M/S TRL KROSAKI REFRACTORIES LTD versus M/S SMS ASIA PRIVATE LIMITED & ANR. on 22 February 2022

268

SUPREME COURT REPORTS

[2022] 2 S.C.R. 268

[2022] 2 S.C.R.

M/S TRL KROSAKI REFRACTORIES LTD.

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M/S SMS ASIA PRIVATE LIMITED & ANR.

(Criminal Appeal No. 270 of 2022)

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FEBRUARY 22, 2022

[N. V. RAMANA, CJI, A. S. BOPANNA ANDHIMA KOHLI, JJ.]

Code of Criminal Procedure, 1973: s.482 – Dishonour ofCcheque – Respondent issued certain cheques in favour of theappellant company which on presentation were dishonoured by thebank – On respondent’s failure to comply with the demand notices,appellant filed the complaint before the Magistrate u/ss.138 and142 of N.I. Act – Respondent filed petition u/s.482 before the HighDCourt for quashing of complaint, which was allowed – On appeal,held: s.142(1)(a) of N.I. Act states that the complaint ought to be inwriting and it should be filed by payee or the holder in due course– In the instant case, requirements were satisfied, firstly, complaintwas filed in the name of the company i.e. the payee, through theGeneral manager (Accounting) – Secondly, Managing Director ofEthe appellant had duly authorized General Manager (Accounting)to institute proceedings and represent the company – The Managingdirector was delegated by the Board of Directors all the powersnecessary for the management and operation of the company –Hence, the complaint u/s.138 NI Act was filed on the behalf of theFpayee company with due authorization – In respect of GeneralManager’s knowledge about the transaction or witness to thetransaction, transactions between the parties were based on theagreement in which witness on behalf of appellant was none otherthan General Manager – Further, the document for reconciliationof account was attested by the representatives of the parties andGappellant was represented by the General Manager – Moreover,when the cheques were dishonoured, it was the General Managerwho issued the notices on the behalf of the appellant – Hence, thesaid documents and affidavit filed in lieu of oral sworn statementsbefore Magistrate indicated that the appellant was represented byan authorized person who has knowledge about the transaction –H

Requirement of s.142 was satisfied – High Court was not justifiedin entertaining the petition u/s.482 – Negotiable Instruments Act,1881 – s.142.

Negotiable Instruments Act, 1881: s.142 – When a companyis the payee of the cheque based on which a complaint is filed unders.138 of N.I. Act, the complainant necessarily should be the Companywhich would be represented by an employee who is authorized – Allthat is necessary is to demonstrate before the Magistrate that thecomplaint filed is in the name of the “payee” and if the person whois prosecuting the complaint is different from the payee, theauthorisation therefor and that the contents of the complaint arewithin his knowledge – If at all, there is any serious dispute withregard to the person prosecuting the complaint not being authorizedor if it is to be demonstrated that the person who filed the complainthas no knowledge of the transaction and, as such that person couldnot have instituted and prosecuted the complaint, it would be openfor the accused to dispute the position and establish the same duringthe course of the trial – In such circumstances entertaining a petitionunder s.482 to quash the order taking cognizance by the Magistratewould be unjustified when the issue of proper authorisation andknowledge can only be an issue for trial.

Allowing the appeal, the Court

Conclusion

Allowing the appeal, the Court

HELD: 1. The Managing Director apart from himself beingthe key managerial personnel of the appellant company, has alsobeen delegated the power by the Board of Directors through thedocument dated 06.04.1998. Through the said document theManaging Director has been delegated, in general, all powersnecessary for the management and operation of the company andit has been specified among others, to exercise the power relatingto important issues affecting the company’s land and property.Through the said document, the Managing Director is alsoempowered to delegate where necessary and to the extentrequired, any of the powers delegated to him, to his subordinateofficers. The above noted documents would disclose that thecomplaint under Section 138 NI Act was filed on behalf of the“payee” company with due authorisation. [Para 11][280-B-E]

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A2. The next aspect on which the High Court has interferedis on accepting the contention that there is no averment in thecomplaint as to whether the General Manager (Accounting) hadany knowledge about the transaction or he was a witness to thetransaction. On the said aspect it is noted that the transactionbetween the parties is based on the agreement dated 18.07.2014.BThe said document depicts, below the signature of the executivesrepresenting the appellant and the respondent company, a witnesseach from either side have appended their signatures. The witnesson behalf of the appellant company is none other than Mr.Subhasis Kumar Das who was at that point in time, designated asCGeneral Manager (Commercial). Further, the document forreconciliation of account spanning the period from 01.04.2011 to30.09.2014, as carried out on 28.10.2014, depicts that the samewas attested by the representatives of both the companies. Theappellant company is represented by the General Manager(Accounting). That apart, when the cheques were dishonoured,Dit was the General Manager (Accounting) who had issued thenotices on behalf of the appellant company, to the respondentcompany. The said documents would indicate that the person whohad knowledge of the transaction and was witness to it, has beenauthorized and has instituted the complaint on behalf of theEcompany. [Para 12][280-E-H; 281-A]

