Quashing Cheque Dishonor Complaint by a Company at Threshold Over Authorization is Improper: Supreme Court
The Supreme Court, in M/S Naresh Potteries v. M/S Aarti Industries and Another, reaffirmed that in cheque dishonor cases under Section 138 of the NI Act, when the complainant is a company, the complaint must be filed either by the payee or an authorized person with knowledge of the transaction. The bench of Justice B.R. Gavai and Justice K.V. Viswanathan held that disputes regarding authorization or knowledge should be addressed during the trial, and quashing a complaint at the outset is unwarranted.
In this case, M/S Naresh Potteries authorized its manager, Neeraj Kumar, to file a complaint after a cheque issued by M/S Aarti Industries was dishonored. Kumar affirmed his knowledge of the case in an affidavit under Section 200 CrPC, leading to the issuance of summons by the trial court. The High Court quashed the complaint, citing Kumar’s alleged lack of knowledge, prompting an appeal to the Supreme Court.
The Court emphasized that under Section 142 of the NI Act, a complaint must be filed in the company's name but can be pursued by an employee with proper authorization and knowledge. Citing precedents like National Small Industries Corporation Ltd. v. State (NCT of Delhi) and MMTC Ltd. v. Medchl Chemicals, the Court held that a power-of-attorney holder or authorized employee familiar with the transaction can file and verify the complaint.
The Supreme Court concluded that the complaint met the requirements of Section 142, found the High Court's decision erroneous, and reinstated the complaint for trial on merits. The judgment cautioned against premature dismissal of complaints without due consideration and directed the trial court to proceed appropriately.