1. Appeals challenging acquittal under Section 138, NI Act — Issue of authority of witness to file complaint and territorial jurisdiction. (Para 2 , 3 , 4 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 31 )
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2022 Supreme(Online)(Bom) 3591
HIGH COURT OF BOMBAY
HON'BLE SHRI JUSTICE BHARAT PANDURANG DESHPANDE
Quepem Urban Co-op. Credit Society Ltd. – Appellant
Versus
Datta Shambu Naik – Respondent
CRIA/21/2018
Advocates:
For the Appellants/Petitioners: Abhay Nachinokar, Siddhant Kamat Dhakankar, H. Vaze
For the Respondents: Ashwin D. Bhobe, Annelise Fernandes, Chirag Angle, S. Shaikh, Gaurish Nagvenkar
For the Appellants/Petitioners: Abhay Nachinokar, Siddhant Kamat Dhakankar, H. Vaze
For the Respondents: Ashwin D. Bhobe, Annelise Fernandes, Chirag Angle, S. Shaikh, Gaurish Nagvenkar
The word "proceed" in a resolution authorizing a representative to handle legal matters includes the power to initiate new proceedings. Furthermore, NI Act cases beyond the summoning stage should be transferred to the jurisdictional court rather than dismissed for lack of territorial jurisdiction.
Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Authority to file complaint - Interpretation of resolution - Whether the word "proceed" used in a board resolution to authorize a representative to "represent and proceed all the cases... including criminal cases" includes the power to initiate fresh proceedings - The word "proceed" according to dictionary meaning means "to begin a course of action" or "to initiate and conduct legal action" - A resolution authorizing a person to proceed for and on behalf of a society specifically includes the power to launch, initiate, and file complaints against third parties (Paras 38-51).
(B) Negotiable Instruments Act, 1881 - Section 138 - Territorial Jurisdiction - Proper course of action when jurisdictional error is found - In cases where proceedings have progressed to the stage of recording evidence as envisaged in Section 145(2) of the Act, the court should direct the transfer of the case to the court possessing territorial jurisdiction rather than dismissing the complaint (Paras 57-63).
Facts of the case:
Two complaints were filed by a society under Section 138 of the Negotiable Instruments Act regarding dishonored cheques. Both the trial court had initially convicted the accused. However, the first appellate court set aside the convictions, holding that the representative of the society lacked the authority to initiate the proceedings because the governing resolution only empowered them to "proceed" with cases (interpreted as continuing pending matters) and, in one instance, concluded that the trial court lacked territorial jurisdiction.
Findings of Court:
The court found that the first appellate court erred in the narrow interpretation of the word "proceed," which in a legal and dictionary sense includes the power to start a course of action. Regarding the jurisdictional issue, the court held that since the case had already progressed beyond the summoning stage, the appropriate remedy was to transfer the matter to the jurisdictional court rather than dismissing the case entirely.
Issues: (i) Whether a representative authorized by a resolution to "proceed" all cases had the legal authority to institute and file a criminal complaint on behalf of the society. (ii) Whether the correct legal procedure for a case lacking territorial jurisdiction, which has already reached the evidence stage, is dismissal or transfer.
Ratio Decidendi: The term "proceed" must be interpreted by its dictionary meaning as "beginning a course of action," thereby granting the authority to initiate new legal proceedings. Furthermore, based on guidelines from the Apex Court, complaints under Section 138 that have reached the stage of evidence under Section 145(2) should be deemed transferred to the court of competent jurisdiction to avoid undue hardship and oppressive litigation.
Result: Criminal Appeal No. 11 of 2015 allowed and judgment of conviction restored. Criminal Appeal No. 21 of 2018 partly allowed; judgment quashed and matter remanded for transfer to the jurisdictional court.
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Table of Contents
2. Dispute over whether resolution authorised initiation of proceedings and whether place of notice issuance confers territorial jurisdiction for complaint under Section 138. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 )
3. The word 'proceed' in resolution means 'begin a course of action' and includes authority to initiate legal proceedings including filing complaints. (Para 38 , 39 , 40 , 41 , 42 , 49 , 50 , 51 , 54 )
4. The word 'proceed' in a board resolution authorises initiation of proceedings; territorial jurisdiction under Section 138 is determined by place of dishonour. (Para 49 , 50 , 51 , 62 )
5. Appeal allowed, conviction restored in one case; in other, case remanded to jurisdictional court for trial on evidence within three months. (Para 64 , 65 )
6. Does a resolution authorising a person to 'proceed all the cases' confer power to file criminal complaints?
Yes, the word 'proceed' means 'to begin a course of action' and includes the power to initiate and file complaints, not merely continue pending ones. (Para 38 , 39 , 40 , 41 , 42 , 49 , 50 , 51 , 54 )
7. What is the proper course when a complaint under Section 138, NI Act is filed in a court without territorial jurisdiction?
