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Supreme Court
Honble K.T. THOMAS & S.N. VARIAVA, JJ.
M/s. M.M.T.C. Ltd. & Anr. - Appellant
Versus
M/s. Medchl Chemicals & Pharma P. Ltd. & Anr. - Respondents
Criminal Appeal Nos. 1173-74 of 2001
Decided On : November 19, 2001
It is held that when the complainant is a body corporate it is the de jure complainant, and it must necessarily associate a human being as de facto complaint to represent the former in court proceedings. It has further been held that no Magistrate shall insist that the particular person, whose statement was taken on oath at the first instance, alone can continue to represent the company till the end of the proceedings. It has been held that there may be occasions when different persons can represent the company. It has been held that it is open to the de jure complainant company to seek permission of the court for sending any other person to represent the company in the court. Thus, even presuming, that initially there was no authority, still the Company can, at any stage, rectify that defect. At a subsequent stage the Company can send a person who is competent to represent the company. The complaints could thus not have been quashed on this ground. (Para 12)
In the case of Maruti Udyog Ltd. vs. Narendra (1999(1) SCC 113), this Court has held that, by virtue of Section 139 of the Negotiable Instruments Act the Court has to draw a presumption that the holder of the cheque received the cheque for discharge of a debt or liability until the contrary is proved. This Court has held that at the initial stage of the proceedings the High Court was not justified in entertaining and accepting a plea that there was no debt or liability and thereby quashing the complaint. (Para 15)
It is held that the presumption under Section 139 is attracted in such a case also, The authority shows that even when the cheque is dishonoured by reason of stop payment instructions by virtue of Section 139 the Court has to presume that the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability. Of course this is a rebuttable presumption. The accused can thus show that the ``stop payment instructions were not issued because of insufficiency or paucity of funds. If the accused shows that in his account there was sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encasement at the drawer bank and that the stop payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encasement, then offence under Section 138 would not be made out. The important thing is that the burden of so proving would be on the accused. Thus a Court cannot quash a complaint on this ground. (Para 19)
(2). Heard parties.
(3). These Appeals are against a judgment dated 18.12.1998. By this common judgment two complaints, filed by the appellants, under Section 138 of the Negotiable Instruments Act have been quashed
(4). The appellant is a Government of India Company, incorporated under the Companies Act. The appellant has a Regional Office at Chennai. The 1st respondent is also a Company. The 2nd and 3rd respondents were/are the Directors of the 1st respondent Company. It is stated that 2nd respondent has now died.
(5). The appellant and the 1st respondent entered into a Memorandum of Understanding dated 1.06.1994. This Memorandum of Understanding was slightly altered on 19.09.1994. Pursuant to the Memorandum of Understanding two cheques, one dated 31.10.1994 in a sum of Rs.20,26,995/- and another dated 10.11.1994 in a sum of Rs.22,10,156/-, were issued by the 1st respondent in favour of the appellant. Both the cheques when presented for payment were returned with the endorsement payment stopped by drawer. Two notices were served by the appellant on the 1st respondent. As the amounts under the cheques were not paid the appellants lodged two complaints through one Lakshman Goel, the Manager of the Regional Office of the appellant.
(6). Respondents filed two petitions for quashing of the complaints. By the impugned order both the complaints have been quashed.
(7). At this stage it must be mentioned that respondents had also issued, to the appellants, four other cheques. Those cheques were also dishonoured when presented for payment. Four other complaints, under Section 138 of the Negotiable Instruments Act, had also been filed by the appellants. Those four complaints had also been lodged by the same Shri Lakshman Goel. In those four cases the respondents filed separate applications for discharge. Those discharge applications were on identical grounds as urged by the respondents in the two petitions for quashing the complaints. The Magistrate accepted the contention and discharged the respondents. The High Court allowed the Revision filed by the appellants and set aside the Order of discharge. The High Court held, as between the same parties, that the Magistrate had erred in holding that the complaints filed by Lakshman Goel were not maintainable. The High Court held that, at this stage, it was not possible to accept defence that complainant/appellants were not entitled to present the cheques as respondents had expected the goods. The High Court restored the four complaints and directed the Magistrate to proceed with the trial in accordance with law. The respondents filed SLPs before this Court which were summarily dismissed.
(8). In this case the respondents have taken identical contentions in their petitions to quash the complaints viz. that the complaints filed by Mr. Lakshman Goel were not maintainable and that the cheques were not given for any debt or liability. 1 It was pointed out to the learned Judge that, between the same parties and on identical facts, it had already been held that as case for discharge was made out. Yet the learned Judge chose to ignore those findings and proceeded to hold to the contrary.
(9). In the impugned judgment it has been held that the complaints filed by Mr. Lakshman Goel were not maintainable. It was noticed that in those two complaints, at a subsequent stage, one Mr.Sampath Kumar, the Deputy General Manager of the appellant was allowed to represent the appellants. The High Court held that it is only an Executive Director of the Company who has the authority to institute legal proceedings. It is held that the complaint could only be filed by a person who is in charge of or was responsible to the Company. It is held that authorisation must be on the date when the complaint is filed and a subsequent authorisation does not validate the complaint. It is held that the absence of a complaint by a duly delegated authority is not a mere defect or irregularity which could b
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