3. A meaningful reading of the affidavit filed before SDJMwould indicate that the company having authorized the GeneralManager (Accounting) and the General Manager (Accounting)having personal knowledge had in fact been clearly averred. What Fcan be treated as an explicit averment, cannot be put in astraitjacket but will have to be gathered from the circumstanceand the manner in which it has been averred and conveyed, basedon the facts of each case. The manner in which a complaint isdrafted may vary from case to case and would also depend on theskills of the person drafting the same which by itself, cannot defeatGa substantive right. However, what is necessary to be taken noteof is as to whether the contents as available in the pleading wouldconvey the meaning to the effect that the person who has filedthe complaint, is stated to be authorized and claims to haveknowledge of the same. In addition, the supporting documentsH

which were available on the record by themselves demonstratethe fact that an authorized person, being a witness to thetransaction and having knowledge of the case had instituted thecomplaint on behalf of the “payee” company and therefore, therequirement of Section 142 of N.I. Act was satisfied. [Para 14][282-A-D]

4. When a company is the payee of the cheque based onwhich a complaint is filed under Section 138 of N.I. Act, thecomplainant necessarily should be the Company which would berepresented by an employee who is authorized. Prima facie, insuch a situation the indication in the complaint and the swornstatement (either orally or by affidavit) to the effect that thecomplainant (Company) is represented by an authorized personwho has knowledge, would be sufficient. The employment of theterms “specific assertion as to the knowledge of the power ofattorney holder” and such assertion about knowledge should be“said explicitly” as stated in A.C. Narayanan cannot beunderstood to mean that the assertion should be in any particularmanner, much less only in the manner understood by the accusedin the case. All that is necessary is to demonstrate before theMagistrate that the complaint filed is in the name of the “payee”and if the person who is prosecuting the complaint is differentfrom the payee, the authorisation therefor and that the contentsof the complaint are within his knowledge. When, the complainant/payee is a company, an authorized employee can represent thecompany. Such averment and prima facie material is sufficient forthe Magistrate to take cognizance and issue process. If at all,there is any serious dispute with regard to the person prosecutingthe complaint not being authorized or if it is to be demonstratedthat the person who filed the complaint has no knowledge of thetransaction and, as such that person could not have institutedand prosecuted the complaint, it would be open for the accusedto dispute the position and establish the same during the courseof the trial. In such circumstances entertaining a petition underSection 482 to quash the order taking cognizance by theMagistrate would be unjustified when the issue of properauthorisation and knowledge can only be an issue for trial. [Para17][286-A-B]

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AA.C. Narayanan v. State of Maharashtra & Anr. (2014)11 SCC 790 : [2013] 11 SCR 80; National SmallIndustries Corporation Ltd. v. State (NCT of Delhi) andOrs. (2009) 1 SCC 407 : [2008] 16 SCR 83; SamratShipping Co. Pvt. Ltd. v. Dolly George (2002) 9 SCC455; Vinita S. Rao v. Essen Corporate Services (P) Ltd.B(2015) 1 SCC 527 – relied on.

M/s. M.M.T.C. Ltd. v. Medchi Chemicals and Pharma(P) Ltd. (2002) 1 SCC 234 : [2001] 5 Suppl. SCR 265;Vishwa Mitter v. O.P. Poddar (1983) 4 SCC 701 : [1984]1 SCR 176; Janaki Vashdeo Bhojwani & Anr. v.CIndusind Bank Ltd. & Ors. (2005) 2 SCC 217 : [2004]6 Suppl. SCR 681– referred to.

Case Law Reference

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.270 of 2022.

From the Judgment and Order dated 14.12.2017 of the High Courtof Orissa at Cuttack in CRLMC No.1210 of 2017.F

Ashok K. Parija, Sr. Adv., Gaurav Khanna, Arnav Behera, Ms.Sadhvi Swarup, Advs. for the Appellant.

Arunav Patnaik, Santosh Kumar - I, Advs. for the Respondents.The Judgment of the Court was delivered byGA. S. BOPANNA, J.

