2013 (9) TMI 1183 - HC - Indian Laws

Company must authorize human agent for legal actions to maintain complaint under Negotiable Instruments Act.

Canara Workshops Ltd Manglore Versus Mantesh

Canara Workshops Ltd Manglore Versus Mantesh - TMI Issues Involved:1. Whether the complaint was filed and prosecuted by an authorized person to represent the complainant-company.2. Validity of the transaction and other objections raised by the respondent.Summary:Issue 1: Authorization to File ComplaintThe primary issue addressed was whether the complaint was filed and prosecuted by an authorized person to represent the complainant-company. The appellant, a company engaged in manufacturing automobile spring leaves, alleged an offence u/s 138 of the Negotiable Instruments Act, 1881, against the respondent, a dealer in automobile spare parts. The respondent had issued a cheque for Rs. 65,294, which was dishonored for want of funds. The complainant issued a notice u/s 138 of the N.I. Act and subsequently filed a complaint due to non-compliance with the demand.The Court below considered whether the complaint was filed by a competent person and answered in the negative, leading to the acquittal of the respondent. The High Court noted divergent views from various High Courts on this issue. It emphasized that a company, being a legal entity, must be represented by a human agency in legal proceedings. The Court referred to several precedents, including Gopalakrishna Trading Company v. D. Baskaran, which stated that a company must be represented by someone connected with its affairs, such as a manager, director, or any authorized person.The High Court also cited the case of Samrat Shipping Company Private Limited v. Dolly George, where the Apex Court held that a company can file a complaint through a human agency, and the Trial Court should accept the representation prima facie. If the accused disputes the authority, the complainant should be given an opportunity to prove it during the trial.In the present case, the Trial Court found that the general power of attorney (Exhibit P 14) executed by the Executive Director of the complainant in favor of PW1 did not specifically authorize filing a complaint u/s 138 of the N.I. Act. There was no proof that the Executive Director had the authority to file the complaint or execute the power of attorney. Consequently, the complaint was deemed not maintainable.Issue 2: Validity of the Transaction and Other ObjectionsSince the complaint was not filed by an authorized person, the Court did not need to consider other points arising in the case. The focus remained on the authorization issue, and the Trial Court's decision on this point was upheld. The acquittal of the accused on other grounds was also deemed not illegal.Conclusion:The appeal was dismissed, affirming the Trial Court's decision that the complaint was not filed by an authorized person and thus was not maintainable. The acquittal of the respondent was upheld.