2021 (3) TMI 1463 - HC - Indian Laws

Dishonour of Cheque - main contention of the petitioners is that the complaint is filed against the Directors of the M/s. Caf Coffee Day, who are the petitioners herein but M/s. Caf Coffee Day is not a juristic person - Power of Attorney Holder can sign and file a complaint petition on behalf of the complainant or not - verification on oath under Section 200 of the Code - whether the complaint is maintainable as against the petitioners herein and the very contention of the learned counsel for the petitioners that complaint is not against a juristic person, is to be accepted or not? HELD THAT - On perusal of the complaint, it discloses that the same is filed against M/s Caf Coffee Day, represented by its Directors, whereas the word Global is missing. In order to substantiate the contention of the respondent, learned counsel also brought to the notice of this Court that Annexure-A notice was issued against a juristic person i.e., M/s. Caf Coffee Day Global Limited and the specific averments are made against the representative of the Company i.e., its Directors and Authorized Signatories. It is also important to note that the notice was acknowledged and reply was given by M/s Caf Coffee Day, but in the reply, the only dispute raised is with regard to the recipient Nos.5, 7, 8 and 9 stating that they are irrelevant parties. However, recipient No.5 is not a Director and others are not directly connected to M/s. Caf Coffee Day Global Limited and they are not aware of recipient No.5. Having perused the reply notice, it clearly depicts that they made part payment of Rs. 12 lakhs to the complainant and now, only on the ground of technicality, the petitioners cannot contend that a juristic person is not made as a party to the proceedings. Annexure-C discloses that the rejoinder was given to the reply notice at Annexure-B and so also Annexure D was given to M/s. Coffee Day Global Limited. When such being the facts and circumstances of the case, now the petitioners cannot contend that the complaint is not maintainable - the very contention of the learned counsel for the petitioners that the complaint is not made against a juristic person, cannot be accepted. The defences which have been taken by the petitioners are to be considered only during the course of the trial and not at this stage. The contentions raised by the petitioners herein cannot be accepted at this stage since it is a matter of trial. The complainant can even array the Company at any stage. Herein, it is a case of issuance of notice against a juristic person and its Directors - it is not a case for quashment of the proceedings on the ground of technicality and the Court has to look into the substantative material available on record and substantative justice has to be done. There are no merit in the petition to quash the proceedings initiated against the petitioners herein - petition dismissed.

Summary

Issues Involved:

1. Maintainability of the complaint against the petitioners under Section 138 of the Negotiable Instruments Act.
2. Role and knowledge of the Power of Attorney Holder in filing the complaint.
3. Compliance with Section 141 of the NI Act regarding the involvement of directors in the alleged offence.
4. The validity of the affidavit filed by the complainant.
5. The impact of not naming the juristic person (M/s. Coffee Day Global Limited) as a party to the complaint.

Issue-wise Detailed Analysis:

1. Maintainability of the Complaint:

The petitioners sought to quash the proceedings under Section 138 of the NI Act, arguing that the complaint was improperly filed. The court examined whether the complaint was maintainable against the petitioners, who were directors of M/s. Coffee Day Global Limited. The court noted that the complaint made specific averments that the directors, accused Nos.1 to 9, were in charge of the company's day-to-day affairs and had collectively decided to issue post-dated cheques to discharge the company's liability. The court found that the complaint was maintainable as it sufficiently alleged the involvement of the directors in the transaction.

2. Role and Knowledge of the Power of Attorney Holder:

A significant issue was whether the Power of Attorney Holder had the requisite knowledge to file the complaint. The court referred to the Apex Court's judgment in A.C. Narayanan v. State of Maharashtra, which clarified that a Power of Attorney Holder must have witnessed the transaction or possess due knowledge of it. In this case, the Power of Attorney Holder had stated in the affidavit that he was aware of the facts and authorized to file the complaint. The court concluded that the Power of Attorney Holder's knowledge would be tested during cross-examination, and at this stage, the affidavit's assertions were sufficient.

3. Compliance with Section 141 of the NI Act:

The petitioners contended that there was no compliance with Section 141 of the NI Act, which pertains to the liability of directors. The court observed that the complaint and affidavit explicitly stated that the directors were responsible for the company's day-to-day management and had issued the cheques. The court found that the complaint complied with the requirements of Section 141, as it specifically alleged the directors' involvement in the offence.

4. Validity of the Affidavit:

The petitioners argued that the affidavit filed by the complainant was defective. The court considered the judgment in V.R. Kamath v. Divisional Controller, which emphasized the need for proper attestation of affidavits. However, the court noted that the affidavit in question was filed during the pandemic, and while the documents were referred to but not marked, the affidavit contained the necessary averments regarding the transaction and cheques. The court deemed the affidavit valid for the purpose of taking cognizance.

5. Impact of Not Naming the Juristic Person:

The petitioners argued that the complaint was not against a juristic person, as M/s. Coffee Day Global Limited was not named. The court found that the complaint was filed against M/s. Caf'e Coffee Day, represented by its directors, and noted that the notice was issued to M/s. Coffee Day Global Limited, which responded without disputing the supply of coffee beans. The court held that the omission of the word "Global" in the complaint did not undermine its validity, as the notice and reply acknowledged the company's involvement. The court emphasized that the complaint's technical deficiencies could be addressed during the trial.

Conclusion:

The court concluded that the petitioners' contentions were matters to be addressed during the trial and not at the stage of quashing the proceedings. The complaint contained sufficient material to proceed against the petitioners, and the court rejected the petition to quash the proceedings. The order emphasized the need for substantive justice over technicalities, allowing the trial to proceed based on the available evidence.