IMPORTANT POINT
Dishonour of cheque—A company, though a legal entity, can act only through its Board of Directors.

JUDGMENT

Anand Byrareddy, J.— This appeal is filed by the complainant, who had alleged an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ‘N.I. Act’ for brevity), against the respondent.

2. The appellant is a company incorporated under the Companies Act, 1956. It is engaged in the business of manufacturing automobile spring leaves in the name and style of M/s. Canara Springs. Its Head Office is at Mangalore and one of its branch offices is at Hubli. The respondent accused. was said to be a dealer in automobile spare parts, having his place of business at Athani and was purchasing the goods manufactured by the appellant on credit basis. That as per the books of account maintained by the appellant, the accused was said to be due in a sum of Rs. 70,294 payable towards the credit purchases, as on 31.8.2004. Since there was delay in making payments, the complainant had issued a notice seeking prompt payment. It transpires that a part payment was made in cash and the respondent had issued a cheque for the balance amount of Rs. 65,294 in discharge of the amount outstanding. The cheque when presented for collection was dishonoured for want of funds. When the respondent was informed of the same, he had requested for time to pay the amount and ultimately issued a cheque endorsed in blank with instructions to the appellant to present the same for collection in the third week of February, with due information to the respondent. Therefore, the same was presented as per the instructions of the respondent while indicating the date of the cheque as 22.2.2006 and presented the same through the appellant’s banker and the same was dishonoured. Therefore, a notice was issued in terms of Section 138 of the N.I. Act within the time prescribed and since there was non-compliance with the demand, a complaint was filed. The same was contested. One of the objections raised was that the complaint was not brought be an authorized person to represent the company and therefore the complaint could not be entertained apart from raising contentions as to the validity of the transaction, etc.

3. The Court below while addressing the complaint on merits, has considered the point whether the complaint was filed and prosecuted by a person competent to represent the complainant-company and has answered the same in the negative, while also answering other questions, as regards the transaction, also in favour of the respondent and consequently acquitted the accused-respondent. It is that which is under challenge in the present appeal.

4. After having heard the learned Counsel for the appellant and the respondent and after considering the case law that was cited, at the bar, the question as to whether the complaint was filed and prosecuted by an authorised person to represent the complainant-company if answered in the negative, the other points arising in the case may not require to be considered. It is only if it is held otherwise that this Court may have to examine other aspects. Therefore, the focus of the rival contentions was directed towards this aspect of the matter.

There are divergent views expressed by several High Courts on the above point. Some of the views expressed are noted below.

In Gopalakrishna Trading Company v. D. Baskaran1, in addressing the question as to what would be the procedure to be followed in the case of a complaint by a company, in terms of Section 138 of the N.I. Act, where the complaint was lodged by the Manager of a company, the following view was expressed:

“Known well, it is the company is a legal entity, not having soul, mind, body and limbs to walk to the Court for preference of a complaint for the alleged refraction or violation of the provisions of Section 138 of the Negotiable Instruments Act. The company as such has to be represented by some human agency in preferring a complaint before the Court. There is no express or explicit provision in the Act as to in what manner