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2002 Supreme(Kar) 81

Karnataka High Court
C.Prabhu - Appellant
Versus
Sangam Corporation, Bangalore - Respondent
Decided On : 01-30-02
CRI.PETN. : 1983 of 2001

Advocates:
BIRDY AIYAPPA, CHANDULAL WNNA, SRIVASTAVA

The eligibility criterion for filing a complaint under S. 138 of the Negotiable Instruments Act must be by a payee or the holder in due course of the cheque, and the inherent power of quashing criminal proceedings should be used stringently and with circumspection.

Headnote:

S. 138 - Negotiable Instruments Act - [S. 200, S. 138 of the Negotiable Instruments Act] - The court discussed the eligibility criterion for filing a complaint under S. 138, stating that it must be by a payee or the holder in due course of the cheque. The court emphasized that the provisions of other Acts, like the Indian Partnership Act, are not attracted to the proceedings under the Negotiable Instruments Act. The court also highlighted that the inherent power of quashing criminal proceedings should be used stringently and with circumspection, and that the court need not go into the merits at the initial stage.

Fact of the Case:

The respondent-Corporation filed private complaints against the petitioner for issuing cheques with insufficient funds. The petitioner challenged the competency of the Manager of the respondent/company to file the complaints.

Finding of the Court:

The court found that the Manager of the respondent/company was competent to file the complaints, and the proceedings were not to be quashed on the ground of non-production of authorization or capacity of the Manager to represent the complainant at the initial stage.

Issues: Competency of the Manager of the respondent/company to file the complaints and the quashing of proceedings on the ground of non-production of authorization or capacity of the Manager.

Ratio Decidendi: The eligibility criterion for filing a complaint under S. 138 must be by a payee or the holder in due course of the cheque. The provisions of other Acts, like the Indian Partnership Act, are not attracted to the proceedings under the Negotiable Instruments Act. The inherent power of quashing criminal proceedings should be used stringently and with circumspection.

Final Decision: The court dismissed the petitions as devoid of merits.

S. R. BANNURMATH, J.

( 1 ) THESE petitions are filed under S. 482 of the Criminal Procedure Code for quashing the proceedings in Criminal Cases Nos. 27176 and 27177 of 2000 on the file of the XIV Additional Chief Metropolitan Magistrate, Bangalore.

( 2 ) THE brief facts giving rise to the present petitions are as follows : The respondent-Corporation has filed private complaints under S. 200, Cr. P. C. against the petitioner for an offence under S. 138 of the Negotiable Instruments Act on the ground that the petitioner had borrowed certain amounts from the complainant and in this regard towards the repayment of the same he had issued two cheques one dated 15-2-2000 for Rs. 1,60,000/- and the other dated 22-2-2000 for Rs. 1,52,200/- - drawn on Indian Overseas Bank, Malleswaram, Bangalore. It is alleged that when the cheques were presented for collection the same were returned with endorsements "insufficient fund". It is contended that in spite of issuing legal notices as required by the law which came to be returned with endorsements from the Postal Department "not claimed - return to sender". Thereafter, another notice also sent which was received by the petitioner, but, as no payment was made the present private complaints filed to take action and punish as per law.

( 3 ) ON presentation of the complainants the learned Magistrate took cognizance of the offence and registered the cases in PCR Nos. 693/2000 and 696/2000. After recording the sworn statements of the complainant, the learned Magistrate ordered issue of process to the accused/petitioner.

( 4 ) AS such, being aggrieved by the orders dated 18-9-2000 issuing process to the petitioner passed by the learned Magistrate the present petitions are filed. The main contentions raised in the petitions are regarding the competency of the Manager of the respondent/company. It is contended that under S. 69 (2) of the Indian Partnership Act no suit and proceedings shall be instituted unless the firm is registered and the person suing has been shown in the register of the firms as a partner. As such, it is contended that basically Manager cannot file the complaints. It is also contended that even if it is held that Manager can file a complaint, as on the date of filing of the complaint, as the said Manager has not filed the authorisation or power of attorney from the firm, the learned Magistrate should have held that the Manager has no locus standi to file the complaints and as such initiation of the proceedings and issue of process is illegal and liable to be quashed. In this regard, several pronouncements of various Courts have been relied upon by the learned counsel for the petitioner. These are as follows :1. Ruby Leather Exports v. K. Venu (1995 (82) Com. Cases, 776) (Madras High Court); 2. S. Ramaswamy v. K. Sudarsan Rao 1995 (83) Com. Cases, 673 (Madras High Court); 3. Sudesh Kumar Sharma v. K. S. Selvamani 1995 (84) Com. Cases 806) (Madras High Court); 4. S. Krishnamurthy v. A. R. Rajan 1996 Cri LJ 3552 (Madras High Court); 5. M/s. Mohanlal Khemchand v. Pawan Kumar Mohanka (1996 Cri LJ 2927) (Calcutta High Court); 6. P. A. Verghese v. MAA Communications Pvt. Ltd. 1997 Cri LJ 4208) (Karnataka High Court); 7. M/s. Satish and Company v. M/s. S. R. Traders (1998 Cri LJ 419) (Andhra Pradesh High Court); 8. M/s. Swastik Coaters Pvt. Ltd. v. M/s. Deepak Brothers 1997 Cri LJ 1942) (Andhra Pradesh High Court); and 9. M. A. Hussain v. Panchamal Vasudev Ganapathi Kamath and Brothers (1970 (2) Mys LJ 27 (Mysore High Court) : (AIR 1970 Mys 299 ).

( 5 ) ON the other hand it is argued on behalf of the complainant that these decisions are not applicable to the present cases. It is contended that there is no prerequisite condition of filing any authorisation while filing a criminal case. The question whether a person has authorisation or not has to be decided only at the final hearing stage of the case and keeping in view the well-settled principles of law laid down by the Hon'ble Supreme Cou









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