Cri.M.(M) No.4838 of 2000

12th February, 2002

Petitioner Counsel: Mr. ANIL GOEL
Respondent Counsel: Mr. O. P. SAXENA

Cases Cited:
Satish Jayanthilal Shah v. Pankaj Mashnruwala, 1997 CCR 603 [Para 3]
Paul George v. State, 2002 AIR SCW 266 : 2002(1) JCC 321 (SC) [Para 3]
Chander Deo Singh v. Prakash Chander Bose, AIR 1963 SC 397 [Para 4]
Dr. S.S. Khanna v. Chief Secretary, Patna, AIR 1983 SC 595 [Para 4]
J.K. International v. State, Crl.M.(M) No. 4729/2000 dt. 25.5.2001 [Para 4]
M/s. M.M.T.C. Ltd. v. M/s. Medchl Chemicals and Pharma (P) Ltd, 2002 ALL MR (Cri) 230 (S.C.) =AIR 2001 SCW 4793 [Para 6]
Vishwa Mitter v. O.P. Poddar, (1983)4 SCC 701 [Para 6]
Associated Cement Co. Ltd. v. Keshvanand, 1998 ALL MR (Cri) 689 (S.C.) =(1998)1 SCC 687 [Para 6]
Ram Richhpal Gupta v. M/s. DCM Siri Ram Consolidated Ltd, III CCR (1995) 841 [Para 7]
Directorate of Enforcement v. Deepak Mahajan, AIR 1994 SC 1775 [Para 7]

JUDGMENT

JUDGMENT :- This petition under Section 482 of the Code of Criminal Procedure, 1973 (for short "Cr.P.C.") is directed against the order dated 12th September, 2000 passed by the Court of Shri R.S. Verma, Addl. Sessions Judge, dismissing revision petition of the petitioner, up-holding the order of the Metropolitan Magistrate, dismissing the complaint instituted by the petitioner, under Section 138 of Negotiable Instrurments Act, at the pre-summoning stage on the ground that the same was not maintainable.

2. Facts in brief are that M/s. Eita India Ltd. (hereinafter referred as 'the company'), as the sole proprietor of M/s. East India Transport Agency, (for short "EITA") filed a complaint under Section 138 of Negotiable Instruments Act (for short "NI Act") against accused No.1 and the directors, accused Nos. 2 to 9, persons in-charge and responsible for its day-to-day business. It was alleged that the accused persons booked consignment through its sole proprietorship concern EITA and paid Rs. 14,000/-, leaving a balance of Rs. 5,93,860/-. The accused persons acknowledged and confirmed their liability and issued two cheques of Rs. 25,000/- each in favour of the sole proprietorship concern EITA. On presentation the said cheques were received back dishonoured with the remark "Not arranged for/Exceeds arrangement"; payment was not made despite demand through legal notice dated 3.10.97; and ultimately the said complaint was filed on 21.11.97. The complainant in support of the case examined J.K. Nahata, Regional Manager and duly authorised representative of the company as CW-1, who stated on oath the above facts and proved certificate of incorporation, Ex.CW-1/A; power of attorney on behalf of company Ex. CW-1/C; resolution by the Board of Directors of the company Ex. CW-1/D; letter of confirmation Ex. CW-1/E; two dishonoured cheques Ex. CW-1/F and G; the covering memos of the dishonoured,cheques Ex. CW-1/H and 1; notice dated 3.10.97 Ex. CW-1/J; postal receipts Ex. CW1/K and L; certificate of service of notice Ex. CW-1/M and the complaint Ex. CW-1/N.

3. By orders dated 25.11.99 after noticing the facts, learned trial Court found that the complaint filed by the company was not maintainable. Reliance was placed upon the observations made by the learned Judge of the Gujarat High Court in Satish Jayanthilal Shah v. Pankaj Mashruwala, 1997 CCR 603, wherein it was held that the sole proprietorship concern is not an independent legal juristic entity in the eyes of law, therefore, it can neither initiate any proceedings nor any proceedings can be initiated against it. In that case the cheque was in the name of the sole proprietorship concern and the complaint instituted under Section 138 of the NI Act by its proprietor was held to be valid. It was further held that since the cheques were not in favour of the company, therefore, the complaint by the company was not maintainable. Against the order dismissing the complaint, petitioner filed a revision petition which was dismissed by the learned Addl. Sessions Judge by a bald and unreasoned order dated 12.9.2000, holding that there was no illegality or impropriety in the impugned order. The order disposing of the revision petition should indicate application of mind on the facts or the pleas raised before the Court, as has been held by the Supreme Court in the recent decision in Paul George v. State, 2002 AIR SCW 266. This order is under challenge.

4. The complaint was dismissed at the pre-summoning stage. It is not a case of discharge or acquittal. The accused does not have any right to take part in the proceedings, at this stage. Reference in this regard can be made to the decision of Supreme Court in Chander Deo Singh v. Prakash Chander Bose, AIR 1963 SC 397 and Dr. S.S. Khanna v. Chief Secretary, Patna, AIR 1983 SC 595. Therefore, notice to the accused persons/respondents in the complaint, at this stage, was not deemed essential; as held by this Court in J.K. International v. State, Crl.M.(M) No. 4729/2000 decided on 25.5.2001.

