TaxTMI 
TaxTMI 
2021 (11) TMI 457
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....he beneficiary under Section 138(b) of the Negotiable Instruments Act, 1881 (hereinafter referred to as the 'NI Act') on 26.05.2006. The demand was, however not met within fifteen (15) days of the receipt of the notice nor was any reply sent which resulted in the complaint bearing No.160/SS/07 being filed on 07.07.2006 by Mr. Bhupesh Rathod before the Special Metropolitan Magistrate, Mumbai. The complaint was accompanied by a Board Resolution of the Company dated 17.05.2006 authorising Mr. Bhupesh Rathod to initiate legal action against the respondent on behalf of the Company. On 24.12.2007, the Company filed an affidavit through its Managing Director, i.e., Mr. Bhupesh Rathod, stating that it had authorised him through the abovementioned Board Resolution to file a complaint case against the respondent. 2. In view of the fact that much turns on the manner of description of the complainant, we reproduce the description of the complainant as under: "Mr. Bhupesh M. Rathod Managing Director of M/s. Bell Marshall Telesystems Ltd. Aged: 41 years, Occupation: Business Having address at 1107, V Maker Chamber, Nariman Point M....
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....at the complaint had been filed by a payee or holder in due course as mandated under Section 142(a) of the NI Act; (b) the payee was the Company and a perusal of the complaint did not show that the complaint was filed by the Company. It had been filed by the appellant who had described himself as the Managing Director of the Company only in the cause title of the complaint; (c) probably a conscious choice was made to not file the complaint in the name of the Company as it was unclear whether the Company was authorised to advance loans. 9. We may note that the High Court did not give its imprimatur to the entire reasoning of the trial court as it noticed that the demand notice was sent on behalf of the Company. Thus, the Company was aware that the complaint had to be filed by the Company itself. It was observed that the aforesaid aspect was probably left vague on purpose by the Company and therefore, it was opined that the complaint had not been filed by the payee in terms of Section 142 of the NI Act. Complainant's/Appellant's submissions: 10. The appellant contended before us that it was quite apparent from the cause title of the complaint which is an in....
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....ishonour of cheque for insufficiency, etc., of funds in the account. - Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless-- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the ....
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.... signatures on the cheques, it was for the respondent to show in what circumstances the cheques had been issued, i.e., why was it not a cheque issued in due course. The words of Section 139 of the NI Act are quite clear that unless the contrary is proved, it shall be presumed that the holder of the cheque received the cheque of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability. The respondent has not set up a case that the nature of transaction was of the nature which fell beyond the scope of Section 138. Other than taking a technical objection, really nothing has been said on the substantive aspect. 18. The only eligibility criteria prescribed under Section 142(1)(a) is that the complaint must be by the payee or the holder in due course. 19. In the conspectus of the aforesaid principles we have to deal with the plea of the respondent that the complaint was not filed by the competent complainant as it is the case that the loan was advanced by the Company. As to what would be the governing principles in respect of a corporate entity which seeks to file the complaint, an elucidation can be found in the judgment of this ....
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....ew to take to defeat the complaint merely because the body of the complaint does not elaborate upon the authorisation. The artificial person being the Company had to act through a person/official, which logically would include the Chairman or Managing Director. Only the existence of authorisation could be verified. 24. While we turn to the authorisation in the present case, it was a copy and, thus, does not have to be signed by the Board Members, as that would form a part of the minutes of the Board meeting and not a true copy of the authorisation. We also feel that it has been wrongly concluded that the Managing Director was not authorised. If we peruse the authorisation in the form of a certified copy of the Resolution, it states that legal action has to be taken against the respondent for dishonour of cheques issued by him to discharge his liabilities to the Company. To this effect, Mr. Bhupesh Rathod/Sashikant Ganekar were authorised to appoint advocates, issues notices through advocate, file complaint, verifications on oath, appoint Constituent attorney to file complaint in the court and attend all such affairs which may be needed in the process of legal actions. What more ....