1. Leave granted.

2. The appellant is assailing the judgment dated 14.12.2017 passedby the High Court of Orissa at Cuttack in CRLMC No.1210 of 2017.Through the said judgment, the High Court while disposing of the petitionH

has quashed the order dated 05.11.2015 passed by the learned SDJM,Jharsuguda by which cognizance was taken and summons was issued inI.C.C. Case No.422 of 2015. The appellant who is the complainant inI.C.C. Case No.422 of 2015 is therefore before this Court, claiming tobe aggrieved by the said judgment.

3. The brief facts are that the respondent herein had issued sevencheques dated 13.03.2015, in all amounting to Rs.1,10,00,000/- (Rupeesone crore ten lakhs) in favour of the appellant company. On presentation,the said cheques were dishonoured by the Bank and returned with theendorsement, ‘account closed’. The appellant in that view issued noticesdated 14.04.2015 through registered post, acknowledgement due. Thoughthe notices were received on 16.04.2015 as per the postalacknowledgement, the respondent failed to comply with the demand orrespond to the same. In that view, the appellant filed the complaint beforethe learned Sub-Divisional Judicial Magistrate, (‘SDJM’ for short)Panposh, Uditnagar Rourkela under Section 138 and 142 of NegotiableInstruments Act, 1881 (for short ‘N.I. Act’). The said complaint wasregistered based on the affidavit filed on behalf of the complainant, inlieu of oral sworn statement. The learned SDJM on being satisfied thatthere is sufficient material and the complaint under Section 138 of N.I.Act against the accused is in accordance with law, took cognizance ofthe complaint and directed summons to the respondent-accused, videorder dated 05.11.2015.

4. The respondent herein however filed a petition in CRLMCNo.1210 of 2017 under Section 482 of the Criminal Procedure Code(for short ‘Cr.P.C.) before the High Court claiming to be aggrieved bythe order dated 05.11.2015. The respondent, in the said petition hadcontended that the complaint filed was by an incompetent person withoutthe requisite averments in the complaint, despite which the learned SDJMhad taken cognizance and issued summons. In that regard, it wascontended that Mr. Subhasis Kumar Das, General Manager (Accounting)who had filed the complaint representing the complainant company,neither had knowledge about the alleged transaction, nor had he witnessedthe same. In that light, the respondent had contended that the ordertaking cognizance and the summons issued to them, is liable to be quashed.The High Court, accepting the said contention and placing reliance onthe judgment of this Court in A.C. Narayanan vs. State of Maharashtra& Anr. (2014) 11 SCC 790 has held that there is no mention in the A

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Acomplaint or affidavit as to when and in what manner the company hadauthorized its General Manager (Accounting) to represent the companyto file the complaint. It is further held that there is no averment in thecomplaint as to whether the General Manager (Accounting) hadknowledge about the transaction or he was a witness to the transaction.It was also held, neither any resolution of the Board of Directors of theBcomplainant company nor any authorisation of the company in favour ofthe person representing it in the complaint was filed for perusal of theMagistrate. Only an authorisation letter issued by the Managing Directorof the complainant company in favour of the General Manager(Accounting) was produced and the said authorisation does not indicateCwhether the Board of Directors had authorised the Managing Directorto sub-delegate his powers to the General Manager (Accounting) to filethe complaint on behalf of the company.

5. Mr. Ashok K. Parija, learned senior counsel appearing on behalfof the appellant while assailing the judgment passed by the High Court,Dwould contend that the High Court has utterly misconstrued the principleenunciated in A.C. Narayanan (supra) to non-suit the appellant. It iscontended that in the said decision, while considering the nature of thecomplaint filed based on the power of attorney executed by one individualin favour of another individual to conduct the case, the requirement thereinhas been stated. Even in that context the High Court has not properlyEappreciated the facts involved in the instant case since the complaintwas as per the observations made in A.C. Narayanan (supra). It iscontended that the order passed by the learned SDJM dated 05.11.2015taking cognizance would indicate that the learned Magistrate havingperused the complaint and the entire record, was satisfied that there isFsufficient material for issuance of summons. In that background, the list ofdocuments and the documents are referred to. The agreement dated18.07.2014, entered into between the appellant and respondent woulddisclose that Mr. Subhasis Kumar Das, General Manager (Accounting)who had represented the company in the complaint, was a witness to the said agreement. He had also signed the reconciliation statement and hasGdespatched the notice to the respondent when the cheques weredishonoured. In that view, the company was represented by a competentperson who had knowledge of the transaction. The verifying affidavitenclosed with the complaint also specified that he had knowledge and thatthe complaint was based on the relevant documents. In addition, the saidHMr. Subhasis Kumar Das, General Manager (Accounting) in the affidavit filed as his sworn statement, had explicitly stated that he is the authorizedrepresentative of the complainant company and has filed the complaintagainst the accused persons. Learned senior counsel would also point outthat in addition to the fact that he was a Senior Managerial Officer of theappellant company, Mr. Subhasis Kumar Das was also authorized by theManaging Director on 23.05.2015, to initiate the legal proceedings. TheManaging Director on the other hand, was authorized by the Chairmanbased on the approval of the Board of Directors. In that view, it is contendedthat the complaint was filed in accordance with law and the learnedMagistrate having applied his mind, had taken cognizance which wasquashed by the High Court without appropriately applying its mind.

