Back
In the High Court of Bombay at Nagpur
T.V. NALAWADE
Diffusion Engineers Ltd.
Versus
Shakti Chakravarty & Another
Criminal Appeal No. 284 of 1999
Decided on: 20-04-2012
Negotiable Instruments Act - Representation of Company - The court interpreted Section 142 of The Negotiable Instruments Act, 1881, and held that for taking cognizance of an offence under section 138, the complaint in writing must be filed by the payee or the holder in due course of the cheque. The court referred to the case of National Small Industries Corporation Limited vs. State (NCT of Delhi) and others, (2009) 1 Supreme Court Cases 407, where it was established that a company can be represented by an employee or a non-employee authorized and empowered to represent the company by a resolution or power of attorney. In the present case, the employee who signed the complaint was not authorized, and thus, the cognizance of the complaint could not have been taken by the court.
Fact of the Case:
The trial court acquitted the respondent of the offence under section 138 of The Negotiable Instruments Act, 1881, on the ground that the complaint was not filed by the payee company in whose favour the cheque was issued.
Finding of the Court:
The court found that the complaint was not filed in accordance with the provisions of Section 142 of The Negotiable Instruments Act, and as the employee who signed the complaint was not authorized to represent the company, the cognizance of the complaint could not have been taken by the court. The court also noted that the cause of action took place in 1996, and thus, no interference was warranted in the judgment and order of the trial court.
Issues: The issues revolved around the filing of the complaint under Section 138 of The Negotiable Instruments Act and the representation of the company in the complaint.
Ratio Decidendi: The court's decision was influenced by the interpretation of Section 142 of The Negotiable Instruments Act and the established legal principle that a company can be represented by an authorized employee or non-employee empowered to represent the company.
Final Decision: The appeal was dismissed, and no interference was warranted in the judgment and order of the trial court.
The appeal is filed against the Judgment and order of Criminal Complaint Case No. 320/1996 which was pending in the Court of Judicial Magistrate First Class, Nagpur. The trial Court has acquitted the respondent of the offence under section 138 of The Negotiable Instruments Act,1881. Both sides are heard and this Court has perused the original record.
2. The trial Court has acquitted the respondent on the ground that the complaint was not filed by the payee company in whose favour the cheque was issued. On this point, Section 142 of The Negotiable Instruments Act is relevant, the provision of which shows that for taking cognizance of such offence the complaint in writing must be filed by the payee or as the case may be the holder in due course of the cheque. The Apex Court has made interpretation of this provision in the case of National Small Industries Corporation Limited vs. State (NCT of Delhi) and others, (2009) 1 Supreme Court Cases 407. The Apex Court has laid down that a Company can be represented by an employee or even by a non-employee authorized and empowered to represent the Company either by a resolution or by a power of attorney. Admittedly, in the present case, the employee, who had signed the complaint, was not holding the power of attorney or any resolution made by the Board of Directors in his favour. Thus, the cognizance of the complaint could not have been taken by the Court.
3. In view of the procedure laid down for filing the complaint, nothing can be achieved by setting aside the Judgment. The cause of action took place in the year 1996 and so cognizance of the offence cannot be taken now. In view of this, no interference is warranted in the Judgment and order of the trial court and so the appeal stands dismissed.
AI
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
