M/s TRL Krosaki Refractories Ltd. vs M/s SMS Asia Private Limited

M/s TRL Krosaki Refractories Ltd. vs M/s SMS Asia Private Limited

       (Arising out of SLP (Crl.) No.3113 of 2018)
M/s TRL Krosaki Refractories Ltd.             .… Appellant(s)   
M/s SMS Asia Private Limited & Anr.          …. Respondent(s)
A.S. Bopanna,J.
1. Leave granted. 
2. The   appellant   is   assailing   the   judgment   dated
14.12.2017 passed by the High Court of Orissa at Cuttack in
CRLMC No.1210 of 2017. Through the said judgment, the High
Court while disposing of the petition has quashed the order
dated 05.11.2015 passed by the learned SDJM, Jharsuguda by
which   cognizance   was   taken   and   summons   was   issued   in
I.C.C.   Case   No.422   of   2015.   The   appellant   who   is   the
complainant in I.C.C. Case No.422 of 2015 is therefore before
this Court, claiming to be aggrieved by the said judgment.
3. The   brief   facts   are   that   the   respondent   herein   had
issued seven cheques dated 13.03.2015, in all amounting to
Rs.1,10,00,000/­ (Rupees one crore ten lakhs) in favour of the
appellant company. On presentation, the said cheques were
dishonoured by the Bank and returned with the endorsement,
‘account   closed’.   The   appellant   in   that   view   issued   notices
dated 14.04.2015 through registered post, acknowledgement
due. Though the notices were received on 16.04.2015 as per
the postal acknowledgement, the respondent failed to comply
with the demand or respond to the same. In that view, the
appellant   filed   the   complaint   before   the   learned
Sub­Divisional Judicial Magistrate, (‘SDJM’ for short) Panposh,
Uditnagar Rourkela under Section 138 and 142 of Negotiable
Instruments Act, 1881 (for short ‘N.I. Act’). The said complaint
was registered based on the affidavit filed on behalf of the
complainant,   in   lieu   of   oral   sworn   statement.   The   learned
SDJM on being satisfied that there is sufficient material and
the   complaint   under   Section   138   of   N.I.   Act   against   the
accused   is   in   accordance   with   law,   took   cognizance   of   the
complaint and directed summons to the respondent­accused,
vide order dated 05.11.2015.
4. The   respondent   herein   however   filed   a   petition   in
CRLMC No.1210 of 2017 under Section 482 of the Criminal
Procedure   Code   (for   short   ‘Cr.P.C.)   before   the   High   Court
claiming to be aggrieved by the order dated 05.11.2015. The
respondent,   in   the   said   petition   had   contended   that   the
complaint   filed   was   by   an   incompetent   person   without   the
requisite   averments   in   the   complaint,   despite   which   the
learned SDJM had taken cognizance and issued summons. In
that regard, it was contended that Mr. Subhasis Kumar Das,
General   Manager   (Accounting)   who   had   filed   the   complaint
representing the complainant company, neither had knowledge
about the alleged transaction, nor had he witnessed the same.
In that light, the respondent had contended that the order
taking cognizance and the summons issued to them, is liable to
be quashed. The High Court, accepting the said contention and
placing   reliance   on   the   judgment   of   this   Court   in  A.C.
Narayanan vs. State of Maharashtra & Anr. (2014) 11 SCC
790 has held that there is no mention in the complaint or
affidavit as to when and in what manner the company had
authorized its General Manager (Accounting) to represent the
company to file the complaint. It is further held that there is no
averment in the complaint as to whether the General Manager
(Accounting) had knowledge about the transaction or he was a
witness   to   the   transaction.   It   was   also   held,   neither   any
resolution   of   the   Board   of   Directors   of   the   complainant
company nor any authorisation of the company in favour of the
person representing it in the complaint was filed for perusal of
the   Magistrate.   Only   an   authorisation   letter   issued   by   the
Managing Director of the complainant company in favour of the
General   Manager   (Accounting)   was   produced   and   the   said
authorisation does not indicate whether the Board of Directors
had   authorised   the   Managing   Director   to   sub­delegate   his
powers   to   the   General   Manager   (Accounting)   to   file   the
complaint on behalf of the company.
