Saturday, 17 September 2016

Whether complaint for dishonour of cheque is maintainable by officer of company if he is not specifically authorized in that behalf?


Reference was also made to M/s. Hari Shree Enterprises V/ s. M/s. Vikas Housing Ltd. & Ors. (2009 (4) ALL MR 247) wherein it was held that unless a power to institute a suit is specifically conferred on particular director, he has no authority to institute a suit on behalf of the company. It was further held therein that it was essential requirement of this provision that the company which is a juristic person must itself decide to sue and once that is done, it would authorise one of its directors who is the agent of a company or its principal officers, the secretary of the company or the managing director to file the suit. The suing in each case is a separate act. The company acts only through its meetings. The Board of Directors in the day to day management of the company must decide and resolve to sue or not to sue.
12. In the light of the law laid down by this Court, I need not refer to the case of Geekay Exim (India) Ltd. & Ors. V/s. State of Gujarat and Anr. MANU/GJ/0023/1997 : (1998 Cri.L.J. 700) which was followed by this Court in the case of M/s. Credential Finance Ltd. V/s. State of Maharashtra & Ors. (MANU/MH/0359/1999 : 1999 (1) ALL MR 211) or for that matter the case of Hyderabad Lamps V/s Asiatic Oxygen (2000 DCR 615).
13. The complainant was the payee in this case and was juristic person. It had passed no resolution in favour of the said Shri Gomes either to file the complaint or to depose in favour of the complainant. The case being criminal in nature it was for the said Shri Gomes to prove that he had authority from the company either to file the complaint or to depose in support of the complainant. The accused has a profound right to remain silent in a criminal trial and that fundamental principle need be followed even in cases under Section 138 of the Negotiable Instruments Act. The accused had clearly suggested to the complainant that he had no right to file the complaint. At least at that stage the said Shri Viegas ought to have made an effort to produce a resolution, if there was one, or get the acts done by him ratified by a resolution of the company. That he accepted two payments made by the accused on behalf of the company would not cure the fundamental defect of there being no resolution authorising him to file a complaint or depose in support of the complaint. In the absence of any resolution by the complainant - company in favour of Shri Viegas either to file a complaint and/or depose on behalf of the complainant, the accused could not have been convicted. Shri Viegas who claimed that he was the authorised representative was expected to produce such authority and the Court was not expected to believe him, in the absence of such authorisation, even if the accused had not contested his statement. In my view, the acquittal of the accused cannot be faulted. This is not a fit case to grant leave to appeal.
IN THE HIGH COURT OF BOMBAY AT GOA
Criminal Misc. Application No. 241 of 2010 in stamp Number Main No. 1828 of 2010
Decided On: 25.11.2010
Appellants: Candy Spirit Pvt. Ltd.
Vs.
Respondent: Reeves Mia
Hon'ble Judges/Coram:
N.A. Britto, J.