6. Mr. Santosh Kumar, learned counsel for the respondent wouldhowever, seek to sustain the judgment passed by the High Court. It iscontended that the High Court having noted the judgment in A.C.Narayanan (supra) and also the judgments of the Orissa High Courthad arrived at the conclusion that the complaint filed did not satisfy therequirement of Section 142 of N.I. Act as the complaint was not filed bya person who was authorized by the company. It is further contendedthat in A.C. Narayanan (supra) this Court has held that there should beexplicit averment to the effect that the person filing the complaint isauthorized by the complainant and has knowledge of the transaction inquestion so as to maintain the complaint. It is contended that since theHigh Court has arrived at its conclusion by relying on a decision renderedby this Court, such a decision would not call for interference in this appeal.

7. Having noted the sequence of events and the rival contentionsput forth by the learned counsel for the parties, the solitary issue forconsideration herein is as to whether the complaint filed by the appellantherein under Section 138 of N.I. Act is in accordance with therequirement under Section 142 of the N.I. Act. The relevant provisionreads as hereunder: - “142. Cognizance of offences.—[(1)] Notwithstanding anythingcontained in the Code of Criminal Procedure, 1973 (2 of 1974),—

(a) no court shall take cognizance of any offencepunishable under section 138 except upon a complaint,in writing, made by the payee or, as the case may be,the holder in due course of the cheque; (b)xxxxxxxxxx

(c) xxxxxxxxxx”

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A8. In that background, a perusal of the complaint (Annexure P-14) would disclose that the complainant named therein is M/s. TRLKrosaki Refractories Limited through its General Manager (Accounting)Subhasis Kumar Das. A perusal of the cheques (Annexures P-3 to P-9)which are the subject matter of the said complaint under Section 138 ofNI Act would disclose that the “payee” named in the said cheques is M/Bs. TRL Krosaki Refractories Limited. If that be the position, therequirement as contemplated under Section 142 (1) (a) of NI Act thatthe complaint ought to be in writing and that it should be filed by thepayee or the holder in due course, stands satisfied. The issue raised isthat the complaint filed by Mr. Subhasis Kumar Das, General ManagerC(Accounting) on behalf of the company is not competent for want ofauthorisation and that there is no averment with regard to his knowledgeabout the transaction. On this aspect, strong reliance is placed by thelearned counsel for the respondents on A.C. Narayanan (supra). Further,the judgment passed by the High Court is also entirely based on theguidelines laid down in the said decision.D

9. To place the matter in perspective, it would be necessary for usto take note of the circumstances under which the consideration arosein A.C. Narayanan (supra). In that regard, it is noticed that this Courtwhile considering the scope of Section 142 (1)(a) of N.I. Act in the caseof M/s. M.M.T.C. Ltd. vs. Medchi Chemicals and Pharma (P} Ltd.,E(2002) 1 SCC 234, had taken note of an earlier decision of this Court inVishwa Mitter vs. O.P. Poddar, (1983) 4 SCC 701 wherein it was heldthat anyone can set the criminal law in motion by filing a complaint offacts constituting an offence, before a Magistrate entitled to takecognizance. It was further held in Vishwa Mitter (supra) that if anyFspecial statute prescribes offences and makes any special provision fortaking cognizance of such offences under the statute, thenthe complaintrequesting the Magistrate to take cognizance of the offence must satisfythe eligibility criterion prescribed by such statute. In that circumstance,it was held that the only eligibility criteria prescribed by Section 142 ofN.I. Act is that the complainant must be by the payee or the holder inGdue course. However, in a subsequent decision in Janaki VashdeoBhojwani & Anr. vs. Indusind Bank Ltd. & Ors. (2005) 2 SCC 217,while considering the right of a power of attorney holder to act on behalfof the principal in a civil proceeding, the provision contained in Order IIIRule 1 and 2 of CPC was kept in view and it was held that if the powerof attorney holder has rendered some acts in pursuance of the power ofH

attorney, he may depose for the principal in respect of such acts, but hecannot depose for the principal for the acts done by the principal and notby him. Similarly, he cannot depose for the principal in respect of thematter of which only the principal is entitled to be cross-examined. Thesaid two decisions which were rendered by Division Benches were assumedto be in conflict with each other by another Division Bench while consideringA.C. Narayanan (supra) and therefore it desired clarification.