5. Mr. Ashok K. Parija, learned senior counsel appearing
on behalf of the appellant while assailing the judgment passed
by the High Court, would contend that the High Court has
utterly   misconstrued   the   principle   enunciated   in  A.C.
Narayanan  (supra) to non­suit the appellant. It is contended
that in the said decision, while considering the nature of the
complaint filed based on the power of attorney executed by one
individual in favour of another individual to conduct the case,
the requirement therein has been stated. Even in that context
the High Court has not properly appreciated the facts involved
in   the   instant   case   since   the   complaint   was   as   per   the
observations made in A.C. Narayanan (supra). It is contended
that the order passed by the learned SDJM dated 05.11.2015
taking cognizance would indicate that the learned Magistrate
having   perused   the   complaint   and   the   entire   record,   was
satisfied   that   there   is   sufficient   material   for   issuance   of
summons. In that background, the list of documents and the
documents are referred to.  The agreement dated 18.07.2014,
entered   into   between   the   appellant   and   respondent   would
disclose   that   Mr.   Subhasis   Kumar   Das,   General   Manager
(Accounting)   who   had   represented   the   company   in   the
complaint, was a witness to the said agreement. He had also
signed the reconciliation statement and has despatched the
notice to the respondent when the cheques were dishonoured.
In that view, the company was represented by a competent
person who had knowledge of the transaction. The verifying
affidavit enclosed with the complaint also specified that he had
knowledge and that the complaint was based on the relevant
documents. In addition, the said Mr. Subhasis Kumar Das,
General Manager (Accounting) in the affidavit filed as his sworn
statement,   had   explicitly   stated   that   he   is   the   authorized
representative of the complainant company and has filed the
complaint against the accused persons. Learned senior counsel
would also point out that in addition to the fact that he was a
Senior   Managerial   Officer   of   the   appellant   company,   Mr.
Subhasis Kumar Das was also authorized by the Managing
Director on 23.05.2015, to initiate the legal proceedings. The
Managing Director on the other hand, was authorized by the
Chairman based on the approval of the Board of Directors. In
that   view,   it   is   contended   that   the   complaint   was   filed   in
accordance with law and the learned Magistrate having applied
his mind, had taken cognizance which was quashed by the
High Court without appropriately applying its mind.
6. Mr. Santosh Kumar, learned counsel for the respondent
would however, seek to sustain the judgment passed by the
High Court. It is contended that the High Court having noted
the   judgment   in  A.C.   Narayanan  (supra)   and   also   the
judgments   of   the   Orissa   High   Court   had   arrived   at   the
conclusion   that   the   complaint   filed   did   not   satisfy   the
requirement of Section 142 of N.I. Act as the complaint was not
filed by a person who was authorized by the company. It is
further contended that in A.C. Narayanan  (supra) this Court
has held that there should be explicit averment to the effect
that   the   person   filing   the   complaint   is   authorized   by   the
complainant and has knowledge of the transaction in question
so as to maintain the complaint. It is contended that since the
High   Court   has   arrived   at   its   conclusion   by   relying   on   a
decision rendered by this Court, such a decision would not call
for interference in this appeal.
7.       Having   noted   the   sequence   of   events   and   the   rival
contentions put forth by the learned counsel for the parties,
the solitary issue for consideration herein is as to whether the
complaint filed by the appellant herein under Section 138 of
N.I. Act is in accordance with the requirement under Section
142 of the N.I. Act. The relevant provision reads as hereunder:
“142. Cognizance of offences.—[(1)] Notwithstanding 
anything contained in the Code of Criminal Procedure,
1973 (2 of 1974),—
(a) no court shall take cognizance of any offence
punishable under section 138 except upon a
complaint, in writing, made by the payee or, 
as the case may be, the holder in due course
of the cheque;
(b)  xxxxxxxxxx
(c)  xxxxxxxxxx”
8. In   that   background,   a   perusal   of   the   complaint
(Annexure P­14) would disclose that the complainant named
therein is M/s. TRL Krosaki Refractories Limited through its
General Manager (Accounting) Subhasis Kumar Das. A perusal
of the cheques (Annexures P­3 to P­9) which are the subject
matter of the said complaint under Section 138 of NI Act would
disclose that the “payee” named in the said cheques is M/s.
