RAJASTHAN HIGH COURT
Atul Kumar Jain, J.
Sidharth Raja Enterprises Pvt. Ltd. (M/s.) - Appellant
Versus
Shanti Lal Mehta - Respondent
S.B. Criminal Revision Petition Nos. 861, 887-898 of 2012.
Decided On : 20-09-2013
NEGOTIABLE INSTRUMENTS ACT, 1881 - SECTION 138 - SECTION 142(A) - SECTION 142(B) - A complaint under Section 138 of the Negotiable Instruments Act, 1881 can be filed by any of the Directors of the Company and at the time of cognizance, the Court has to see only basic requirements of Section 138 of the Act and not conduct a mini trial to appreciate evidence.
Fact of the Case:
The accused-non-petitioners filed criminal revisions challenging the order of the Trial Court taking cognizance against them under Section 138 of the Negotiable Instruments Act, 1881. The Revisional Court quashed the Trial Court's order, holding that the complainant-company's Director, Mahaveer Singh Kothari, lacked the authority to file the complaint.
Finding of the Court:
The High Court held that the Revisional Court erred in conducting a mini trial and engaging in fact-finding at the stage of cognizance. The Court emphasized that the Trial Court should have limited its inquiry to the basic requirements of Section 138 of the Act and not delved into the issue of Mahaveer Singh Kothari's authorization.
Issues: 1. Whether the Revisional Court erred in quashing the Trial Court's order taking cognizance under Section 138 of the Negotiable Instruments Act, 1881. 2. Whether the Trial Court should have conducted a mini trial or fact-finding inquiry at the stage of cognizance.
Ratio Decidendi: The High Court relied on the Supreme Court's decision in M.M.T.C. Ltd. & Anr. v. Medchl Chemicals & Pharma (P) Ltd. & Anr., which held that a complaint under Section 138 of the Act can be filed by an employee of the company without prior authorization, and that such authorization can be rectified at a subsequent stage. The Court also noted that Section 142(b) of the Act does not require the complaint to be signed by the complainant.
Final Decision: The High Court quashed the Revisional Court's order and directed both parties to appear before the Trial Court for further proceedings.
(1) Indra Kumar Patodia & Anr. v. Reliance Industries Ltd. & Ors., Criminal Appeal No. 1837 of 2012 reported in 2009 (1) NIJ 39 (SC) decided by the Hon'ble Supreme Court on 22.11.2012.
In the above case, it was held in para 19 that a complaint under Section 138 of the Act of 1881 even without signature is maintainable when such complaint is verified by the complainant and the process is issued by the Magistrate after due verification. It was also held in this case that it was not proved that no prejudice has been caused to the accused for not signing a complaint and the statement made on oath and signed by the complainant had duly safeguarded the interest of the accused. In this regard, Hon'ble the Supreme Court gave much emphasis on the language of Section 142(b) of the Act of 1881 which states that the complaint must necessarily be in writing and the complaint can be presented by the payee or the holder in due course of the cheque and it need not necessarily be signed by the complainant. Para 19 of the judment is important in this respect.
(2) M.M.T.C. Ltd. & Anr. v. Medchl Chemicals & Pharma (P) Ltd. & Anr., (2002) 1 SCC 234 : 2009 (1) NIJ 76 (SC)[NOC]
In this case the question for decision was whether a complaint filed in the name and on behalf of the company by its employee without necessary authorisation is maintainable. After analyzing the relevant provisio
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