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2007 Supreme(Kar) 314

Karnataka High Court
Judges : V.G.SABHAHIT
DIRECTOR MARUTI FEEDS AND FARMS PVT LTD. - Appellant
Versus
BASANNA PATTEKAR - Respondent
Criminal Appeal 1780 Of 2006
Decided On : 06/05/2007
Advocates Appeared :
U.C.Vasanth

The central legal point established in the judgment is that a person representing a company must be authorized by the company under the Articles of Association or by a separate resolution to depose on behalf of the company.

Headnote:

Authority - Company Director - The court upheld the judgment of acquittal, ruling that the complainant, as a company director, failed to prove his authority to depose on behalf of the company, as required by the Articles of Association or a separate resolution.

Fact of the Case:

The appeal was filed against the judgment of acquittal passed by the trial court in a case related to Section 138 of the Negotiable Instruments Act. The appellant, a director of the complainant company, argued that he was authorized to depose on behalf of the company, but the trial court held otherwise.

Finding of the Court:

The court upheld the judgment of acquittal, stating that the appellant failed to prove his authority to depose on behalf of the company, as required by the Articles of Association or a separate resolution. The court did not find any ground to interfere with the trial court's decision.

Issues: The main issue was whether the appellant, as a company director, had the authority to depose on behalf of the company, as required by the Articles of Association or a separate resolution.

Ratio Decidendi: The court ruled that since the company is a juristic person, any person on behalf of the company has to be authorized by the company under the Articles of Association or by a separate resolution to depose on behalf of the company.

Final Decision: The appeal was disposed of with the observation that the acquittal of the accused on the ground that the appellant failed to prove his authority to depose on behalf of the company would not preclude the appellant from working out the remedy in accordance with the law.

SABAHIT, J, J.


( 1 ) HEARD Learned Counsel appearing for the appellant. This appeal filed by the complainant is directed against the judgment of acquittal dated 5-8-2006 passed by the JMFC, Dharwad in CC no. 483/2003.

( 2 ) THE Learned Counsel appearing for the appellant submitted that P. W. 1 is a Director of the complainant-company and he was authorised to depose on behalf of the company and the trial Court was not justified in holding that P. W. 1 had no authority to depose on behalf of the company and that the trial Court has erred in holding that the complainant has failed to prove the ingredients of Section 138 of the Negotiable Instruments Act.

( 3 ) I have considered the contentions of Learned Counsel with reference to the material on record. It is not disputed that the complainant is a company registered under the Companies Act and p. W. 1 apart from his own self serving statement that he is the Director who is authorised to depose on behalf of the company, has not produced any documentary evidence to show that he is the Director and he has been authorised by the company to depose on behalf of the company. The resolution of the company is not produced and he has pleaded his ignorance in the cross examination about the resolution passed by the Board of Directors. Since the company is a juristic person, any person on behalf of the company has to be authorised by the company under the Articles of Association or by a separate resolution to depose on behalf of the company and therefore, finding of the Trial Court is justified and it is unnecessary to go into the other reasons recorded by the Trial Court in dismissing the complaint and acquitting the accused. I do not find any ground to interfere with the judgment of acquittal passed by the Trial Court. However, acquittal of the accused on the ground that P. W. 1 has failed to prove that he was authorised by the company to depose on its behalf would not preclude the appellant to work out the remedy in accordance with law as other contentions are not gone into while confirming the judgment of acquittal passed by the Trial Court. Accordingly appeal is disposed of with the above said observations.

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