TRL Krosaki Refractories Limited. If that be the position, the
requirement as contemplated under Section 142 (1) (a) of NI
Act that the complaint ought to be in writing and that it should
be   filed   by   the   payee   or   the   holder   in   due   course,   stands
satisfied. The issue raised is that the complaint filed by Mr.
Subhasis Kumar Das, General Manager (Accounting) on behalf
of the company is not competent for want of authorisation and
that there is no averment with regard to his knowledge about
the transaction. On this aspect, strong reliance is placed by the
learned   counsel   for   the   respondents   on  A.C.   Narayanan
(supra). Further, the judgment passed by the High Court is
also entirely based on the guidelines laid down in the said
9.To place the matter in perspective, it would be necessary for
us   to   take   note   of   the   circumstances   under   which   the
consideration arose in A.C. Narayanan (supra). In that regard,
it is noticed that this Court while considering the scope of
Section 142 (1)(a) of N.I. Act in the case of M/s. M.M.T.C. Ltd.
vs.  Medchi  Chemicals  and  Pharma  (P}  Ltd.,  (2002) 1 SCC
234, had taken note of an earlier decision of this Court in
Vishwa Mitter vs. O.P. Poddar, (1983) 4 SCC 701 wherein it
was held that anyone can set the criminal law in motion by
filing a complaint of facts constituting an offence, before a
Magistrate entitled to take cognizance. It was further held in
Vishwa  Mitter  (supra) that if any special statute prescribes
offences and makes any special provision for taking cognizance
of   such   offences   under   the   statute,   then the   complaint
requesting the Magistrate to  take cognizance of the offence
must satisfy the eligibility criterion prescribed by such statute.
In   that   circumstance,   it   was   held   that   the   only   eligibility
criteria   prescribed   by   Section   142   of   N.I.   Act   is   that   the
complainant must be by the payee or the holder in due course.
However,   in   a   subsequent   decision   in  Janaki   Vashdeo
Bhojwani  &  Anr.  vs.   Indusind  Bank  Ltd.  & Ors.  (2005) 2
SCC 217, while considering the right of a power of attorney
holder to act on behalf of the principal in a civil proceeding, the
provision contained in Order III Rule 1 and 2 of CPC was kept
in view and it was held that if the power of attorney holder has
rendered some acts in pursuance of the power of attorney, he
may depose for the principal in respect of such acts, but he
cannot   depose   for   the   principal   for   the   acts   done   by   the
principal and not by him. Similarly, he cannot depose for the
principal in respect of the matter of which only the principal is
entitled to be cross­examined. The said two decisions which
were rendered by Division Benches were assumed to be in
conflict   with   each   other   by   another   Division   Bench   while
considering  A.C.  Narayanan  (supra) and therefore it desired
10. In that view, the matter in A.C. Narayanan (supra) was
referred to a Bench of three Hon’ble Judges. The said Bench
after holding that the said two judgments of this Court are not
in   conflict   with   each   other   has   considered   the   scope   and
requirement of Section 142 (1)(a) of N.I. Act and formulated the
questions for  consideration  as contained  in para 21 of  the
judgment which read as hereunder: ­
“21. In terms of the reference order, the following 
questions have to be decided by this Bench:
21.1. Whether a power­of­attorney holder can sign and
file a complaint petition on behalf of the 
complainant? /Whether the eligibility criteria 
prescribed by Section 142(a) of the NI Act would stand 
satisfied if the complaint petition itself is filed in the 
name of the payee or the holder in due course of the 
21.2. Whether a power­of­attorney holder can be 
verified on oath under Section 200 of the Code?
