When complainant/payee is a company, an authorized employee can represent the company in the Cheque bounce case: SC


The Supreme Court ruled that when the complainant/payee is a company, an authorized employee can represent the company in the Cheque bounce case.


The respondent had issued seven cheques, in all amounting to Rs.1,10,00,000/­ 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 through registered post, acknowledgement due. 

Though the notices were received 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 Sub ­Divisional Judicial Magistrate.


Senior Advocate Ashok K. Parija, appearing on behalf of the appellant, assailed the judgment passed by the High Court, and contended that the High Court has utterly misconstrued the   principle enunciated in A.C. Narayanan to not suit the appellant. 

He argued 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.

Advocate Santosh Kumar, appearing for the respondent, contended that the High Court having noted the judgment in  A.C. Narayanan 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.


The three judge bench of the Chief Justice of India N.V. Ramana, Justice A. S. Bopanna and Justice Hima Kohli stated 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 court said 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.

The court added that 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.

The court held that the High Court was not justified in entertaining the petition filed under  Section 482 of Cr.PC and quashing the order, taking cognizance of the complaint filed by the appellant.

Case title: M/s TRL Krosaki Refractories Ltd. v/s M/s SMS Asia Private Limited & Anr.  

Citation: SLP (Crl.) No.3113 of 2018

Click here to read the Order/Judgment

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