5. I have heard learned counsel for petitioner as well as learned counsel for State (respondent No. 1) and have been taken through the record. Section 142 of the NI Act provides that the complaint under Section 138 can be filed by the payee or the holder of the cheque in due course. This statute prescribes the offence and makes special provision for taking cognizance of such offences. There can be no doubt that the complaint requesting the Magistrate to take cognizance of the offence under NI Act must satisfy the eligibility criterion prescribed under the statute. The complaint under Section 138 of the NI Act must be filed by the payee or, holder of the cheque in due course. The question here is, whether this criteria is satisfied or not ? In order to appreciate this question, it is necessary to know as to who instituted the complaint. In the heading, the complainant is described as under:

"M/s.Eita India Ltd.,

Sole Proprietor of,

M/s. East India Transport Agency, having its registered office at, 20-B, Abdul Hamid Street, Calcutta-700 069, and its Regional Office at, 1558- 59 (2nd Floor), Church Road, Kashmere Gate, Delhi-110 006

.......complainant."

6. The sole proprietorship concern M/s. East India Transport Agency (EITA) was the payee, therefore, under Section 142 of NI Act could validly institute the complaint, but it cannot act on its own and has to sue through its proprietor. The proprietor in this case is the company M/s. Eita India Ltd. which has filed the complaint through one of its authorised representatives. This position is fully explained in the complaint as well as in the evidence led before the Court. The name of the payee is reflected in the heading of the complaint. The Supreme Court in M/s. M.M.T.C. Ltd. and Anr. v. M/s. Medchl Chemicals and Pharma (P) Ltd. and another, AIR 2001 SCW 4793 : (2002 ALL MR (Cri) 230 (S.C.)), has held that the complaint could not be dismissed merely on the ground that it was instituted by the Manager or Dy. General Manager of the Company who was not authorised by the Board of Directors to sign and file the complaint for the company. The defect was held to be curable. After referring to its earlier decisions, it was held as under:

"11.This Court has as far back as, in the case of Vishwa Mitter v. O.P. Poddar reported in (1983) 4 SCC 701, held that it is clear 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 take cognizance of the offence must satisfy the eligibility criterion prescribed by the statute. In the present case the only eligibility criterion prescribed by Section 142 is that the complaint must be by the payee or the holder in due course. This criterion is satisfied as the complaint is in the name and on behalf of the appellant Company.

12. In the case of Associated Cement Co. Ltd. v. Keshvanand reported in (1998) 1 SCC 687 : (1998 ALL MR (Cri) 689 (S.C.)), it has been held by this Court that the complainant has to be a corporeal person who is capable of making a physical appearance in the Court. It has been held that if a complaint is made in the name of a incorporeal person (like a company or corporation) it is necessary that a natural person represents such juristic person in the Court. It is held that the Court looks upon the natural person to be the complainant for all practical purposes. It is held that when the complainant is a body corporate it is the de jure complainant, and it must necessarily associate a human being as de facto complainant to represent the former in Court proceedings. It has further been held that no Magistrate shall insist that the particular person, whose statement was taken on oath at the first instance, alone can continue to represent the company till the end of the proceedings. It has been held that there may be occasions when different persons can represent the company. It has been held that it is open to the de jure complainant company to seek permission of the Court for sending any other person to represent the company in the Court. Thus, even presuming, that initially there was no authority, still the company can, at any stage, rectify that defect. At a subsequent stage the company can send a person who is competent to represent the company. The complaints could thus not have been quashed on this ground." (emphasis supplied)

7. In this case as noticed above the cheques in question were issued in the name of the sole proprietorship concern M/s. East India Transport Agency (EITA). The sole proprietorship concern could act only through its proprietor which happens to be the company. It is a de jure complainant; and it had to act through some human agency. Thus the complaint could be filed by any person connected with the company, may be its director or manager or any other person, so authorised by the company, who can represent the company in legal proceedings. Any other view would defeat the purpose and object of the Act. This view finds support from a decision of this Court in Ram Richhpal Gupta v. M/s. DCM Siri Ram Consolidated Ltd., III CCR (1995) 841. It is permissible for the Courts to take into account the ostensible purpose or object and the real legislative intent. A bare mechanical interpretation of the words devoid of concept of purpose will render the legislative intent inane, as was held by the Apex Court in Directorate of Enforcement v. Deepak Mahajan, AIR 1994 SC 1775.

8. For the foregoing reasons, the order passed by the Magistrate dismissing the complaint on the ground of maintainability and the order passed by the Addl. Sessions Judge dismissing the revision petition are not sustainable and are set aside. The trial Court is directed to make further enquiry into the complaint, in accordance with law.

9. Petition stands disposed of.

10. Trial Court record be sent back forthwith.

Petition allowed.