21.3. Whether specific averments as to the knowledge 
of the power­of­attorney holder in the impugned 
transaction must be explicitly asserted in the 
21.4. If the power­of­attorney holder fails to assert 
explicitly his knowledge in the complaint then can the 
power­of­attorney holder verify the complaint on oath 
on such presumption of knowledge?
21.5. Whether the proceedings contemplated under 
Section 200 of the Code can be dispensed with in the 
light of Section 145 of the NI Act which was introduced
by an amendment in the year 2002?”
The consideration made in paras 29 to 30 would be relevant to be 
noted, which read as hereunder: ­ 
“29. From a conjoint reading of Sections 138, 142 and
145 of the NI Act as well as Section 200 of the Code, it
is  clear that it  is open  to the  Magistrate  to  issue
process   on   the   basis   of   the   contents   of   the
complaint,  documents   in  support  thereof  and  the
affidavit submitted by the complainant in support
of   the   complaint.  Once   the   complainant   files   an
affidavit in support of the complaint before issuance of
the   process   under   Section   200   of   the   Code,   it   is
thereafter open to the Magistrate, if he thinks fit, to
call upon the complainant to remain present and to
examine him as to the facts contained in the affidavit
submitted   by   the   complainant   in   support   of   his
complaint. However, it is a matter of discretion and the
Magistrate is not bound to call upon the complainant
to remain present before the court and to examine him
upon oath for taking decision whether or not to issue
process on the complaint under Section 138 of the NI
Act. For the purpose of issuing process under Section
200 of the Code, it is open to the Magistrate to rely
upon the verification in the form of affidavit filed by
the complainant in support of the complaint under
Section 138 of the NI Act. It is only if and where the
Magistrate,  after  considering  the  complaint  under
Section 138 of the NI Act, documents produced in
support thereof and the verification in the form of
affidavit   of   the   complainant,   is   of   the   view   that
examination of the complainant or his witness(s) is
required,   the   Magistrate   may   call   upon   the
complainant   to   remain   present   before   the   court
and   examine  the   complainant   and/or  his  witness
upon oath for taking a decision whether or not to
issue process on the complaint under Section 138
of the NI Act.
30. In the light of the discussion, we are of the view
that the power­of­attorney holder may be allowed to
file, appear and depose for the purpose of issue of
process for the offence punishable under Section 138
of the NI Act. An exception to the above is when the
power­of­attorney holder of the complainant does not
have   a   personal   knowledge   about   the   transactions
then he cannot  be examined.  However,   where   the
attorney holder of the complainant is in charge of
the   business   of   the   complainant   payee   and   the
attorney   holder   alone   is   personally   aware   of   the
transactions, there is no reason why the attorney
holder   cannot  depose   as   a   witness.   Nevertheless,
an   explicit   assertion   as   to   the   knowledge   of   the
power­of­attorney  holder  about  the  transaction   in
question  must   be   specified   in   the   complaint.  On
this   count,   the   fourth   question   becomes
The   answer   to   the   question   raised   for   consideration   is
contained in para 33 which read as hereunder: ­
33. While   holding   that   there   is   no   serious   conflict
between   the   decisions   in M.M.T.C.   and Vashdeo
Bhojwani,   we   clarify   the   position   and   answer   the
questions in the following manner:
33.1. Filing   of   complaint   petition   under   Section
138   of   the   NI   Act   through   power   of   attorney   is
perfectly legal and competent.
33.2. The power­of­attorney holder can depose and
verify  on  oath  before  the  court   in  order  to  prove
the contents of the complaint. However, the powerof­attorney   holder   must   have   witnessed   the
transaction as an agent of the payee/holder in due
course or possess due knowledge regarding the said
33.3. It   is   required   by   the   complainant   to   make
specific   assertion   as   to   the   knowledge   of   the
power­of­attorney   holder   in   the   said   transaction
explicitly   in   the   complaint   and   the   power­ofattorney  holder  who  has  no   knowledge   regarding
the transactions cannot be examined as a witness
in the case.
