2002 (5) TMI 871 - HC - Indian Laws

Revision petition allowed challenging dismissal of complaint under Section 138 of Negotiable Instruments Act; Board authorization not required.

Standard Chartered Bank Versus Mr. Ravi Bhandari

The court allowed the revision petition challenging the dismissal of a complaint under Section 138 of the Negotiable Instruments Act. It held that ... - Issues:1. Dismissal of complaint under Section 138 of the Negotiable Instruments Act by the trial court.2. Authority to file a criminal complaint without a resolution by the Board of Directors of the company.3. Applicability of Supreme Court judgments in criminal cases.4. Criteria for instituting complaints under the NI Act.5. Rejection of contrary views in recent Supreme Court decisions.Analysis:1. The petition challenged the order dismissing the complaint under Section 138 of the Negotiable Instruments Act. The respondent had issued a dishonored cheque, leading to the complaint by the petitioner. The trial court dismissed the complaint citing lack of authorization by the company's Board of Directors. This dismissal was based on the requirement that a company must act through its Board of Directors by passing a resolution for criminal prosecution.2. The petitioner argued that the dismissal solely on the ground of lack of authorization was unsustainable. The law allows anyone to initiate criminal proceedings by filing a complaint for offenses under the NI Act, with the only criteria being that it must be instituted by the payee or holder in due course. The petitioner contended that the dismissal based on the lack of authorization by the Board of Directors was not a valid ground for quashing the complaint.3. The court referred to established legal principles and a recent Supreme Court decision to support the petitioner's argument. It was emphasized that Section 142 of the Negotiable Instruments Act allows a complaint under Section 138 to be made by the payee or holder in due course. The court rejected the notion that only a person authorized by the Board of Directors could file a complaint, citing past judgments that emphasized the right of anyone to set the criminal law in motion by filing a complaint.4. The court highlighted the case law precedent that supported the petitioner's position, emphasizing that the eligibility criterion prescribed by Section 142 of the NI Act is satisfied as long as the complaint is in the name and on behalf of the appellant company. The court clarified that no court can decline to take cognizance solely on the ground that the complainant was not authorized by the Board of Directors, as long as the complaint meets the statutory eligibility criteria.5. In conclusion, the court allowed the revision petition, setting aside the impugned judgment and directing the trial court to further inquire into the matter in accordance with the law. The court emphasized the settled position of law regarding the criteria for instituting complaints under the NI Act and the right of any individual to file a complaint for offenses under the Act.