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DR. ANNASAHEB CHOUGULE URBAN CO-OP.BANK LTD., PETH VADGAON V/S SHRI NARAYAN PANDURANG KORGAONKAR & ANOTHER , decided on Wednesday, April 23, 2008.
[ In the High Court of Bombay, Criminal Application No.3776 of 2007 [Leave To Appeal] in Criminal Appeal No. of 2007 . ] 23/04/2008
Judge(s) : V.K. TAHILRAMANI
Advocate(s) : Applicant Sameer Tambekar. R1, Indrajeet Joshi, , V.B. KondeDeshmukh, APP.
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  "2008 ALL MR (CRI) 2511"   ==   "2008 (2) BCR 269 (CRI)"  







judgment - P.C.: 1. The applicant-orig.complainant has filed this application for leave to file appeal against the judgment and order dated 7th September 2007 passed by the learned JMFC Court No.4 Kolhapur in Criminal Case No.3488 of 2003. By the said judgment and order the learned Magistrate acquitted the respondent No.1-orig.accused of the offence punishable under Section 138 of the Negotiable Instruments Act. 2. Heard the learned Counsel for the Applicant-orig.complainant and the learned Counsel for respondent No.1-orig.accused. Perused the judgment and order of the learned Magistrate as well as the evidence which has been produced by the learned Counsel for the applicant. 3. The cheque in question is for the amount of Rs.1 lakh. The learned Magistrate acquitted the respondent No.1-orig.accused on the sole ground that the complainant has not produced any resolution or authority letter to show that he represents the Bank i.e. original complainant. The learned Magistrate held that in the absence of power of attorney or a valid authority or authorization by the Bank in favour of the Manager who has filed the complaint the complaint would not be entertained and no conviction can be passed on such a complaint. 4. In the present case the evidence was led. After completion of the trial the arguments of both the parties were heard and thereafter the judgment came to be delivered. Though sufficient opportunity was given to the Manager of the Bank who has filed the complaint he has not produced any authorization from the Bank in respect of filing the complaint or to depose in support thereof. The learned Counsel for the applicant has placed reliance on the decision of the Supreme Court in the case of M.M.T.C. Ltd. and another Vs. Medchl Chemicals and Pharma (P) Ltd. and another reported in (2002) 1 SCC 234). The learned Counsel has placed reliance on the observations which are as under:The only eligibility criterion prescribed by Section 142 for maintaining a complaint under Section 138 is that the complaint must be by the payee or the holder in due course. This criterion is satisfied as the complaint is in the name and on behalf of the appellant Company. Therefore even presuming that initially there was no authority still the company can at any stage rectify that defect. At a subsequent stage the company can send a person who is competent to represent the company. The complaints could thus not have been quashed on that ground. 5. The decision in the case of MMTC LTD (supra) would be of no help to the applicant because in the present case the evidence has been led. Arguments were over. Despite sufficient opportunity being available the authorization was not produced. In MMTC Ltd (supra) the case was quashed at the initial stage where the entire evidence had not been led. The observations in the case of MMTC LTD (supra) state that the company at any stage rectify the defect. However in the present case despite sufficient opportunity being available the defect was not rectified. 6. Thereafter the learned Counsel for the applicant has placed reliance on the decision of the Supreme Court in the case of Vishwa Mitter of M/s. Vijay Bharat Cigarette Stores Dalhousie Road Pathankot Vs. O.P. Poddar and others reported in (1983) 4 SCC 701). He has placed reliance on the observation therein that anyone can set the criminal law in motion. Based on this Mr. Tambekar the learned Counsel for the applicant has submitted that the Manager was competent to file the complaint. However the present case is not under the general law but it is under a special statute. In the case of special statute the complainant requesting the Magistrate to take cognizance of the offence must satisfy the eligibility criteria prescribed by the special statute. In a case of present nature the criterion would be that the complaint must be by the payee or the holder in due course. In the present case the complaint has been filed by the Manager of the Bank. There is nothing on record to show that he was authorized by the Bank to file the said complaint which would be necessary in a case of present nature. 7. Reliance was also placed in a decision of this Court (Panaji Bench) in the case of Santan Financers & Real Estate Pvt. Ltd. Vs. Devapa A. Sarvi & another reported in (2005(2) Bom.C.R.(Cri.) 143. In the said case also it was observed 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. The said observations are made in Para-8 of the said decision. In Para-8 the Court has repeated the observations in the case of MMTC LTD (supra). However it is pertinent to note that in Para-9 of the decision in the case of Santan (supra) this Court has observed as under:- 9. As already stated the complaint in the case at hand was filed by the company through its Managing Director pursuant to the resolution passed by the Board of Directors of the said company which was signed by the Chairman and produced at Exh.11 before the learned Judicial Magistrate First Class. In the light of that the complaint could not have been dismissed for want of authority on the part of the said Managing Director either to file the complaint or to depose on behalf of the said complainant. In the present case it is seen that no such resolution has been produced by the Manager and hence the above decision would be of no help to the applicant. 