1. The complainant seeks leave to appeal against acquittal of the accused under Section 138 of the Negotiable Instruments Act, 1881. The complainant is a private limited Company. The complaint was filed for dishonour of five postdated cheques. The cheques deposited by the complainant with Central Bank of India were returned dishonoured and a notice dated 10/10/2008 when sent to the accused was not complied with.
2. The complaint was signed by one Jose Francisco Gomes as authorised representative of the complainant but what was placed on record at the time of filing the complaint was a letter of authority dated 27/07/2007 purported to be signed by the Director of the complainant authorising the said Jose Francisco Gomes to give the statement in a criminal case filed against Shiraz Shaikh.
3. The accused came to be acquitted by judgment dated 16/04/2010 by the learned JMFC by stating that the complainant had not placed on record any authority letter authorising the said Jose Francisco Gomes to file the complaint as the authority letter produced on record was given to Jose Francisco Gomes to give the statement against one Shiraz Shaikh and not against the accused Reeves Mia. The learned JMFC, therefore, proceeded to dismiss the complaint and acquit the accused under Section 138 of the Negotiable Instruments Act, 1881.
4. Shri C.A. Coutinho, the learned Counsel appearing on behalf of the complainant submits that the said Jose Francisco Gomes had stated in para 2 of the affidavit in evidence that he was the authorised representative of the complainant company and working as liaison Officer for the company, a fact which was not contested by the accused. Learned Counsel then points out that the accused had paid a sum of `20,000/-on 26/03/2010 and `5,000/-on 12/04/2010 in the hands of the said Shri Gomes and, therefore, the accused cannot now say that the said Gomes had no authority to represent the complainant. Shri Coutinho has placed reliance on several authorities.
5. On the other hand, Shri Shirodkar, the learned Counsel on behalf of the accused submits that the accused, in the cross-examination of the said Shri Gomes, had suggested to him that he had no right to file a complaint against the accused and inspite of that the accused did not produce the resolution in his favour passed by the complainant either to file a complaint or to depose on behalf of the complainant. Learned Counsel next submits that there is also no averment in the complaint to say that the said Shri Viegas was authorised by the complainant to file the complaint. Therefore, learned Counsel contends, the accused has been rightly acquitted by the learned trial Court.
6. I am not impressed with the submissions made on behalf of the complainant. Not that the said Shri Gomes was not aware that he required an authority from the complainant to represent the complainant. He was fully aware and did file one. Admittedly, the subject cheques were drawn in favour of the complainant and, therefore, the complainant was the payee of the cheques. Section 142 requires the complaint to be filed in the name of the payee.
7. The Apex Court in National Small Industries Corporation Limited V/s. State (NCT of Delhi) & Ors. (2009 (1) SCC 407) has held in the light of Section 142 of the Act that it is the payee alone who can be the complainant when the cheque has not been endorsed by the payee in favour of anyone. The Court further observed that:
...Where the complainant is a company, who will represent the company and how the company will be represented in such proceedings, is not governed by the Code but by the relevant law relating to the companies. A company is a de jure complainant and its employee or other representative, representing it in Criminal proceedings, becomes de facto complainant. Thus in every complaint, where the complainant is an incorporeal body, there is a complainant -de Juri and a complainant - de facto...
The Court further observed :
When in a complaint in regard to dishonour of a cheque issued in favour of a company or corporation, for the purpose of Section 142 of the Negotiable Instruments Act, the company will be the complainant and for purposes of Section 200, its employee who represents the company or corporation will be de facto complainant. In such a complaint, de jure complainant namely company or the corporation will remain the same but de facto complainant (employee) representing such de jure complainant can change from time to time.
8. In M/s. MMTC Ltd. & Anr. V/s. M/s. Medchi Chemicals & Pharma (P) Ltd. (AIR 2002 SC 182) the Apex Court noted that the fact that the complaint was lodged by a Manager or Deputy General Manager who had not been authorised by the Board of Directors to sign and file complaint on behalf of the company was a curable defect and was not a ground for quashing the complaint. In other words, the Apex Court has accepted that a complaint to be filed on behalf of a company have to be authorised by the Board of Directors. This Court has consistently taken the view that an incorporated company is a separate juristic person distinct from its directors or shareholders. It acts through the resolution passed by its Board of Directors. A person who claims to represent another is expected to produce an authority or power which entitles him to so appear. A person can appear and depose on behalf of the company only in case he was authorised by resolution of Board of Directors or by Article of Association of the company (see Chico Ursula D'Souza V/s Goa Plast Pvt. Ltd. [2008 (2) Bom.C.R.(Cri.) 776]).
9. In the case of Ashok B. Pagui (2007 (4) Bom.C.R. 465) after referring to other cases, it was held that a director as an individual Director has no power to act on behalf of the company. He is only one of the body of the directors called Board of Directors and he alone he has no power except such may be delegated to him by the Board of Directors or given to him by Article of Association of the company.
10. In the case of Ms/. Fomento Resorts and Hotels Ltd. V/s. Dr. Amilcar Cunha Souza (Writ Petition No.48/2009 decided on 24/06/2010) reference was made to Swadharma Swarajya Sangh V/s. Indian Commerce and Industries Co. Pvt. Ltd. (1999 98 Company Cases 151) wherein it was held that a suit filed by a company without a resolution of a Board of Directors authorising a particular director to file a suit was not maintainable as the same was not filed by a person authorised under Order 29, Rule 1, CPC.
11. Reference was also made to M/s. Hari Shree Enterprises V/ s. M/s. Vikas Housing Ltd. & Ors. (2009 (4) ALL MR 247) wherein it was held that unless a power to institute a suit is specifically conferred on particular director, he has no authority to institute a suit on behalf of the company. It was further held therein that it was essential requirement of this provision that the company which is a juristic person must itself decide to sue and once that is done, it would authorise one of its directors who is the agent of a company or its principal officers, the secretary of the company or the managing director to file the suit. The suing in each case is a separate act. The company acts only through its meetings. The Board of Directors in the day to day management of the company must decide and resolve to sue or not to sue.
12. In the light of the law laid down by this Court, I need not refer to the case of Geekay Exim (India) Ltd. & Ors. V/s. State of Gujarat and Anr. MANU/GJ/0023/1997 : (1998 Cri.L.J. 700) which was followed by this Court in the case of M/s. Credential Finance Ltd. V/s. State of Maharashtra & Ors. (MANU/MH/0359/1999 : 1999 (1) ALL MR 211) or for that matter the case of Hyderabad Lamps V/s Asiatic Oxygen (2000 DCR 615).
13. The complainant was the payee in this case and was juristic person. It had passed no resolution in favour of the said Shri Gomes either to file the complaint or to depose in favour of the complainant. The case being criminal in nature it was for the said Shri Gomes to prove that he had authority from the company either to file the complaint or to depose in support of the complainant. The accused has a profound right to remain silent in a criminal trial and that fundamental principle need be followed even in cases under Section 138 of the Negotiable Instruments Act. The accused had clearly suggested to the complainant that he had no right to file the complaint. At least at that stage the said Shri Viegas ought to have made an effort to produce a resolution, if there was one, or get the acts done by him ratified by a resolution of the company. That he accepted two payments made by the accused on behalf of the company would not cure the fundamental defect of there being no resolution authorising him to file a complaint or depose in support of the complaint. In the absence of any resolution by the complainant - company in favour of Shri Viegas either to file a complaint and/or depose on behalf of the complainant, the accused could not have been convicted. Shri Viegas who claimed that he was the authorised representative was expected to produce such authority and the Court was not expected to believe him, in the absence of such authorisation, even if the accused had not contested his statement. In my view, the acquittal of the accused cannot be faulted. This is not a fit case to grant leave to appeal. Application dismissed.

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