Section 142{a) deals with cognisance of offences and the same reads as under :
“Cognisance of offences.–Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),
(a) no court shall take cognisance of any offence punishable under Section 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.”
6. The reading of the above provision would go to show that for the violation of the provisions of Section 138 of the Negotiable Instruments Act, the court is empowered to take cognisance of such offence only if the complaint is preferred by the payee or the holder in due course of the cheque.
7. The definition of the word “company” as extracted above would reveal that any body corporate including a firm or other association of individuals which may be the payee or the holder in due course of the cheque.
8. Admittedly, the payee in this case is the company on whose behalf these complaints have been laid.
9. The question that arises now for consideration is as to what is the procedure to be followed in the case of lodging of a complaint by the company as defined under the Act.
10. It is true that the company is a legal entity. But, it does not have a soul, mind, body and limbs to go to the court for preferring a complaint for the alleged infraction of the provisions of Section 138 of the Negotiable Instruments Act. The company has necessarily to be represented by some human agency in preferring a complaint. There is no express or explicit provision in the Act as to in what manner the company is to be represented in preferring a complaint before the court for the above referred offence.
11. Therefore, a company has to present a complaint before the court through some person connected with the affairs of the company. The person connected with the affairs of the company, in the normal functioning, may be either its manager, partner, managing partner or director or any other person authorised by the company who can represent it during the course of legal proceedings before the court.
12. In the instant case, counsel for the petitioners by citing two decisions, namely, Swastik Coolers Pvt. Ltd. v. Deepak Brothers [1997] 89 Comp Cas 564 ; [199711 ALD (Crl.) 370 (AP) and Satish and Company v. S.R. Traders [19971 1 ALD (Crl.) 747 (AP) ; [1999] 95 Comp Cas 836, rendered by the Andhra Pradesh High Court, would vehemently submit that neither the manager nor the director, though they are connected with the affairs of the company, can be permitted to file a complaint without any authorisation by the company.
13. The relevant observation in Swastik Coaters Pvt. Ltd. v. Deepak Brothers [1997] 89 Comp Cas 564 ; [1997] 1 ALD (Crl.) 370 (AP) is given below (page 569) :
“According to the cheque, the payee is the company itself and it is the company who is the holder in due course and cause of action arises necessarily in favour of the company. A director of the company cannot be said to be a holder in due course since the company by itself is a legal person. Of course one of the directors can present a complaint if there is a proper authorisation in favour of such a director. . . .One of the directors of the company cannot be said to be a payee or holder in due course in terms of Section 142(a) of the Negotiable Instruments Act.”
14. In Satish and Company v. S. R. Traders [1997] 1 ALD (Crl.) 747 (AP) ; [1999] 95 Comp Cas 836, 844, the relevant observation is as follows :
“Even if the cause title of the complaint describes the company as the complainant through the manager, the point for consideration would be whether such a complaint is competent without such authorisation. According to me, even if the company is the complainant represented by its manager, such manager shall necessarily be an authorised manager so that the Magistrate can take cognisance of the offence.”
15. Both the above two decisions were rendered by the single judge of the Andhra Pradesh High Court, when the appeal against the acquittal was dealt with. However, the point decided in both these authorities is that neither the manager nor director of the company can file a complaint, unless there is an authorisation by the company.
16. It is also held in the above decisions that the director or the manager of the company cannot be said to be a payee or a holder in due course, since the company by itself is a legal person.
17. With great respect to the learned single judge, the view taken in these decisions may not be correct, in view of the decisions rendered by this court earlier.
The first decision is Gopalakrishna Trading Co. v. D. Baskaran [1992] 3 Crimes 1094 ; [1994] 80 Comp Cas 53 (Mad). In this decision, Janarthanam J., while dealing with the very same question, has observed as follows (page 56) : “The dictates of common sense, practical wisdom, prudence and experience impels the court in such a situation to enable the company to represent a complaint before the court represented by some person connected with the affairs of the company. The person connected with the affairs of the company, in the normal run of things may be either its manager, partner, managing partner or director or any other person authorised by the company who can represent it during the course of legal proceedings before the court. Only by making such a construction and interpretation of the provisions of the aforesaid sections, that the provisions of the Act can be made to work and life thereby given, having teeth for the enforcement of the provision or any other interpretation given would have the effect of making no sense of those provisions, and will be only in the sense of defeating the very object for which the provisions had been enacted by the Legislature.”
18. When this decision was brought to the notice of the Andhra Pradesh High Court in Satish and Company v. S. R. Traders [1997] 1 ALD (Crl.) 747 (AP); [1999] 95 Comp Cas 836 the said High Court observed that this decision of this court cannot be taken as laying down the correct law.
19. I do not see any reason to come to the conclusion that the decision of this court rendered by Hon’ble Justice Janarthanam in the above citation is wrong.