8. Lastly reliance was placed by the learned Counsel for the applicant on a decision of learned Single Judge of Andhra Pradesh High Court in the case of The Waterbase Ltd. Vs. K. Ravindra and another reported in (2003(3) Bank CLR 646 (AP). Reliance was placed on the observations in Paras-38 to 40 wherein it is observed that the complainant has not produced the authorization. As noted earlier this decision is by a learned Single Judge of the Andhra Pradesh High Court. 9. On the other hand Mr. Joshi the learned Counsel for the respondent No.1 has placed reliance on the decision of this Court wherein the same issue has been dealt with. The said decision is in the case of Alka Toraskar Vs. Vaishya Urban Co.op.Credit Society Ltd. & anr reported in (2006(2) Bom.C.R.(Cri.) 717 (Panaji Bench). Similar facts as in the present case arose in the said case. This Court held that the complaint was not sufficiently represented before the Court as the recovery officer who has filed the complaint was not duly authorized either to lodge complaint or to give evidence. It was further observed that the resolution did not authorize the recovery officer of complainant society to either to file complaint on behalf of the society or to depose in support of the complaint. In such case it could not be said that the complaint was filed or evidence led in support thereof was in accordance with Section 142 of NI Act. This Court has further observed that in absence of power of attorney or valid authority by complainant in favour of Recovery Officer complaint could not have been entertained. Reliance is also placed on another decision of this Court in the case of Ashok Bampto Pagui Vs. Agencia Real Canacona Pvt. Ltd. reported in (2007(6) Mh.L.J. 94). Reliance is placed on the observations made in Paras-19 20 & 21 wherein it is observed as under:- 19. In K.N. Sankaranarayanan vs. Shree Consultants (1994(80) Company Cases 558) it was held that when a Director institutes a petition on behalf of a company without proof of authorization the invalidity cannot be cured by a later ratification and therefore such a petition is not maintainable. In Satish and Co. vs. S.R. Traders and others (1997(4) All.M.R.(JOURNAL) 58) it was held that the complaint filed by the company represented by its Manager who is not authorized to file the complaint is not maintainable. Subsequent authorization in favour of the Manager will not revive the prosecution. However I must hasten and add that the last observations as regards ratification or subsequent authorization will have now to give way to what the Apex Court has held in M/s. M.M.T.C. Ltd and another vs. M/s Medchl Chemicals and Phama (P) Ltd. and another (supra). However it is nobody?s case that till the Judgment was recorded by the trial Court that any such authorization or ratification was given in favour of the said Prashant Shirodkar to file the complaint. 20. In Ruby Leather Exports vs. K. Venu (1995(82) Company Cases 776 (Madras) the complaint was filed by a Manager and as the records did not disclose any authorization. It was held that taking cognizance of the complaint was barred under section 142(a) of the Act. In Nibro Ltd. vs. National Insurance Co. Ltd. (1991(70) Company Cases 388) it was held that ... the powers of a company in respect of a particular matter are to be exercised by the company in general meeting in all other cases the Board of Directors are entitled to exercise all its powers..... It is true that ordinarily the Court will not non-suit a person on account of technicalities. However the question of authority to institute a suit on behalf of a company is not a technical matter..... It has far reaching effects. Order 29 Rule 1 of Civil Procedure Code 1908 does not authorize persons mentioned therein to institute suits on behalf of a Corporation. It only authorizes them to sign and verify the pleadings on behalf of the Corporation. Thus unless a power to institute a suit is specifically conferred on a particular Director he has no authority to institute a suit on behalf of the company. Such power can be conferred by the Board of Directors only by passing a resolution in that regard. 21. A Director as an individual Director has no power to act on behalf of the company. He is only one of a body of Directors called the Board of Directors and alone he has no power except such as may be delegated to him by the Board of Directors or given to him by the articles of association of a company. In the case at hand the complaint was filed by one of the Directors and as already stated by a Director who had initially complained to the Police that the subject cheque was forged by the accused and without any resolution of the company or any authorization from the Board of Directors. The view held by me in consistent with the views expressed in the decisions referred to hereinabove namely those of the Madras High Court in Ruby Leather Exports vs. K. Venu (supra) Andhra Pradesh High Court and Delhi High Court which is now confirmed by the view held by the Apex Court in Dale and Carrington Invt. (P) Ltd. and another vs. P.K. Prathapan and others (supra) and therefore I hold that the complaint in this case was not filed by the company as required under Clause (a) of Section 142 of the Act and on such a complaint no process could have been issued much less a conviction imposed. The said Shri Prashant Shirodkar could not have filed the same merely in his capacity of a Director. He had to file the same only with authorization from the Board of Directors. As already stated prima facie it appears that such authorization was issued by the complainant company in favour of Shri Pednekar as can be seen from the copy of power of attorney produced. 10. The learned Magistrate has relied on the decision of this Court in the case of Alka supra Toraskar (supra) and has come to the conclusion that the Manager Shri Maheshkumar did not have the necessary authorization to file the complaint or to depose in support of the complaint. Hence the learned Magistrate has acquitted the respondent-accused. 11. Looking to the evidence on record the view taken by the learned Magistrate is a reasonable and possible view. No interference is called for. Application for leave to file appeal is rejected.