- The Hon’ble Supreme Court (SC or Court),in the case of M/s TRL Krosaki Refractories Ltd v M/s SMS Asia Private Limited & Anr,has observed that in cases concerning cheque bounce under Section 138 of the Negotiable Instruments Act, 1881 (NI Act), the complainant/ payee, being a company, can be represented by its authorised employee.
- The Respondent issued several cheques to the complainant amounting to ₹1,10,00,000. The cheques were dishonoured by the Bank and returned with the endorsement, ‘account closed’. The Appellant issued notices neither complied with noir responded by the Respondent.
- The Appellant filed a complaint with the Sub Divisional Judicial Magistrate, (JM) under Sections 138 and 142 of the NI Act. The learned JM, being satisfied that the complaint under Section 138 of NI Act against the accused is in accordance with law, took cognizance of theplaint and directed summons to the Respondent.
- The Respondent, however, filed a petition under Section 482 of the Criminal Procedure Code (CrPC) before the High Court (HC), contending that complaint filed was filed by the General Manager (Accounting) (GM), representing the complainant company, who neither had knowledge about the alleged transaction, nor was he a witness to the transaction.
- Accepting the contention of the Respondent that the complaint did not specify the manner in which the Appellant had authorised it’s GM and no averments were also made whether the GM had knowledge about the transaction or if he was a witness to the transaction. The Court also noted that no Board Resolution or authorisation in favor of the GM was filed before the Magistrate. In this regard, the HC placed reliance on an earlier judgment passed by the Court in the case of A.C. Narayanan v State of Maharashtra & Anr.
- Before the SC, the Appellant contended that the HC misconstrued the principle laid out in in A.C. Narayanan (supra) to non-suit it. The Appellant contended that that the order passed by the learned JM taking cognizance would indicate that the learned JM perused the complaint and the entire record placed before it. The Appellant also submitted that a perusal of the agreement between it and the Respondent disclosed that the GM was a witness to the transaction and he was also the one who signed and dispatched the notices sent to the Respondent when the cheques were dishonoured. Thus, the GM was fully aware of the case and also a competent person to maintain the plaint.
- However, the Respondent still pressed on sustaining the judgment of the HC on the ground that there should be explicit averment to the effect that the person filing the complaint is authorized by the complainant and has knowledge of the transaction in question so as to maintain the complaint. Further, since the judgment was passed relying on an earlier order, the same should not be interfered with.
- Taking noted of the contention put forth by both sides and analysing the relevant provisions of the NI Act, the Court observed that a perusal of the complaint would disclose that the Appellant filed the complaint in its name through the GM and it was also the payee in the cheques dishonoured. Thus, the requirement of Section 142 of the NI Act that the complaint should be filed by the payee stood satisfied. This also satisfies the requirement laid down in the case of A.C. Narayanan (supra).
- On the contention that there was no averment in the plaint whether the GM was aware of the transaction or whether he was a witness to the transaction, the SC noted that the agreement between the Appellant and Respondent was signed by a witness from each side and the GM was the witness from the Appellant’s side. The Court also made note of the notice and reconciliation statement signed by the GM.
- The Court observed that what can be treated as an explicit averment, cannot be put in a straitjacket but will have to be gathered from the circumstance and the manner in which it has been averred and conveyed, based on the facts of each case. What is necessary to be taken note of is whether the contents in the pleading would convey the meaning to the effect that the person who has filed the complaint, is stated to be authorized and claims to have knowledge of the same.
- The Court further noted that Section 142 of the NI Act only requires that the complaint should be in the name of the payee. 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 CrPC but by the law relating to the Companies. Section 200 of the Code mandatorily requires an examination of the complainant; and where the complainant is an incorporeal body, evidently only an employee or representative can be examined on its behalf. As a result, the company becomes a de jure complainant and its employee or other representative, representing it in the criminal proceedings, becomes the de facto complainant.
- In view of the above, the Court held that the opinion of the High Court in entertaining the petition by the Respondent was not justified. In effect, the appeal was allowed with an instruction to conclude the proceedings not later than 6 months from the date of the instant order.
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