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        2022 (2) TMI 1112 - SC - Indian Laws

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        Company cheque dishonour complaint maintainable through authorised representative; threshold quashing on authority and knowledge was improper. A cheque dishonour complaint filed in the name of a company through its authorised General Manager was maintainable because the complaint, affidavit and ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                          Company cheque dishonour complaint maintainable through authorised representative; threshold quashing on authority and knowledge was improper.

                          A cheque dishonour complaint filed in the name of a company through its authorised General Manager was maintainable because the complaint, affidavit and supporting papers prima facie showed his authority to institute proceedings and his knowledge of the transaction. The Court held that, under the Negotiable Instruments Act, a company may prosecute through an authorised representative, and detailed proof of authorisation or knowledge is a matter for trial. Quashing at the threshold under Section 482 CrPC was therefore unwarranted. The order quashing cognizance was set aside and the complaint restored for continuation of proceedings.




                          Issues: Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 filed in the name of a company through its authorised employee was maintainable, and whether the High Court was justified in quashing the order taking cognizance on the ground of want of authorisation and absence of averment of knowledge.

                          Analysis: The complaint was filed in the name of the payee company through its General Manager, who was shown by the complaint, verifying affidavit, supporting documents, and authorisation papers to have been authorised to institute proceedings. The material on record also showed that he had participated in the underlying transaction as a witness, had signed the reconciliation statement, had issued the dishonour notices, and thus had knowledge of the transaction. The legal position governing complaints under Sections 138 and 142 of the Negotiable Instruments Act, 1881 permits a company to act through an authorised representative, and the requirement is satisfied where the complaint is in the name of the payee and the representative's authority and knowledge are prima facie disclosed. Questions regarding the adequacy of authorisation or detailed proof of knowledge are matters for trial and do not ordinarily justify quashing at the threshold under Section 482 of the Code of Criminal Procedure, 1973.

                          Conclusion: The complaint was maintainable, and the High Court was not justified in quashing the cognizance order. The challenge to the complaint failed, and the appellant succeeded.

                          Final Conclusion: The order of quashing was set aside and the criminal complaint was restored for continuation of proceedings, with the appeal allowed.

                          Ratio Decidendi: In a cheque dishonour complaint filed in the name of a company, prima facie disclosure of authorisation and of the representative's knowledge of the transaction is sufficient for cognizance, and disputes on authority or knowledge should ordinarily be tested at trial rather than by quashing proceedings at the threshold.


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                          ActsIncome Tax
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