2021 Supreme(SC) 672

SUPREME COURT OF INDIA
SANJAY KISHAN KAUL, M.M. SUNDRESH, JJ.
Bhupesh Rathod – Appellant
Versus
Dayashankar Prasad Chaurasia and Another – Respondents
Criminal Appeal No. 1105 of 2021
Decided On : 10-11-2021

IMPORTANT POINTS
(1) Dishonour of cheque – Offence against company – No Magistrate could insist that particular person whose statement was taken on oath alone can continue to represent Company till end of proceedings.
(2) Dishonour of cheque – Offence against company – It would be too technical a view to take to defeat complaint merely because body of complaint does not elaborate upon authorisation.

Headnote:

Negotiable Instruments Act, 1881 – Sections 138 and 142 read with Sections 118 and 139 – Criminal Procedure Code, 1973 – Section 378 – Dishonour of cheque – Offence against company – Appeal against acquittal – Respondent not having disputed his signatures on cheques, it was for respondent to show in what circumstances cheques had been issued – Unless contrary is proved, it shall be presumed that holder of cheque received cheque of nature referred to in Section 138 for discharge, in whole or in part, of any debt or other liability – Respondent has not set up a case that nature of transaction was of nature which fell beyond scope of Section 138 – No Magistrate could insist that particular person whose statement was taken on oath alone can continue to represent Company till end of proceedings – Managing Director has filed complaint on behalf of Company – There could be a format where Company’s name is described first, suing through Managing Director but there cannot be a fundamental defect merely because name of Managing Director is stated first followed by post held in Company – Copy of Board Resolution was filed along with complaint – It would be too technical a view to take to defeat complaint merely because body of complaint does not elaborate upon authorisation – Artificial person being Company had to act through a person/official, which logically would include Chairman or Managing Director – Only existence of authorisation could be verified – Finding by Courts below as to lack of authorisation to depose, stands nullified – Body of complaint need not be required to contain anything more in view of what has been set out at inception coupled with copy of Board Resolution – There is no reason to otherwise annex a copy of Board Resolution if complaint was not being filed by appellant on behalf of Company – There was no plea of any fraud or misrepresentation – Complaint was properly instituted and respondent failed to disclose why he did not meet financial liability arising to a payee, who is a holder of a cheque in due course – Impugned orders set aside – In given scenario respondent should be sentenced with imprisonment for a term of one year and with fine twice amount of cheque, i.e., Rs.3,20,000/- – However, in view of passage of time, if respondent pays a further sum of Rs.1,60,000/- to appellant, then sentence would stand suspended – Needful be done by respondent within two (2) months from today – Appellant would also be entitled to costs. (Paras 17, 19, 22, 23, 25, 26, 27, 28 and 29)

Facts of the case:

Case made out in the complaint is that a sum of Rs.1,60,000/- was advanced to the respondent by Company and the cheques were issued to repay the loan. The respondent took an objection that complaint was filed in the personal capacity of appellant and not on behalf of the Company. While on the other hand it was contended by the appellant that the complaint was in the name of Company and in the cause title of the complaint he had described himself as the Managing Director. The Company was a registered company under Companies Act, 1956. The registration certificate, however, was not placed on record. On this aspect, it was the further submission of respondent that it is only in the aforesaid title description that complainant is described as the Managing Director of the Company in the body of the complaint it is not so mentioned. Trial court acquitted the respondent on 12.03.2009 based on a dual reasoning (a) there was no document except the promissory note signed by respondent to show that the loan was being granted; and (b) Board Resolution itself was not signed by the Board of Directors (it may be stated that this was really a true copy of the Board Resolution). Appellant preferred an appeal before the High Court. High Court by the impugned order dated 03.08.2015 dismissed appeal.

Findings of Court:

Description of the complainant with its full registered office address is given at the inception itself except that the Managing Director’s name appears first as acting on behalf of the Company. The affidavit and the cross-examination in respect of the same during trial supports the finding that the complaint had been filed by the Managing Director on behalf of the Company. Thus, the format itself cannot be said to be defective though it may not be perfect.

Result : Appeal allowed.