2002 (5) TMI 870 - HC - Indian Laws

Summary

Issues:
Challenge of taking cognizance and issue of process in a cheque dishonor case.

Analysis:
The petitioners challenged the action of taking cognizance and issuing process in a case involving a dishonored cheque. The complaint was filed by the respondent against the petitioners under Section 138 of the Negotiable Instruments Act. The petitioners contended that the complaint was signed and presented by an unauthorized person, the Manager of the payee-Bank, which they argued made the entire process illegal and unsustainable in law. They relied on various legal precedents to support their argument.

Legal Interpretation:
The Court analyzed the provisions of the Negotiable Instruments Act and emphasized that any person can set the law in motion unless the statute specifically provides otherwise. The Act stipulates that the payee or holder in due course must file a complaint for offenses under Section 138. When the payee is an incorporated body, it must be represented by an authorized person. The Act does not specify how a complaint can be filed on behalf of a company. Section 141 holds individuals in charge of a company liable for offenses committed by the company, with exceptions if the offense was committed without their knowledge. The Court clarified that a person in charge or responsible for the company can file a complaint on its behalf.

Authority to File Complaint:
The Court referred to Sections 26 and 27 of the Negotiable Instruments Act, highlighting that a duly authorized agent can file legal proceedings on behalf of a corporation. It concluded that a person who can file a complaint on behalf of a company should be someone whose actions are binding on the company. In this case, the Managing Director authorized the Branch Manager to file the complaint, making both individuals responsible and answerable to the company. The Court upheld the lower court's decision, stating that the complaint filed by the Manager was maintainable.

Conclusion:
After considering the facts and legal provisions, the Court rejected the criminal petition, affirming that the complaint filed by the Manager on behalf of the Bank was valid and maintainable. The judgment clarified the authority of individuals to file complaints on behalf of incorporated bodies and emphasized the importance of authorized representation in legal proceedings.