BHUPESH RATHOD versus DAYASHANKAR PRASAD CHAURASIA & ANR.

Citation: [2021] 7 S.C.R. 319 · Decided: 10-11-2021 · Supreme Court of India · Bench: SANJAY KISHAN KAUL · Disposal: Appeal(s) allowed
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Judgment (excerpt)

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BHUPESH RATHOD
v.
DAYASHANKAR PRASAD CHAURASIA & ANR.
(Criminal Appeal No. 1105 of 2021)
NOVEMBER 10, 2021
[SANJAY KISHAN KAUL AND M. M. SUNDRESH, JJ.]
Negotiable Instruments Act, 1881: ss.138, 142 – Complaint
filed u/s.138 by the Managing Director of the appellant-company –
Board Resolution authorising the Managing Director to file
complaint for dishonour of cheque annexed with the complaint –
Defence of respondent that the complaint was not in proper form as
the complaint and the Board Resolution annexed did not lead to
conclusion that it was filed on behalf of the Company – Held: It is
quite apparent from the format of the complaint that the Managing
Director had filed the complaint on behalf of the Company – There
could be a format where the Company’s name is described first,
suing through the Managing Director but there cannot be a
fundamental defect merely because the name of the Managing
Director is stated first followed by the post held in the Company – It
would be too technical a view 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 –  Respondent not having disputed
his signatures on the cheques, it was for him to show in what
circumstances the cheques had been issued, i.e., why was it not a
cheque issued in due course – There was no plea of any fraud or
misrepresentation – The complaint was properly instituted and the
respondent failed to disclose why he did not meet the financial
liability arising to a payee, who is a holder of a cheque in due
course – Complaint was instituted in July, 2006 – In the given
scenario, the respondent should be sentenced with imprisonment
for a term of one year and with fine twice the amount of the cheque,
i.e., Rs.3,20,000/- –  However, in view of passage of time, the
sentence would stand suspended if he pays a further sum of
Rs.1,60,000/- to the appellant.
[2021] 7 S.C.R. 319
319
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SUPREME COURT REPORTS
[2021] 7 S.C.R.
Allowing the appeal, the Court
HELD: 1. The respondent not having disputed his
signatures on the cheques, it was for him 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 was said on the substantive
aspect. [Para 17][327-H; 328-A-B]
2. 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. It is quite apparent from the format of the complaint
that the Managing Director has filed the complaint on behalf of
the Company. There could be a format where the Company’s name
is described first, suing through the Managing Director but there
cannot be a fundamental defect merely because the name of the
Managing Director is stated first followed by the post held in the
Company. [Paras 18, 22][328-B-C; 329-A-B]
Triyambak S. Hegde v. Sripad Crl. Appeal Nos.
849-850/2011  decided on 23.09.2021; Associated
Cement Co. Ltd. v. Keshavanand (1998) 1 SCC 687 :
[1997] 6 Suppl. SCR 500; M.M.TC Ltd. & Anr. v. Medchl
Chemicals and Pharma (P) Ltd. & Anr. (2002) 1 SCC
234 : [2001] 5 Suppl. SCR 265; Credential Finance
Ltd. v. State of Maharashtra (1998) 3 Mh.L.J. 805 –
referred to.
3. A copy of the Board Resolution was filed along with the
complaint. An affidavit had been brought on record in the trial
court by the Company, affirming to the factum of authorisation in
favour of the Managing Director. A Manager or a Managing
Director ordinarily by the very nomenclature can be taken to be
the person in-charge of the affairs of the Company for its day-to-
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day management and within the activity would certainly be calling
the act of approaching the court either under civil law or criminal
law for setting the trial in motion. It would be too technical a view
to take to defeat the compl
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