10. In that view, the matter in A.C. Narayanan (supra) wasreferred to a Bench of three Hon’ble Judges. The said Bench afterholding that the said two judgments of this Court are not in conflict witheach other has considered the scope and requirement of Section 142(1)(a) of N.I. Act and formulated the questions for consideration ascontained in para 21 of the judgment which read as hereunder: - “21. In terms of the reference order, the following questions haveto be decided by this Bench:

21.1. Whether a power-of-attorney holder can sign and file acomplaint petition on behalf of the complainant? /Whether theeligibility criteria prescribed by Section 142(a) of the NI Act wouldstand satisfied if the complaint petition itself is filed in the name ofthe payee or the holder in due course of the cheque?

21.2. Whether a power-of-attorney holder can be verified on oathunder Section 200 of the Code?

21.3. Whether specific averments as to the knowledge of thepower-of-attorney holder in the impugned transaction must beexplicitly asserted in the complaint?

21.4. If the power-of-attorney holder fails to assert explicitly hisknowledge in the complaint then can the power-of-attorney holderverify the complaint on oath on such presumption of knowledge?

21.5. Whether the proceedings contemplated under Section 200of the Code can be dispensed with in the light of Section 145 ofthe NI Act which was introduced by an amendment in the year2002?”

The consideration made in paras 29 to 30 would be relevant to benoted, which read as hereunder: - “29. From a conjoint reading of Sections 138, 142 and 145 of theNI Act as well as Section 200 of the Code, it is clear that it isopen to the Magistrate to issue process on the basis of thecontents of the complaint, documents in support thereof A

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and the affidavit submitted by the complainant in supportof the complaint. Once the complainant files an affidavit insupport of the complaint before issuance of the process underSection 200 of the Code, it is thereafter open to the Magistrate, ifhe thinks fit, to call upon the complainant to remain present and toexamine him as to the facts contained in the affidavit submittedby the complainant in support of his complaint. However, it is amatter of discretion and the Magistrate is not bound to call uponthe complainant to remain present before the court and to examinehim upon oath for taking decision whether or not to issue processon the complaint under Section 138 of the NI Act. For the purposeof issuing process under Section 200 of the Code, it is open to theMagistrate to rely upon the verification in the form of affidavitfiled by the complainant in support of the complaint under Section138 of the NI Act. It is only if and where the Magistrate,after considering the complaint under Section 138 of theNI Act, documents produced in support thereof and theverification in the form of affidavit of the complainant, is ofthe view that examination of the complainant or hiswitness(s) is required, the Magistrate may call upon thecomplainant to remain present before the court and examinethe complainant and/or his witness upon oath for taking adecision whether or not to issue process on the complaintunder Section 138 of the NI Act.

30. In the light of the discussion, we are of the view that thepower-of-attorney holder may be allowed to file, appear anddepose for the purpose of issue of process for the offencepunishable under Section 138 of the NI Act. An exception to theabove is when the power-of-attorney holder of the complainantdoes not have a personal knowledge about the transactions thenhe cannot be examined. However, where the attorney holderof the complainant is in charge of the business of thecomplainant payee and the attorney holder alone ispersonally aware of the transactions, there is no reason whythe attorney holder cannot depose as a witness.Nevertheless, an explicit assertion as to the knowledge ofthe power-of-attorney holder about the transaction inquestion must be specified in the complaint. On this count,the fourth question becomes infructuous.”

The answer to the question raised for consideration is containedin para 33 which read as hereunder: -

33. While holding that there is no serious conflict between thedecisions in M.M.T.C. and Vashdeo Bhojwani, we clarify theposition and answer the questions in the following manner:

33.1. Filing of complaint petition under Section 138 of theNI Act through power of attorney is perfectly legal andcompetent.

33.2. The power-of-attorney holder can depose and verifyon oath before the court in order to prove the contents ofthe complaint. However, the power-of-attorney holder musthave witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regardingthe said transactions.

33.3. It is required by the complainant to make specificassertion as to the knowledge of the power-of-attorneyholder in the said transaction explicitly in the complaintand the power-of-attorney holder who has no knowledgeregarding the transactions cannot be examined as a witnessin the case.

33.4. In the light of Section 145 of the NI Act, it is open to theMagistrate to rely upon the verification in the form of affidavitfiled by the complainant in support of the complaint under Section138 of the NI Act and the Magistrate is neither mandatorily obligedto call upon the complainant to remain present before the Court,nor to examine the complainant of his witness upon oath for takingthe decision whether or not to issue process on the complaintunder Section 138 of the NI Act.

