Proper authorization and knowledge of the transaction are essential for filing a complaint on behalf of a company. The trial should determine issues related to the competence of the complainant and the nature of the transaction.

JUDGMENT :

CRM(M) No. 487/2022

1. The respondent filed a complaint under section 138 Negotiable Instruments Act (hereinafter to be referred as “the NI Act”) against the petitioner by asserting that it is a partnership firm dealing with finance, loan, auction group and committee business etc. It is averred in the complaint that the petitioner was having a business relationship with the respondent, as such, he approached the respondent for financial support and the respondent gave him some amount. In order to discharge his part liability, the petitioner issued a cheque bearing No. 073991 dated 29.01.2022 for an amount of Rs. 20.00 lacs in favour of respondent but the same was dishonored vide memo dated 31.01.2022 for “Funds Insufficient”.

2. The respondent through its counsel served a legal notice on 18.02.2022 through registered post calling upon the petitioner to pay the amount of dishonored cheque within a period of 15 days from the date of receipt of notice. The said notice was received by the petitioner on 24.02.2022 but he did not pay the amount of the dishonored cheque within the period of 15 days. Thereafter, the respondent filed a complaint under Section 138 NI Act, before the learned Chief Judicial Magistrate, Jammu which was assigned to the court of learned Special Railway Magistrate Jammu (hereinafter to be referred as “the trial court”) and the process was issued against the petitioner vide order dated 18.04.2022.

3. The petitioner has filed the present petition for quashing of the proceedings of the complaint, titled, “Ajay Trading Company vs Ajay Gupta” pending before the learned trial court on the following grounds:

(i) that the complainant has not pleaded the nature of transaction for which the cheque in question was issued and in fact, there was no transaction between the parties and there is no legally enforceable debt.

(ii) that the complaint has been filed without any authority as no partnership deed has been annexed with the complaint.

(iii) that the respondent-firm deals with the business of finance, loan, auction group and committee business etc. and for conducting such type of business, a mandatory permission under the Money Lenders and Accredited Loan Providers Act is required and until and unless such a license is issued, no one can conduct this business.

4. Mr. Mohd. Aamir Awan, learned counsel for the petitioner has vehemently argued that in terms of section 5 of the Money Lenders and Accredited Loan Providers Act, a business of money lending cannot be commenced without obtaining registration under the said Act and the respondent has nowhere demonstrated that it has a requisite license under the Act to commence/continue the said business, therefore, the complaint is not maintainable. He has further argued that neither the partnership deed nor the authorization has been placed on record by the respondent, thereby authorizing Sh. Ajay Gupta, who claims to be the partner of respondent partnership firm, to file the impugned complaint. He has placed reliance upon the judgment of the Hon’ble Supreme Court of India in “A. C. Narayanan v State of Maharashtra and another”, (2014) 11 SCC 790, “Shop named Kaloji Talusappa Ganga Vathi v Khyanagouda and others”, 1970 AIR SC 1420, the judgment of the Andhra Pradesh High Court in “Krishna Raju Finances vs Abida Sultana and others”, 2004(1) Andh LD (Criminal) 546, and the judgment of the Bombay High Court in “Anil Baburao Kataria vs Purshottam Prabhakar Kawane”, 2010(1) AIR Bom. R 434.

5. Per contra, Mr. Jasbir Singh Jasrotia, learned counsel for the respondent has vehemently argued that the respondent-partnership firm is registered with the Ministry of Micro, Small and Medium Enterprises, which is substantiated by the Udhayam Registration Certificate issued in favour of the respondent. He has further argued that the disputed questions of facts have been raised in the present petition, which cannot be adjudicated upon, until and unless the trial is conducted. He has