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SC: Format of the complaint itself could not be said to be defective though it may not be perfect

The Supreme Court Bench comprises Justices Sanjay Kishan Kaul and M.M. Sundresh on Wednesday was hearing a case [REED 2021 SC 11001] and held that It would be too technical a view taking to defeat the complaint merely because the body of the complaint does not elaborate upon the authorisation. It was quite apparent 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 could not be a fundamental defect merely because the name of the Managing Director was stated first followed by the post held in the Company. It was also relevant to note that 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 Company for its day-to-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.

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. As far the authorisation was concerned in the present case, it was a copy and, thus, does not have to be signed by the Board Members, as that would form a part of the minutes of the Board meeting and not a true copy of the authorisation.

The Apex Court felt that it has been wrongly concluded that the Managing Director was not authorised. In fact, as Managing Director of the company, Mr. Bhupesh Rathod/ Sashikant Ganekar were authorised to appoint advocates, issue notices through an advocate, file complaints, verifications on oath, appoint Constituent attorney to file a complaint in the court and attend all such affairs which may be needed in the process of legal actions. What more could be said?

The finding by the Courts below as to the lack of authorisation to depose also, thus, stands nullified. Thus, the format itself could not be said to be defective though it may not be perfect. The body of the complaint need not be required to contain anything more in view of what has been set out at the inception coupled with the copy of the Board Resolution. There was no reason to otherwise annex a copy of the Board Resolution if the complaint was not being filed by the appellant on behalf of the Company.

The Supreme Court observed that one of the most material aspects was, that the signatures on the cheques were not denied. Neither was it explained by way of an alternative story as to why the duly signed cheques were handed over to the Company. There was no plea of any fraud or misrepresentation. It does, thus, appear that faced with the aforesaid position, the respondent only sought to take a technical plea arising from the format of the complaint to evade his liability. There was no requirement of a loan agreement to be executed separately as any alternative nature of the transaction was never stated.

The apex Court were thus, of the view that both the impugned orders of the trial court and the High Court cannot be sustained and are required to be set aside. The finding is, thus, reached that 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.

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