33.5. The functions under the general power of attorney cannotbe delegated to another person without specific clause permittingthe same in the power of attorney. Nevertheless, the general powerof attorney itself can be cancelled and be given to another person.”

11. A cumulative perusal of the facts of the instant case wouldindicate that the requirement as indicated in A.C. Narayanan, (supra)are in fact satisfied. Firstly, as noted above, the complaint was filed inthe name of the company i.e., “the payee”, through Mr. Subhasis KumarDas, General Manager (Accounting). The authorisation dated 23.05.2015

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Aby the Managing Director in his favour (Annexure P-17) discloses thatMr. Priyabrata Panda, Managing Director of the appellant company hadauthorised Mr. Subhasis Kumar Das, General Manager (Accounting) toinstitute criminal proceedings, including proceedings under the provisionsof the N.I. Act and civil proceedings on behalf of the company againstM/s. SMS Asia Private Limited (respondent), to represent the companyBand take all necessary actions in the matter in learned SDJM’s Court.The specimen signature of Mr. Subhasis Kumar Das has also beenattested by the Managing Director. The Managing Director apart fromhimself being the key managerial personnel of the appellant company,

has also been delegated the power by the Board of Directors throughCthe document dated 06.04.1998 (Annexure P-16). Through the saiddocument the Managing Director has been delegated, in general, allpowers necessary for the management and operation of the companyand it has been specified among others, to exercise the power relating toimportant issues affecting the company’s land and property. Throughthe said document, the Managing Director is also empowered to delegateDwhere necessary and to the extent required, any of the powers delegatedto him, to his subordinate officers. The above noted documents woulddisclose that the complaint under Section 138 NI Act was filed on behalfof the “payee” company with due authorisation.

12. The next aspect on which the High Court has interfered is onEaccepting the contention that there is no averment in the complaint as towhether the General Manager (Accounting) had any knowledge aboutthe transaction or he was a witness to the transaction. On the said aspectit is noted that the transaction between the parties is based on theagreement dated 18.07.2014 (Annexure P-1). The said document depicts,Fbelow the signature of the executives representing the appellant and therespondent company, a witness each from either side have appendedtheir signatures. The witness on behalf of the appellant company is noneother than Mr. Subhasis Kumar Das who was at that point in time,designated as General Manager (Commercial). Further, the documentfor reconciliation of account spanning the period from 01.04.2011 toG30.09.2014, as carried out on 28.10.2014, depicts that the same wasattested by the representatives of both the companies. The appellantcompany is represented by Mr. Subhasis Kumar Das. That apart, whenthe cheques were dishonoured, it was Mr. Subhasis Kumar Das, GeneralManager (Accounting) who had issued the notices (Annexure P-11, 12-H13) on behalf of the appellant company, to the respondent company. The said documents would indicate that the person who had knowledge ofthe transaction and was witness to it, has been authorized and hasinstituted the complaint on behalf of the company.

13. Apart from the factual aspects as stated in the complaint,relating to the transaction, the complaint as also the affidavit supportingthe complaint contain averments regarding authorization in favour ofand knowledge on the part of Mr. Subhasis Kumar Das, which read ashereunder: - “That, the complainant Company incorporated under the companiesAct 1956 and having registered office At/PO/PS-Belpahar, Dist.-Jharsuguda, (Odisha) represent through its General Manager(Accounting), Shri Subhasis Kumar Das, aged about 47 years,S/O Shri Gopal Chandra Das and also authorize by the Companyto file this complaint.”

The verifying affidavit reads as hereunder:- “I, Sri. Subhasis Kumar Das, aged about 47 years, S/o. GopalChandra Das General Manager (Accounting) of M/s. TRLKrosaki Refractories Limited, At / PO /PS- Belpahar, Dist.-Jharsuguda (Odhisa), do hereby solemnly affirm and state asfollows:-

1. That, I am the General Manager (Accounting)of M/s. TRL Krosaki Refractories Limited, At /PO / PS- Belpahar, Dist.-Jharsuguda (Odisha) andcompetent to file this complaint petition.

2. That, facts stated above in this complaintpetition from Para : 1 to 13 are true to the bestof my knowledge, belief and basing on therelevant documents.”

In addition, the affidavit filed in lieu of the oral sworn statementbefore the learned SDJM to enable cognizance to be taken contains theaverment as follows: - “That I am the authorized representative of the complainantCompany incorporated under the companies Act 1956 and havingregistered office At/PO/PS- Belpahar, Dist. Jharsuguda (Odisha)has filed this complaint petition against the accused person.”