33.4. In the light of Section 145 of the NI Act, it is
open to the Magistrate to rely upon the verification in
the   form   of   affidavit   filed   by   the   complainant   in
support of the complaint under Section 138 of the NI
Act and the Magistrate is neither mandatorily obliged
to call upon the complainant to remain present before
the   Court,   nor   to   examine   the   complainant   of   his
witness upon oath for taking the decision whether or
not to issue process on the complaint under Section
138 of the NI Act.
33.5. The   functions   under   the   general   power   of
attorney   cannot   be   delegated   to   another   person
without   specific   clause   permitting   the   same   in   the
power of attorney. Nevertheless, the general power of
attorney   itself   can   be   cancelled   and   be   given   to
another person.”
                  (Emphasis supplied)
11. A cumulative perusal of the facts of the instant case
would   indicate   that   the   requirement   as   indicated   in  A.C.
Narayanan,   (supra)   are   in   fact   satisfied.   Firstly,   as   noted
above, the complaint was filed in the name of the company i.e.,
“the   payee”,   through   Mr.   Subhasis   Kumar   Das,   General
Manager (Accounting). The authorisation dated 23.05.2015 by
the Managing Director in his favour (Annexure P­17) discloses
that Mr. Priyabrata Panda, Managing Director of the appellant
company had authorised Mr. Subhasis Kumar Das, General
Manager   (Accounting)   to   institute   criminal   proceedings,
including proceedings under the provisions of the N.I. Act and
civil proceedings on behalf of the company against M/s. SMS
Asia Private Limited (respondent), to represent the company
and take all necessary actions in the matter in learned SDJM’s
Court. The specimen signature of Mr. Subhasis Kumar Das has
also been attested by the Managing Director. The Managing
Director apart from himself being the key managerial personnel
of the appellant company, has also been delegated the power
by   the   Board   of   Directors   through   the   document   dated
06.04.1998 (Annexure P­16). Through the said document the
Managing Director has been delegated, in general, all powers
necessary for the management and operation of the company
and it has been specified among others, to exercise the power
relating to important issues affecting the company’s land and
property. Through the said document, the Managing Director is
also empowered to delegate where necessary and to the extent
required,   any   of   the   powers   delegated   to   him,   to   his
subordinate   officers.   The   above   noted   documents   would
disclose that the complaint under Section 138 NI Act was filed
on behalf of the “payee” company with due authorisation.
12. The next aspect on which the High Court has interfered
is on accepting the contention that there is no averment in the
complaint as to whether the General Manager (Accounting) had
any knowledge about the transaction or he was a witness to
the   transaction.   On   the   said   aspect   it   is   noted   that   the
transaction  between  the  parties  is based  on  the  agreement
dated 18.07.2014 (Annexure P­1). The said document depicts,
below   the   signature   of   the   executives   representing   the
appellant and the respondent company, a witness each from
either side have appended their signatures. The witness on
behalf   of   the   appellant   company   is   none   other   than   Mr.
Subhasis Kumar Das who was at that point in time, designated
as General Manager (Commercial). Further, the document for
reconciliation of account spanning the period from 01.04.2011
to 30.09.2014, as carried out on 28.10.2014, depicts that the
same   was   attested   by   the   representatives   of   both   the
companies.   The   appellant   company   is   represented   by   Mr.
Subhasis   Kumar   Das.   That   apart,   when   the   cheques   were
dishonoured,   it   was   Mr.   Subhasis   Kumar   Das,   General
Manager (Accounting) who had issued the notices (Annexure P11,   12­13)   on   behalf   of   the   appellant   company,   to   the
respondent company. The said documents would indicate that
the person who had knowledge of the transaction and was
witness   to   it,   has   been   authorized   and   has   instituted   the
complaint on behalf of the company.
13. Apart   from   the   factual   aspects   as   stated   in   the
complaint, relating to the transaction, the complaint as also
the   affidavit   supporting   the   complaint   contain   averments
regarding authorization in favour of and knowledge on the part
of Mr. Subhasis Kumar Das, which read as hereunder: ­
“That, the complainant Company incorporated under
the companies Act 1956 and having registered office
At/PO/PS­Belpahar,   Dist.­Jharsuguda,   (Odisha)
represent   through   its   General   Manager
(Accounting), Shri Subhasis Kumar Das,  aged about
47   years,   S/O   Shri   Gopal   Chandra   Das  and   also
authorize by the Company to file this complaint.”
