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TMI Blog2007 (6) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Prashant Shirodkar styling himself to be a Director of the said Complainant. The said complaint was filed with the allegation that the accused was in their employment and was in charge of their shop at Canacona. As per the Complainant, the accused had issued a cheque to the Complainant bearing No.032196 dated 4-3-1997 for a sum of Rs.71,850/-drawn on the Goa State Co-operative Bank Ltd., Canacona Branch, which when presented for payment was returned dishonoured for want of insufficient funds. The Complainant, therefore, sent the statutory notice to the accused dated 15-4-1997 which the accused received but failed to comply the same and therefore the Complainant filed the complaint on 15-5-2005 alleging that the accused committed an offence punishable under Section 138 of the said Act. At this very stage, it may be noted that prior to the filing of this complaint on or about 23-5-1997, the said Director Shri Prashant Shirodkar had filed a complaint/FIR against the accused, which was produced by the accused in the course of the trial of the complaint, alleging that this very cheque was forged by the accused. There is no dispute that the said complaint was investigated by the Can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng running the affairs of the company, are taken by the Board of Directors. The Directors of Companies have been variously described as agents, trustees or representatives, but one thing is certain that the Directors act on behalf of a company in a fiduciary capacity and their acts and deeds have to be exercised for the benefit of the company. They are agents of the company to the extent they have been authorized to perform certain acts on behalf of the company. 9. The Apex Court in the case of M/s. M. M. T. C. Ltd. and Anr. v. M/s. Medchl Chemicals Pharma(P) Ltd. and Anr. (supra) referred to its earlier decision in the case of Vishwa Mitter v. O. P. Poddar 1984CriLJ1 wherein it was held that anyone can set the criminal law in motion by filing a complaint of facts constituting an offence before a Magistrate entitled to take cognizance. It has been held that no Court can decline to take cognizance on the sole ground that the complainant was not competent to file the complaint. It has been held that if any special statute prescribes offences and makes any special provision for taking cognizance of such offences under the statute, then the complainant requesting the Magistrate to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. There is no dispute that in this case it is the Complainant, a Company was the payee. On the contrary it can be seen from the power of attorney produced on behalf of the Complainant that if at all there was a resolution the same was in favour of the said Pednekar in whose favour the said power of attorney was given. Shri Prashant Shirodkar had none in his favour and none was produced. It is therefore obvious that the said Prashant Shirodkar had no authorization from the Complainant Company to lodge the complaint. As stated by the Apex Court in Dale Carrington Invt.(P) Ltd. and Anr. v. P.K. Prathapan and Ors. (supra) unless there was a resolution by the Board of Directors Shri Prashant Shirodkar had no power to lodge a complaint as an individual Director. It follows therefrom that no cognizance could have been taken on a complaint filed by the Director on behalf of the Company without a resolution to that effect and much less the accused convicted in such a complaint. Therefore, it could not be said that the complaint was filed by the payee or the holder in due course of the subject cheque as contemplated by Clause (a) of Section 142 of the Act. 11. On behalf of the accused, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use of action arises necessarily in favour of the company. A Director of the company cannot be said to be a holder in due course since the company itself is a legal person. Of course one of the Directors can present a complaint if there is a proper authorization in favour of such a Director.... One of the Directors of the Company cannot be said to be a payee or holder in due course in terms of Section 142(a) of the Negotiable Instruments Act. 14. The case of A Krishnan v. S. P. Kumar was again considered at the stage of quashing of process issued. That was a case where the complaint was filed not only in the capacity of the Manager but also an authorization given by managing partner and therefore it was held that the complaint could not be quashed as invalid. 15. In the case of M/s. Mohanlal Khemchand and Ors. v. Pawan Kumar Mohanka and Ors. the complaint was filed by the Manager of the Company and it was noticed that there were averments in the complaint to the effect that the complainant was duly authorized by the said Company to make the complaint and the letter of authorization was also annexed to the complaint and therefore the Court held that there was no illegality in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not disclose any authorization. It was held that taking cognizance of the complaint was barred under Section 142(a) of the Act. In Nibro Ltd. v. National Insurance Co. Ltd. 1991 70 Com Cas 388 it was held that...the powers of a company in respect of a particular matter are to be exercised by the company in general meeting, in all other cases the Board of Directors are entitled to exercise all its powers.... It is true that ordinarily the Court will not non-suit a person on account of technicalities. However, the question of authority to institute a suit on behalf of a company is not a technical matter.... It has far- reaching effects. Order 29, Rule 1 of C.P.C., 1908 does not authorize persons mentioned therein to institute suits on behalf of a Corporation. It only authorizes them to sign and verify the pleadings on behalf of the Corporation. Thus, unless a power to institute a suit is specifically conferred on a particular Director, he has no authority to institute a suit on behalf of the Company. Such power can be conferred by the Board of Directors only by passing a resolution in that regard. 21. A Director, as an individual Director, has no power to act on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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