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A14. A meaningful reading of the above would indicate that thecompany having authorized the General Manager (Accounting) andthe General Manager (Accounting) having personal knowledge had infact been clearly averred. What can be treated as an explicit averment,cannot be put in a straitjacket but will have to be gathered from thecircumstance and the manner in which it has been averred andBconveyed, based on the facts of each case. The manner in which acomplaint is drafted may vary from case to case and would also dependon the skills of the person drafting the same which by itself, cannotdefeat a substantive right. However, what is necessary to be takennote of is as to whether the contents as available in the pleading wouldCconvey the meaning to the effect that the person who has filed thecomplaint, is stated to be authorized and claims to have knowledge ofthe same. In addition, the supporting documents which were availableon the record by themselves demonstrate the fact that an authorizedperson, being a witness to the transaction and having knowledge of thecase had instituted the complaint on behalf of the “payee” companyDand therefore, the requirement of Section 142 of N.I. Act was satisfied.In Vinita S. Rao vs. Essen Corporate Services (P) Ltd. (2015) 1SCC 527, to which one of us (Hon’ble CJI) was a member of theBench has accepted the pleading of such a nature to indicate the powerto prosecute the complaint and knowledge of the transaction asEsufficient to maintain the complaint.

15. Despite our conclusion that the documents available on recordwould on facts satisfy the requirement relating to delegation of power andalso knowledge of the transaction by the person representing the Companyin the instant case, it is also necessary for us to keep in perspective thatthough the case in A.C. Narayanan (supra) has taken the center stage ofFconsideration, the facts involved therein were in the background of thecomplainant being an individual and the complaint filed was based on thepower of attorney issued by the “payee” who was also an individual. Insuch an event, the manner in which the power was being exercised wasto be explicitly stated so as to establish the right of the person prosecutingGthe complaint, to represent the payee i.e., the complainant. The positionthat would emerge when the complainant is a company or a corporateentity will have to be viewed from a different standpoint. In this regard inSamrat Shipping Co. Pvt. Ltd. Vs. Dolly George (2002) 9 SCC 455,while disapproving the manner in which cognizance was refused to betaken and the complaint had been dismissed by the learned Magistrate atHthe threshold, this Court has held as hereunder:

“3. Having heard both sides we find it difficult to support theorders challenged before us. A company can file a complaintonly through human agency. The person who presented thecomplaint on behalf of the Company claimed that he is theauthorized representative of the company. Prima-facie, thetrial court should have accepted it at the time when acomplaint was presented. If it is a matter of evidence whenthe accused disputed the authority of the said individual topresent the complaint, opportunity should have been givento the complainant to prove the same, but that opportunityneed be given only when the trial commences. The dismissalof the complaint at the threshold on the premise that the individualhas not produced certified copy of the resolution appears to betoo hasty an action. We, therefore, set aside the impugned ordersand direct the trial court to proceed with the trial and dispose of itin accordance with law. Parties are directed to appear before thetrial court on 31.1.2000.”

16. Further, in National Small Industries Corporation Ltd. Vs.State (NCT of Delhi) and Ors. (2009) 1 SCC 407, this Court thoughwas essentially considering the issue relating to the exemption availableagainst examining a public servant keeping in view the scope underSection 200 (a) of Cr.PC, has exhaustively considered the validity of acomplaint under Section 138 of N.I. Act and the satisfaction of therequirement under Section 142 thereof. In the said context this Courthas held as hereunder: - “14. The term “complainant” is not defined under the Code. Section142 of the NI Act requires a complaint under Section 138 of thatAct to be made by the payee (or by the holder in due course). Itis thus evident that in a complaint relating to dishonour of a cheque(which has not been endorsed by the payee in favour of anyone),it is the payee alone who can be the complainant. The NI Actonly provides that dishonour of a cheque would be an offence andthe manner of taking cognizance of offences punishable underSection 138 of that Act. However, the procedure relating toinitiation of proceedings, trial and disposal of such complaints, isgoverned by the Code. Section 200 of the Code requires that theMagistrate, on taking cognizance of an offence on complaint, shallexamine upon oath the complainant and the witnesses present A

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and the substance of such examination shall be reduced to writingand shall be signed by the complainant and the witnesses. Therequirement of Section 142 of the NI Act that the payeeshould be the complainant, is met if the complaint is in thename of the payee. If the payee is a company, necessarilythe complaint should be filed in the name of the company, ifa company is the complainant. A company can berepresented by an employee or even by a non-employeeauthorized and empowered to represent the company eitherby a resolution or by a power of attorney.