The verifying affidavit reads as hereunder:­
“I,  Sri.  Subhasis  Kumar  Das,  aged about 47 years,
S/o.   Gopal   Chandra   Das  General   Manager
(Accounting)   of   M/s.   TRL   Krosaki   Refractories
Limited,  At / PO /PS­ Belpahar, Dist.­Jharsuguda
(Odhisa),   do   hereby   solemnly   affirm   and   state   as
1. That, I am the General Manager (Accounting)
of   M/s.   TRL   Krosaki   Refractories   Limited,
At   /   PO   /   PS­   Belpahar,   Dist.­Jharsuguda
(Odisha) and competent to file this complaint
2. That, facts stated above in this complaint   
petition from Para : 1 to 13 are true to the   
best of my knowledge, belief and basing on 
the relevant documents.”
In   addition,   the   affidavit   filed   in   lieu   of   the   oral   sworn
statement before the learned SDJM to enable cognizance to be
taken contains the averment as follows: ­
“That   I   am   the   authorized   representative   of   the
complainant   Company  incorporated   under   the
companies   Act   1956   and   having   registered   office
At/PO/PS­ Belpahar, Dist. Jharsuguda (Odisha)  has
filed   this   complaint   petition   against   the   accused
      (Emphasis supplied)
14. A meaningful reading of the above would indicate that
the   company   having   authorized   the   General   Manager
(Accounting)   and   the   General   Manager   (Accounting)   having
personal knowledge had in fact been clearly averred. What can
be   treated   as   an   explicit   averment,   cannot   be   put   in   a
straitjacket but will have to be gathered from the circumstance
and the manner in which it has been averred and conveyed,
based   on   the   facts   of   each   case.   The   manner   in   which   a
complaint is drafted may vary from case to case and would also
depend on the skills of the person drafting the same which by
itself,   cannot   defeat   a   substantive   right.   However,   what   is
necessary to be taken note of is as to whether the contents as
available in the pleading would convey the meaning to the
effect that the person who has filed the complaint, is stated to
be authorized and claims to have knowledge of the same. In
addition, the supporting documents which were available on
the   record   by   themselves   demonstrate   the   fact   that   an
authorized   person,   being   a   witness   to   the   transaction   and
having knowledge of the case had instituted the complaint on
behalf of the “payee” company and therefore, the requirement
of Section 142 of N.I. Act was satisfied. In Vinita S. Rao vs.
Essen Corporate Services (P) Ltd. (2015) 1 SCC 527, to which
one   of   us   (Hon’ble   CJI)   was   a   member   of   the   Bench   has
accepted the pleading of such a nature to indicate the power to
prosecute the complaint and knowledge of the transaction as
sufficient to maintain the complaint.
15. Despite our conclusion that the documents available on
record   would   on   facts   satisfy   the   requirement   relating   to
delegation of power and also knowledge of the transaction by
the person representing the Company in the instant case, it is
also necessary for us to keep in perspective that though the
case in A.C. Narayanan (supra) has taken the center stage of
consideration,   the   facts   involved   therein   were   in   the
background of the complainant being an individual and the
complaint filed was based on the power of attorney issued by
the “payee” who was also an individual. In such an event, the
manner in which the power was being exercised was to be
explicitly   stated   so   as   to   establish   the   right   of   the   person
prosecuting   the   complaint,   to   represent   the   payee   i.e.,   the
complainant.   The   position   that   would   emerge   when   the
complainant is a company or a corporate entity will have to be
viewed from a different standpoint. In this regard in  Samrat
Shipping Co. Pvt. Ltd. Vs. Dolly George  (2002) 9 SCC 455,
while   disapproving   the   manner   in   which   cognizance   was
refused to be taken and the complaint had been dismissed by
the learned Magistrate at the threshold, this Court has held as
“3. Having heard both sides we find it difficult to
support the orders challenged before us. A company
can file a complaint only through human agency.
