Gajanand Agarwal vs Sharma Traders Industries (P) Ltd. and Another

Tamada Gopalakrishna, J.

1.This is a petition u/s 482 of the Code of Criminal Procedure to quash the proceedings in C.C. No. 29 of 1999 on the file of the Special Judicial I Class.Magistrate, Mobile Court, Vizianagaram.

The allegations, according to the complaint, are that the petitioner as well as the 1st respondent are businessmen and, in their business transactions the petitioner issued two cheques bearing Nos. 710222 and 710223 dated 26.10.1996 for Rs. 43,450.56 and Rs. 1,07,000/- respectively. On presentation of the cheques, they were bounced with an endorsement "Referred to Drawer". After complying with the formalities as contemplated u/s 138 of the Negotiable Instruments Act, the 1st respondent herein filed a complaint which was registered and taken on file as C.C. No. 29 of 1999 on the file of the Additional Judicial I Class Magistrate, Vizianagaram, for the alleged offence punishable u/s 138 of the Negotiable Instruments Act.

The present petition is filed by the petitioner herein who is the accused in the aforementioned case i.e., C.C. No. 29 of 1999 mainly on the ground that the Manager of the 1st respondent-firm viz., Sri Ramesh Kumar Gupta, is not authorised to file the complaint on behalf of the said firm M/s. Shrama Traders & Industries (P) Ltd., as there is no averment In the complaint to the effect that the Manager is authorised to file the complaint; nor there is any document to establish that he is authorised to do so and as such it is an abuse of the process of Court and is liable to be quashed u/s 482 of the Code of Criminal Procedure. Mr. K.V. Subrahmanya Naursu, learned Counsel for the petitioner, relied on a judgment of this Court in Swastic Coaters Pvt. Ltd. v. Deepak Brothers 1 (1998) BC 47 : 1997 (1) APLJ 423, and an unreported judgment of a learned Single Judge of this Court in Criminal Appeal No. 180 of 1995 dated 28.11.1996.

Mr. Vedula Srinivas, learned Counsel appearing for the 1 st respondent, contended that no authorisation need be filed along with the complaint and it is purely a question of fact which is to be gone into by the Trial Court and that during the course of trial if ultimately the Trial Court feels that an authorization is required, it is for that Court to record a finding to that effect and deal with the case in accordance with law but on that ground, the proceedings in C.C. No. 29 of 1999 cannot be quashed. In support of his argument, Mr. Srinivas relied on two judgments of our High Court in L. Raja Krishna Reddy Vs. Satwik Drugs Ltd. and another, , and an unreported judgment of a learned Single Judge of this Court in Criminal Petition No. 4660 of 1999 dated 10.7.2000.

Section 141 of the Negotiable Instruments Act, 1881 deals with offences by Companies and the Explanation to the said section is as follows:

"(a) ''Company'' means any body corporate and includes a firm or other association of individuals; and

(b) ''director'' in relation to a firm, means a partner in the firm."

It is needless to say that a company is a juristic person, a legal entity. A company, though is a legal entity, does not have soul, mind, body and limbs to walk to Court for preference of a complaint. The dictates of common sense, practical wisdom, prudence and expedience impel the Courts in such a situation to allow a company to be represented by some person concerned with the affairs of the Company. Similarly, in case of a firm also, though strictly not a legal entity for all purposes, but a legal entity for the purpose of this Act, has to act through some human agency connected with the affairs of the firm. In the normal course, such legal entities are managed by manager, partner, managing partner, director, managing director or principal officers like other executives incharge of affairs and administration. In my view, when the law expressly recognizes the right of such persons and executives to represent the interest of legal entity, like corporate body, company, firm, etc., no special and express authorization is required for initiating any legal proceedings like the present one. In the instant case, the 1st respondent is a Private Limited Company having a legal entity, a juristic person incorporated under the Companies Act and the complaints have been filed in the name of the said legal entity, of course, by its manager Sri Ramesh Kumar Gupta. Hence, in my considered opinion, no authority is required specially keeping in mind the Explanation to Section 141 of the Negotiable Instruments Act, which is extracted above.

A learned Single Judge of this Court has taken the same view in L. Rajakrishna Reddy''s case (supra). It was observed therein thus :

"Viewed in the said background, I am of the opinion that the petitioner had not made out any case whatsoever warranting interference of this Court, at this stage. It is not possible for this Court to express any opinion whatsoever with regard to the allegations levelled by the first respondent complainant in the complaint. The allegations may be true or not is entirely a different question. Whether G. Madan Mohan Reddy, Material Manager is entitled to represent the complainant-company or not is a question of fact which can be gone into by the Trial Court and it shall always be open to the petitioner to raise all such objections and challenge the authority of the said person, who is described as Material Manager, to represent the complaint-company. Whether the said Material Manager is authorised to file the complaint against the petitioner, again is a question of fact. The complaint cannot be quashed on such disputed questions of fact. It is not the case of the first respondent/complainant himself that the Material Manager is not authorised to represent the company. In the complaint, A2 is shown as a director of M/s. Bhagat Research Laboratories. Whether he is a director and represents the company and whether he is liable for the actions of the company, itself, is again a question of fact. No opinion need be expressed on these aspects. According to the first respondent/complainant, the accused has issued a post-dated cheque and on demand failed to pay the amounts. Consequently the first respondent/complainant has to lodge the complaint u/s 138 of the Act."

In the above cited case, it was clearly observed that the question whether the Material Manager is entitled to represent the complainant-company or not is a question of fact which can be gone into by the Trial Court and it shall always be open to the petitioner to raise all such objections and challenge the authority of such person who is described as Material Manager to represent the complainant company. Whether the said Material Manager is authorised to file complaint against the petitioner again is a question of fact. The complaint cannot be quashed on such disputed questions of fact. Similarly, the question whether the Manager of the 1 st respondent-firm in this case is authorized to file complaint on behalf of the company is a disputed question of fact, which has to be decided by the Trial Court only after full trial of the case.

In the light of the aforesaid facts and discussion by me, I am of the view that the complaint filed in the name of the legal entity is maintainable and the continuation thereof is absolutely in accordance with law. Hence, the question of quashing the proceeding u/s 482 of the Code on the ground that it is an abuse of the process of Court does not arise.

In the result, the petition is dismissed.