16. Section 142 only requires that the complaint shouldbe in the name of the payee. Where the complainant is acompany, who will represent the company and how thecompany will be represented in such proceedings, is notgoverned by the Code but by the relevant law relating tocompanies. Section 200 of the Code mandatorily requiresan examination of the complainant; and where thecomplainant is an incorporeal body, evidently only anemployee or representative can be examined on its behalf,As a result, the company becomes a de jure complainantand its employee or other representative, representing itin the criminal proceedings, becomes the de factocomplainant. Thus in every complaint, where thecomplainant is an incorporeal body, there is a complainant

– de jure, and a complainant-de facto. Clause (a) of theproviso to Section 200 provides that where the complainant is apublic servant, it will not be necessary to examine the complainantand his witnesses. Where the complainant is an incorporeal bodyrepresented by one of its employees, the employee who is apublic servant is the de facto complainant and in signing andpresenting the complaint, he acts in the discharge of his officialduties. Therefore, it follows that in such cases, the exemptionunder clause (a) of the first proviso to Section 200 of the Codewill be available.

19. Resultantly, when in a complaint in regard to dishonourof a cheque issued in favor of a company or corporation, forthe purpose of Section 142 of the NI Act, the company willbe the complainant, and for purposes of Section 200 of the

Code, its employee who represents the company orcorporation, will be the de facto complainant. In such acomplaint, the de jure complainant, namely, the companyor corporation will remain the same but the de factocomplainant (employee) representing such de jurecomplainant can change, from time to time. And if the defacto complainant is a public servant, the benefit of exemptionunder clause (a) of the proviso to Section 200 of the Code will beavailable, even though the complaint is made in the name of acompany or corporation.”

(emphasis supplied)

17. In that view, the position that would emerge is that when acompany is the payee of the cheque based on which a complaint isfiled under Section 138 of N.I. Act, the complainant necessarily shouldbe the Company which would be represented by an employee who isauthorized. Prima-facie, in such a situation the indication in thecomplaint and the sworn statement (either orally or by affidavit) to theeffect that the complainant (Company) is represented by an authorizedperson who has knowledge, would be sufficient. The employment ofthe terms “specific assertion as to the knowledge of the power ofattorney holder” and such assertion about knowledge should be “saidexplicitly” as stated in A.C. Narayanan (supra) cannot be understoodto mean that the assertion should be in any particular manner, muchless only in the manner understood by the accused in the case. All thatis necessary is to demonstrate before the learned Magistrate that thecomplaint filed is in the name of the “payee” and if the person who isprosecuting the complaint is different from the payee, the authorisationtherefor and that the contents of the complaint are within his knowledge.When, the complainant/payee is a company, an authorized employeecan represent the company. Such averment and prima facie materialis sufficient for the learned Magistrate to take cognizance and issueprocess. If at all, there is any serious dispute with regard to the personprosecuting the complaint not being authorized or if it is to bedemonstrated that the person who filed the complaint has no knowledgeof the transaction and, as such that person could not have institutedand prosecuted the complaint, it would be open for the accused todispute the position and establish the same during the course of thetrial. As noted in Samrat Shipping Co. Pvt. Ltd. (supra), dismissal ofa complaint at the threshold by the Magistrate on the question of A

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Aauthorisation, would not be justified. Similarly, we are of the view thatin such circumstances entertaining a petition under Section 482 to quashthe order taking cognizance by the Magistrate would be unjustifiedwhen the issue of proper authorisation and knowledge can only be anissue for trial.

B18. In that view of the matter, we are of the opinion that the HighCourt was not justified in entertaining the petition filed under Section482 of Cr.PC and quashing the order dated 05.11.2015, taking cognizanceof the complaint filed by the appellant.

Accordingly, we pass the following order;C

(i) The judgment dated 14.12.2017 passed in CRL. MC. No.1210 of 2017 by the High Court of Orissa, Cuttack is setaside.

(ii) The complaint in I.C.C Case No. 422 of 2015 is restored toDthe file of SDJM, Jharsuguda with a direction to list thecase on 15.03.2022 as the first date for appearance of theparties.

(iii) The respondent who has appeared herein and is representedby a counsel shall appear on the said date before the learnedEMagistrate in continuation of the proceedings whereinsummons had already been issued, without expecting freshsummons to be issued.

(iv) Keeping in view the fact that the complaint is of the year2015, the same shall be proceeded with further expeditiouslyFand be concluded in a period not later than six months fromthe first date indicated above.

(iv) The appeal is accordingly allowed with cost quantified atRs. 1,00,000/- (Rupees one lakh only) payable by therespondent to the appellant.

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19. All pending applications, if any, shall stand disposed of.

Devika Gujral

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