The person who presented the complaint on behalf
of the Company claimed that he is the authorized
representative   of   the   company.  Prima­facie,   the
trial   court   should   have   accepted   it   at   the   time
when a complaint was presented. If it is a matter
of   evidence   when   the   accused   disputed   the
authority   of   the   said   individual   to   present   the
complaint, opportunity should have been given to
the   complainant   to   prove   the   same,   but   that
opportunity   need   be   given   only   when   the   trial
commences.  The dismissal of the complaint at the
threshold on the premise that the individual has not
produced certified copy of the resolution appears to be
too   hasty   an   action.   We,   therefore,   set   aside   the
impugned orders and direct the trial court to proceed
with the trial and dispose of it in accordance with law.
Parties are directed to appear before the trial court on
 (Emphasis supplied)
16. Further, in  National   Small   Industries   Corporation
Ltd. Vs. State (NCT of Delhi) and Ors. (2009) 1 SCC 407, this
Court though was essentially considering the issue relating to
the exemption available against examining a public servant
keeping in view the scope under Section 200 (a) of Cr.PC, has
exhaustively   considered   the   validity   of   a   complaint   under
Section 138 of N.I. Act and the satisfaction of the requirement
under Section 142 thereof. In the said context this Court has
held as hereunder: ­
“14. The term “complainant” is not defined under the
Code. Section 142 of the NI Act requires a complaint
under Section 138 of that Act to be made by the payee
(or by the holder in due course). It is thus evident that
in   a   complaint   relating   to   dishonour   of   a   cheque
(which has not been endorsed by the payee in favour
of   anyone),   it   is   the   payee   alone   who   can   be   the
complainant. The NI Act only provides that dishonour
of a cheque would be an offence and the manner of
taking   cognizance   of   offences   punishable   under
Section   138   of   that   Act.   However,   the   procedure
relating to initiation of proceedings, trial and disposal
of such complaints, is governed by the Code. Section
200 of the Code requires that the Magistrate, on taking
cognizance of an offence on complaint, shall examine
upon oath the complainant and the witnesses present
and   the   substance   of   such   examination   shall   be
reduced   to   writing   and   shall   be   signed   by   the
complainant and the witnesses.  The  requirement of
Section 142 of the NI Act that the payee should be
the complainant, is met if the complaint is in the
name   of   the   payee.   If   the   payee   is   a   company,
necessarily   the   complaint   should   be   filed   in   the
name   of   the   company,   if   a   company   is   the
complainant. A company can be represented by an
employee   or   even   by   a   non­employee   authorized
and empowered to represent the company either by
a resolution or by a power of attorney.
16. Section 142 only requires that the complaint
should   be   in   the   name   of   the   payee.  Where   the
complainant is a company, who will represent the
company and how the company will be represented
in  such  proceedings, is not governed by the Code
but   by   the   relevant   law   relating   to   companies.
Section  200  of  the  Code  mandatorily  requires  an
examination   of   the   complainant;   and   where   the
complainant is an incorporeal body, evidently only
an employee or representative can be examined on
its behalf, As a result, the company becomes a  de
jure  complainant   and   its   employee   or   other
representative,   representing   it   in   the   criminal
proceedings,   becomes   the  de   facto  complainant.
Thus in every complaint, where the complainant is
an   incorporeal  body,   there   is  a   complainant   –  de
jure,  and  a  complainant­de  facto.  Clause (a) of the
proviso   to   Section   200   provides   that   where   the
complainant   is   a   public   servant,   it   will   not   be
necessary   to   examine   the   complainant   and   his
witnesses. Where the complainant is an incorporeal
body   represented   by   one   of   its   employees,   the
employee   who   is   a   public   servant   is   the  de   facto
complainant   and   in   signing   and   presenting   the
complaint,   he   acts   in   the   discharge   of   his   official
duties. Therefore, it follows that in such cases, the
exemption   under   clause   (a)   of   the   first   proviso   to
Section 200 of the Code will be available.
