TMI Blog2024 (2) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... uires an examination of the complaint, and whether the complainant is an incorporeal body, it is only one of its employee or authorized representative can be examined on behalf of the company. With the result, the company becomes a dejure complainant and the person, who is representing the company whether it is employee or the authorized representative becomes de facto complainant, thus, in every complaint lodged by a company, which is a separate juristic personality, there is a complainant dejure and a complainant de facto. This application has been pending since last 8 years and the trial could not proceed, it is in the interest of justice that the trial may be concluded expeditiously in accordance with law, preferably within a period of six months from the date of receipt of certified copy of this order without granting any unnecessary adjournments to either side. The instant application filed by the directions of the company is devoid of merit, and is, accordingly, dismissed. - HON'BLE PRASHANT KUMAR, J. For the Applicant :- Amit Daga, Ashish Kumar Singh For the Opposite Party :- G.A., Dinkar Lal, Dipendra Kumar, Pradeep Kumar Rai, Satendra Kumar, Suyas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since last 8 years. Now the pleadings are complete and the matter is ripe for hearing. ARGUMENT ON BEHALF OF THE APPLICANT 5. Learned counsel for the applicant submits that prosecution, initiated under Section 138 of N.I. Act by and on behalf of the company cannot be initiated through power of attorne. It is initiated by power of attorney HOLDER, then the power of attorney and letter of authorized signatory must be on record of trial court. There was not even a single authorization letter, power of attorney or letter bearing seal and signatures of the Board of Directors of the Company, which authorize to institute complaint on behalf of the complainant is available before the trial Court, therefore, the complaint filed by the complainant is not maintainable 6. He further submits that complaint does not fulfil the basic ingredients of Section 141 of N.I. Act. The complaint as well as the statements are absolutely silent on the point, that on the date of issuance of the cheque or on the date on which the cheque was dishonoured, who was in charge or responsible, and looking after day to day affairs of the company. Hence, the complaint against the applicant is not mainta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... z. Power of Attorney , however there is no date or any other particulars of the Power of Attorney mentioned in the complaint. Even in the verification statement made by the respondent no. 2, there is not even a whisper that she is filing the complaint as the Power of Attorney holder of the complainant. Even the order of issue of process dated 20th February, 1998 does not mention that the Magistrate had perused any Power of Attorney for issuing process. The appellant has stated that his Advocate conducted search and inspection of the papers and proceedings of the criminal complaint and found that no Power of Attorney was found to be a part of that record. This has not been disputed by the respondents. In that view of the matter and in light of decision of the larger Bench, as referred above, we hold that the Magistrate wrongly took cognizance in the matter and the Court below erred in putting the onus on the appellant rather than the complainant. The aforesaid fact has also been overlooked by the High Court while passing the impugned judgment dated 12th August, 2005. 9. He further submits that in the complaint it is not stated that the complaint has been filed through t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not defeat the substantive right for prosecution. Once he has specifically alleged the specific acts and the role played to the accused persons. 16. He further submits that the complaint qualifies the threshold of the complaint as per the ingredient of Sections 138 and 142 of N.I. Act. The legally enforceable debt is there it is not disputed, the cheque has been dishonoured on the ground of insufficient funds, it cannot be disputed. The legal notice was sent in time, it is not disputed and the complaint has been filed as per the provisions of Section 138 of N.I. Act. is not disputed. 17. He further submits that the arguments advanced by the counsel for the applicant are squarely covered by the judgment of Hon ble Supreme Court in the matter of M /s TRL Krosaki Reractories Ltd. (supra). 18. He further refers on Section 168 of the Companies Act, which lays down that even upon resignation of a director he would be liable for the acts performed during the course of his directorship. For ready reference Section 168 (1) and (2) of the Companies Act are quoted hereunder:- (1) A director may resign from his office by giving a notice in writing to the company and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he signatory was one of the director, Mr. Ashok Sharma, towards the discharge of the legally enforceable debt. Legal notice was sent to all of them. No reply was given by them. Thereafter, a complaint was filed that is sufficient compliance of their participation. 22. Learned counsel for the opposite party no. 2 submits that the this concept of vicarious liability is alien to criminal jurisprudence, however, the same was introduced in the N.I. Act for the reasons of dealing with corporeal entities because in a company the directors and its representatives and signatories are the persons who run the company. Since the company is juristic personality and cannot be prosecuted, hence, the normal criminal law will not be applicable in that case, it is for this reason the vicarious liability was first recognized and introduced by the law makers while drafting N.I. Act. 23. Learned counsel for the opposite party no. 2 further submits that keeping this in mind Section 141 was enacted wherein just now the company, the key personnels, directors was to be held liable for such kind of criminal offence. CASE NO.9430 OF 2016 (YATINDRA SINGH PAWAR) 24. Learned counsel for the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the same was being filed through a power of attorney holder. 31. Per contra, learned counsel for the opposite party no. 2 has placed reliance in one of the latest judgement of Hon ble Supreme Court in the case of M /s TRL Krosaki Reractories Ltd. Vs. M/s SMS Asia Private Limited and another (supra) in which the Hon ble Supreme Court has clearly held that the ratio laid down in the matter of A.C. Naraynan 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 NI Act that 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. Section 142 of NI Act does not specify who should represent the company, if a company is the complainant. A company can be represented by an employee or even by a non-employee authorized and empowered to represent the company either by a resolution or by a power of attorney. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d run contrary to the principle of vicarious liability detailing the circumstances under which a direction of a company can be held liable. (iii) Circumstances when Director/Person in charge of the affairs of the company can also be prosecuted, when the company is an accused person: No doubt, a corporate entity is an artificial person which acts through its officers, directors, managing director, chairman etc. If such a company commits an offence involving mens rea, it would normally be the intent and action of that individual who would act on behalf of the company. It would be more so, when the criminal act is that of conspiracy. However, at the same time, it is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Second situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicarious liability, by specifically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was given. It can only be seen during the trial whether he was responsible in placing the order getting the material and, thereafter, resigning to absolve himself from any king of liability. This issue cannot be adjudicated upon in the present proceedings. 39. 37A. It is a settled principle that if the payee is a company the complaint has to be filed in the name of the company. Section 142 of the N.I. Act does not specify as to who should represent the company, if the company is the complainant. A company can be represented by an employee or even by a known employee, who is duly authorized and empowered to represent the company either by resolution or by a power of attorney. 40. Further, where the company is a complainant, who will represent the company, and how the company will be represented in 138 proceedings is not covered by the Code. Section 200 of the Code mandatory requires an examination of the complaint, and whether the complainant is an incorporeal body, it is only one of its employee or authorized representative can be examined on behalf of the company. With the result, the company becomes a dejure complainant and the person, who is representing the company wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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