Power of Attorney authority alone insufficient to prosecute for a company; Board delegation by resolution is required.

Power of Attorney executed by a chairman alone cannot confer competent authority to present or prosecute a criminal complaint on behalf of a public company where the Articles or law vest such power in the Board; delegation by the Board through a specific resolution or express authorization in the Articles is required, and absence of such delegation vitiates the prosecution. Defects in authority may be cured by subsequent ratification, but such ratification must be placed on record when the issue is contested. The rule governs prosecution under the Negotiable Instruments Act in the corporate context and follows Companies Act/Articles governance principles.

---

---

Issues: (i) Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 filed on behalf of a public limited company could be presented and prosecuted by a holder of a Power of Attorney appointed by the Chairman of the Board of Directors; (ii) Whether it was necessary that the Board of Directors specifically authorize the execution of such a Power of Attorney by a resolution.

Issue (i): Whether a Power of Attorney holder appointed by the Chairman can present and prosecute a complaint under Section 138 of the Negotiable Instruments Act, 1881 on behalf of a company.

Analysis: The Court reviewed precedent establishing that any natural person may set criminal law in motion but acknowledged that where a special statute prescribes eligibility criteria (here Section 142 of the Negotiable Instruments Act, 1881 requiring the payee or holder in due course), the complainant must satisfy that criterion. A company, being an incorporeal person, must act through a natural person who is duly authorized. The Court examined the Articles of Association and statutory principles (including principles in decisions such as MMTC Ltd. v. Medchl and related authorities) and concluded that delegation of the power to institute or prosecute proceedings by the company's governing body (the Board of Directors) cannot be presumed; formal delegation by the Board is required where the Articles or law vest such powers in the Board.

Conclusion: The complaint prosecuted by a Power of Attorney holder appointed solely by the Chairman, without valid delegation by the Board of Directors, did not establish competent authority to present and prosecute the complaint; the proceedings were vitiated for want of such authority.

Issue (ii): Whether a specific resolution of the Board of Directors authorizing execution of the Power of Attorney was necessary.

Analysis: The Court analysed the Companies Act, 1956 framework and the company's Articles of Association, noting that powers to sue or defend on behalf of the company are vested in the Board and that delegation of those powers ordinarily requires a Board resolution. The Court held that a letter of authorization or a Power of Attorney executed by the Chairman alone, absent a prior Board resolution delegating the power, is insufficient to validate prosecution of criminal proceedings on behalf of the company. The Court further observed that defects in authority could be cured by subsequent ratification, but such ratification ought to have been placed on record when the issue was raised before the courts below and was not done here.

Conclusion: A specific Board of Directors resolution delegating authority to institute and prosecute proceedings was necessary; in the absence of such a resolution the Power of Attorney executed by the Chairman did not suffice.

Final Conclusion: The proceedings instituted and prosecuted by the Power of Attorney holder without a Board resolution delegating authority were invalid; the conviction was set aside and the accused were acquitted, and any fine paid shall be refunded.

Ratio Decidendi: Where a company's Articles or law vest powers to institute or prosecute proceedings in the Board of Directors, valid prosecution on behalf of the company requires either authorization under the Articles or a specific resolution of the Board delegating that authority; a Power of Attorney executed by the Chairman alone, without such delegation, does not confer competent authority to prosecute criminal complaints.

---