19.  Resultantly, when  in  a  complaint  in  regard to
dishonour of a cheque issued in favor of a company
or  corporation,   for  the  purpose  of  Section  142  of
the NI Act, the  company will be the complainant,
and   for  purposes  of  Section  200  of  the  Code,   its
employee   who   represents   the   company   or
corporation,  will  be   the  de   facto  complainant.   In
such   a   complaint,   the  de   jure  complainant,
namely,   the   company   or   corporation   will   remain
the same but the de facto complainant (employee)
representing such de jure complainant can change,
from time to time. And if the de facto complainant is
a public servant, the benefit of exemption under clause
(a) of the proviso to Section 200 of the Code will be
available, even though the complaint is made in the
name of a company or corporation.”
(emphasis supplied)
17. In that view, the position that would emerge is that
when a company is the payee of the cheque based on which a
complaint   is   filed   under   Section   138   of   N.I.   Act,   the
complainant necessarily should be the Company which would
be represented by an employee who is authorized. Prima­facie,
in such a situation the indication in the complaint and the
sworn statement (either orally or by affidavit) to the effect that
the complainant (Company) is represented by an authorized
person   who   has   knowledge,   would   be   sufficient.   The
employment   of   the   terms  “specific   assertion   as   to   the
knowledge of the power of attorney holder” and such assertion
about knowledge should be  “said explicitly”  as stated in  A.C.
Narayanan  (supra) cannot be understood to mean that the
assertion should be in any particular manner, much less only
in the manner understood by the accused in the case. All that
is necessary is to demonstrate before the learned Magistrate
that the complaint filed is in the name of the “payee” and if the
person who is prosecuting the complaint is different from the
payee, the authorisation therefor and that the contents of the
complaint   are   within   his   knowledge.   When,   the
complainant/payee is a company, an authorized employee can
represent   the   company.   Such   averment   and  prima   facie
material   is   sufficient   for   the   learned   Magistrate   to   take
cognizance and issue process. If at all, there is any serious
dispute with regard to the person prosecuting the complaint
not being authorized or if it is to be demonstrated that the
person   who   filed   the   complaint   has   no   knowledge   of   the
transaction and, as such that person could not have instituted
and prosecuted the complaint, it would be open for the accused
to   dispute   the   position   and   establish   the   same   during   the
course of the trial. As noted in Samrat Shipping Co. Pvt. Ltd.
(supra),   dismissal   of   a   complaint   at   the   threshold   by   the
Magistrate   on   the   question   of   authorisation,   would   not   be
justified.   Similarly,   we   are   of   the   view   that   in   such
circumstances   entertaining   a  petition   under  Section   482   to
quash the order taking cognizance by the Magistrate would be
unjustified   when   the   issue   of   proper   authorisation   and
knowledge can only be an issue for trial. 
18. In that view of the matter, we are of the opinion that the
High Court was not justified in entertaining the petition filed
under  Section   482   of  Cr.PC  and   quashing   the   order  dated
05.11.2015, taking cognizance of the complaint filed by the
        Accordingly, we pass the following order;
(i) The judgment dated 14.12.2017 passed in CRL.
MC. No. 1210 of 2017 by the High Court of Orissa,
Cuttack is set aside.
(ii) The complaint in I.C.C Case No. 422 of 2015 is
restored to the file of SDJM, Jharsuguda with a
direction to list the case on 15.03.2022 as the first
date for appearance of the parties.
(iii)  The respondent who has appeared herein and is
represented by a counsel shall appear on the said
date before the learned Magistrate in continuation
of the proceedings wherein summons had already
been issued, without expecting fresh summons to
be issued.
(iv) Keeping in view the fact that the complaint is of
the year 2015, the same shall be proceeded with
further expeditiously and be concluded in a period
not   later   than   six   months   from   the   first   date
indicated above.
(iv) The   appeal   is   accordingly   allowed   with   cost
quantified   at   Rs.   1,00,000/­   (Rupees   one   lakh
only) payable by the respondent to the appellant.
19. All pending applications, if any, shall stand disposed of.
       (N.V. RAMANA)
       (HIMA KOHLI)
New Delhi;
February 22, 2022

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