Company cheque complaints: prima facie authorisation and director involvement can sustain summoning; disputed resignation issues go to trial.

A company complaint under the Negotiable Instruments Act may be filed in the company's name and pursued through an authorised representative, with prima facie authorisation sufficient at the summoning stage. Allegations that the cheque was issued for the company's transaction, and that a director signed the cheque or was involved in the business deal, can be enough to attract vicarious liability under the Act. Claims that a director had resigned or was not responsible for day-to-day affairs ordinarily raise disputed facts requiring evidence, and are not usually resolved in proceedings to quash at the threshold. The matter turns on prima facie allegations, while authority and liability are left for trial.

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Issues: (i) Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 filed on behalf of a company through an authorised representative was maintainable at the summoning stage; (ii) whether the allegations in the complaint were sufficient to attract vicarious liability of the directors under Section 141 of the Negotiable Instruments Act, 1881; (iii) whether the plea that one director had resigned or that another was not responsible for day-to-day affairs could justify quashing of the proceedings under Section 482 of the Code of Criminal Procedure, 1973.

Issue (i): Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 filed on behalf of a company through an authorised representative was maintainable at the summoning stage.

Analysis: The complaint was instituted in the name of the company and the prosecution was carried on through its authorised signatory. The governing principle is that where the payee is a company, the complaint must be in the name of the company, but it may be represented by an employee or other authorised person. At the stage of taking cognizance and issuing process, prima facie authorisation and the complaint being filed in the name of the payee are sufficient; the question of proof of authority may arise in trial if seriously disputed.

Conclusion: The complaint was maintainable and no ground for quashing was made out on the basis of the mode of institution.

Issue (ii): Whether the allegations in the complaint were sufficient to attract vicarious liability of the directors under Section 141 of the Negotiable Instruments Act, 1881.

Analysis: The complaint and supporting material disclosed that the cheque was issued on behalf of the company, the complainant had supplied goods pursuant to the company's order, and one of the directors had signed the cheque. In prosecutions under Section 141, directors and persons responsible for the conduct of the company's business can be proceeded against when the allegations show their participation or responsibility in the transaction. At the summoning stage, the Magistrate is not required to conduct a mini-trial or resolve disputed questions of fact.

Conclusion: The allegations were sufficient to sustain the summoning order against the directors, including the signatory director.

Issue (iii): Whether the plea that one director had resigned or that another was not responsible for day-to-day affairs could justify quashing of the proceedings under Section 482 of the Code of Criminal Procedure, 1973.

Analysis: The plea regarding resignation and absence of responsibility for day-to-day affairs raised disputed questions that required evidence. Such questions could not be conclusively determined in inherent jurisdiction at the threshold. The allegations suggested possible involvement in the transaction, and whether resignation or lack of operational control absolved liability was a matter for trial.

Conclusion: The plea did not justify quashing of the proceedings under Section 482 of the Code of Criminal Procedure, 1973.

Final Conclusion: The inherent jurisdiction was declined because the complaint disclosed a prima facie case under the Negotiable Instruments Act, and the disputed issues of authority and liability were left to be examined in trial.

Ratio Decidendi: In a company complaint under Section 138 of the Negotiable Instruments Act, prima facie authorisation and allegations showing the director's role in the transaction are enough to sustain process, while disputed questions about authority, knowledge, resignation, or responsibility for day-to-day affairs are ordinarily matters for trial and not for quashing under Section 482 of the Code of Criminal Procedure, 1973.

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