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        Case ID :

        2026 (2) TMI 774 - HC - Indian Laws

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        Curable defect in company authorisation for cheque complaint; later board resolution and power of attorney may be accepted. A complaint under the Negotiable Instruments Act by a company is maintainable when filed through an authorised representative with knowledge of the ...
                        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.

                            Curable defect in company authorisation for cheque complaint; later board resolution and power of attorney may be accepted.

                            A complaint under the Negotiable Instruments Act by a company is maintainable when filed through an authorised representative with knowledge of the transaction. An initial defect in authorisation is not fatal if it can be cured later by a valid board resolution and ratification. Permitting additional evidence to place the subsequent resolution and fresh power of attorney on record does not ordinarily amount to impermissible filling up of a lacuna. The accused may challenge the sufficiency of authorisation and knowledge at trial, but such objections do not generally justify quashing at the threshold.




                            Issues: Whether the initial defect in authorisation for filing the complaint under the Negotiable Instruments Act was a curable defect and whether permitting additional evidence to place the Board resolution and fresh power of attorney on record amounted to impermissible filling up of lacunae.

                            Analysis: A company can act only through a natural person, and a complaint by a juristic entity is maintainable when it is filed in the name of the payee company through an authorised representative having knowledge of the transaction. If the initial authorisation is defective or incomplete, the defect is not necessarily fatal where it can be subsequently cured by a proper board resolution and ratification. The accused may contest the sufficiency of authorisation and knowledge during trial, but such dispute does not ordinarily justify quashing at the threshold. Allowing additional evidence to bring on record the subsequent resolution and power of attorney, in these circumstances, does not amount to filling up a prohibited lacuna.

                            Conclusion: The initial defect in authorisation was curable, the additional evidence was rightly permitted, and the petition for quashing was not maintainable.


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                            ActsIncome Tax
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