The matter should be transferred to the jurisdictional court following directions in Dashrath Rupsingh Rathod v. State of Maharashtra, not dismissed outright. (Para 56 , 57 , 58 , 59 , 60 , 61 , 62 , 63 , 64 )
8. Can a Power of Attorney be ignored if the underlying board resolution already authorises the person to initiate proceedings?
Yes, if the resolution specifically gives power to initiate proceedings, the Power of Attorney may be ignored as the resolution itself is sufficient authority. (Para 28 , 29 , 30 , 31 , 32 )
9. Is oral evidence admissible to interpret the meaning of a clear board resolution?
No, a written resolution must be interpreted by its true meaning; oral evidence cannot be used to contradict or reinterpret its clear terms. (Para 53 )
JUDGMENT:
In both these appeals, common questions of facts and law are raised and therefore taken up for final disposal together. The learned counsel appearing for the parties agreed that both these matters could be disposed of by a common judgment.
2. Criminal Appeal No.11 of 2015 is challenging the judgment dated 21/10/2013 passed in Criminal Appeal No.48 of 2012 by the learned Additional Sessions Judge-I, South Goa Margao whereby the judgment of conviction dated 27/03/2012 passed by the learned J.M.F.C.,Quepem in Criminal Case No.103/NI/2010/B was quashed and set aside and the respondent/accused was acquitted of the offence punishable under Section 138 of the Negotiable Instruments Act,1881.
3. Criminal Appeal No.21 of 2018 is challenging the judgment dated 17/06/2017 in Criminal Appeal No.51 of 2013 passed by the learned Additional Sessions Judge, South Goa, Margao thereby allowing the said appeal and accordingly quashing and setting aside the judgment of conviction passed by the learned Judicial Magistrate First Class, Quepem in Criminal Case No.38/NI/2009/B. The respondent/accused was accordingly acquitted for the offences punishable under Section 138 of the Negotiable Instruments Act.
4. In both, the matters appellant is the same i.e. The Quepem Urban Credit Society whereas the respondents are different. However, since common grounds are raised, both these matters are taken together for disposal.
5. Heard Mr. Abhay Nachinokar, learned Counsel for the appellant, Mr. A.D. Bhobe, learned Counsel for respondent No.1 and Mr. Gaurish Nagvenkar, Additional Public Prosecutor for respondent No.2.
6. With the assistance of the learned Counsel appearing for the respective parties, I have perused the entire record and particularly the judgments and reasoning of the learned Magistrate and that of the First Appellate Court.
7. Shri Abhay Nachinokar, appearing for the appellants in both the matters submitted that the learned Additional Sessions Judge while acquitting both the accused persons erred in accepting the contentions raised in the grounds and more particularly, disbelieving the authority given to the witness to file the complaint. He, therefore, submitted that the question in both the appeals is whether a witness had authority to file complaint.
8. Learned counsel Shri Nachinokar then submitted that in Criminal Appeal No.21 of 2018, apart from the above question, there is additional ground wherein the learned Additional Sessions Judge erred in holding that the learned Magistrate at Quepem had no territorial jurisdiction to entertain and decide the complaint.
9. While elaborating his arguments, learned counsel Shri Nachinokar pointed out the resolution passed by the complainant in favour of PW1 and submitted that the word "proceed" means to start or initiate the proceedings and not to continue with the proceedings already filed, as tried to be interpreted by the learned Additional Sessions Judge. In this respect, he placed reliance on the dictionary meaning of the word "proceed" and claimed that the actual meaning of the word "proceed" is to institute and conduct legal action or begin the course of action. He, therefore, submitted that the resolution gives power to PW1 to begin the proceedings thereby instituting complaint and thereafter adducing the evidence to that effect on behalf of the complainant.
10. Learned counsel Shri Nachinokar submitted that leaving aside the power of attorney produced on record, the resolution itself is sufficient enough to give power to the complainant/PW1 to start the proceedings. He, therefore, invited attention to Section 142 of the Negotiable Instruments Act as far as filing the complaint. He submitted that there are no two views possible in order to interpret the word "proceed" as found in the resolution and, therefore, observations of the learned Additional Sessions Judge contrary to the dictionary meaning have to be discarded and set aside.
11. Learned counsel Shri Nachinokar then submitte