The Andhra Pradesh High Court in Satish and Company v. S.R. Traders [1997] 1 ALD (Crl.) 747 (AP) ; [1999] 95 Comp Cas 836, fully discussed the above said point of law by referring to Order 29, Rule 1 of the Civil Procedure Code and also relating to the petition presented before the Company Law Board for prevention of oppression and mismanagement on behalf of the company without the approval of the board.
20. The discussion with reference to the Civil Procedure Code and provisions of the Companies Act relating to the filing of an application before the civil court and the Company Law Board would not in any way, in my humble opinion, help in answering the question posed in the instant case.
21. As I said earlier, the cause title as well as the averments made in the complaints and the sworn statement would disclose that the complaints had been filed by the company represented by the director and as such, the company alone approaches the court as payee as provided under Section 142 of the Negotiable Instruments Act.
22. In the decision, as referred to above rendered by this court in Gopalakrishna Trading Co. v. D. Baskaran [1992] 3 Crimes 1094 ; [1994] 80 Comp Cas 53 (Mad), it has been held that if a person is connected with the affairs of the company in the capacity of director or manager, etc., he comes to the court by getting into the shoes of the company. If any other person, who is not connected with the affairs of the company approaches the court, then to get into the shoes of the company, the authorisation or power of attorney is a must.
23. While referring to the same question, I had an occasion to render a judgment on this point in Sajjayadurai v. J. D. Electronics [1997] 1 LW (Crl.) 297; [1999] 95 Comp Cas 337 (Mad) following the decision in Gopalakrishna Trading Co. v. D. Baskaran [1992] 3 Crimes 1094 ; [1994] 80 Comp Cas 53 (Mad). The relevant observation of mine is as follows (page 338) :
“In this case there is no dispute that the complainant is a manager representing their company which is a firm. Furthermore, it is quite clear that the complainant being a manager, on behalf of the firm has signed in some of the documents such as agreements in which the accused is one of the parties and these documents have been filed along with the complaint before the court. All these things would go to show that the manager/complainant is very well connected with the affairs of the partnership firm on whose behalf the complaint has been made. In these circumstances, it cannot be stated that the manager representing the company shall obtain a special permission or authorisation from the company and file it along with the complaint.”
24. There is no dispute in the concept that the company being by itself a legal person as a payee or a holder in due course, alone could file the complaint under Section 142 of the Negotiable Instruments Act. It is also not in dispute that a director or a manager in his individual capacity cannot be said to be a payee or a holder in due course in terms of Section 142(a) of the Act.
25. But in the instant case, as per the cause title and the averments, the complainant company has approached the court through some human agency, namely, a director of the company, in preferring the complaints, as the company has no soul, mind, body and limbs. If the company approaches the court through some other person, who is not connected with the affairs of the company, then necessarily it has to authorise that person to file the complaint on its behalf. Therefore, in this case, the company being the complainant through its director is competent to file the complaints even without any authorisation.
26. This concept could be inferred by looking from some other angle also. The Act does not provide any mode as to how a complaint can be filed by and on behalf of the company. However, under Section 141(1) of the Act, if the offence is committed by the company under Section 138 of the Act, it is provided that every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
27. Sub-section (2) of Section 141 provides that in case, it proves that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
28. Thus, from the reading of Section 141 of the Act, so far as the firm or any other company or a corporate body is concerned, a person who was in charge of, and was responsible to, the company shall be guilty of the offence for the purpose of Section 138 of the Act.
29. On the basis of Section 141 of the Act though it contemplates a case in which company is an accused, on the basis of the same analogy, even in the case of company being the complainant, it can be inferred that the person who can file a complaint on behalf of the company would be a person who is in charge of, or was responsible to, the company. In other words, he must be a person whose actions would be binding on the company.
30. In the context of this interpretation, if we look at the sworn statement and the complaints, it would be very clear that the accused approached Govindarajulu, the director of the company, on behalf of the company for the financial assistance, who, in turn, gave the money and in the discharge of the existing liability, the cheques were handed over to the company, which were received by the director, and were subsequently dishonoured. Thus, it is clear that the director is such a person, whose actions would bind the company, which he represents in the above complaints.
31. In view of my above conclusion, on the strength of the decisions in Gopalakrishna Trading Co. v. D. Baskaran [1992] 3 Crimes 1094; [1994] 80 Comp Cas 53 (Mad) and Sagayadurai v. J. D. Electronics [1997] 1 LW (Crl.) 297 ; [1999] 95 Comp Cas 337 (Mad), I am inclined to hold that the complaints are valid and the same are in accordance with law and the decisions rendered in Satish and Company v. S.R. Traders [1997] 1 ALD (Crl.) 747 (AP) ; [1999] 95 Comp Cas 836 and Swastik Coalers Pvt. Ltd. v. Deepak Brothers [1997] 89 Comp Cas 564 ; [1997] 1 ALD (Crl.) 370 (AP) by the Andhra Pradesh High Court, cannot be taken as laying down the correct law.
32. In the result, the petitions are dismissed at the stage of admission itself. Consequently, Criminal Miscellaneous Petitions Nos. 6642 to 6653 of 1997 stand dismissed.