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2013 Supreme(Raj) 1837

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

For the Petitioners:Mahesh Bora, Senior Advocate with Nishant Bora and M.K. Garg, Advocates.
For the Non-petitioner:N.M. Lodha, Senior Advocate with Dr. Sachin Acharya and Mukesh Maheshwari, Advocates.

At the stage of cognizance under Section 138 of the Negotiable Instruments Act, 1881, the Court should focus on the basic requirements of the Act and avoid conducting a mini trial or fact-finding inquiry.

Headnote:

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.

JUDGMENT

1. - All these thirteen matters relate to different cases of Section 138, Negotiable Instruments Act, 1881 (for short "the Act of 1881") against the accused-non-petitioners. Accused-non-petitioners had filed criminal revisions before the learned Additional Sessions Judge No. 1, Udaipur and the Revisional Court vide order dated 4.9.2012 had quashed the order dated 3.4.2012 passed by Judicial Magistrate No. 1, Udaipur in all the thirteen matters, whereby cognizance was taken by the Trial Court against non-petitioners under Section 138 of the Act of 1881. Aggrieved by the order dated 4.9.2012 passed by Revisional Court in these cases, these criminal revisions have now been filed by the complainant.

2. I have heard learned counsel for both the parties. In the impugned order, the learned Additional Sessions Judge has reached to a conclusion that there is no evidence available on record which shows that Mahaveer Singh Kothari has authorised to act on behalf of the company and oral evidence in this regard should not be acceptable and so the learned Additional Sessions Judge had concluded that the above person (Mahaveer Singh Kothari) had no locus standi to file a complaint and hence cognizance could not have been taken looking to the provisions of Section 142(a) of the Act of 1881. The learned Sessions Judge had observed in the impugned order that the notice which was given to the accused was given by Mahaveer Singh Kothari on behalf of the complainant-company as its Director duly authorised by the resolution passed by the company while actually he was never authorised by the company to act like that.

3. Per contra, the petitioner-complainant has argued that a complaint under Section 138 of the Act of 1881 can be filed 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 of 1881 and the Court was supposed not to conduct the mini trial so as to appreciate the evidence and find out that if the person is authorised to file a complaint under Section 138 of the Act of 1881 or not. It has also been argued on behalf of the complainant-petitioner that the premises taken by the Sessions Court is misconceived because the complainant was filed by the Director of the Company.

4. It has also been argued by the petitioner-complainant that the Revisional Court has wrongly interpreted the following rulings of the Hon'ble Supreme Court :Milind v. Kalim, 2011 (1) NIJ 353 (SC) : AIR 2011 SC 1588 .

5. On the other hand, the complainant-petitioner has taken support from the following rulings in this matter :

(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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