The Supreme Court bench comprising Justices Sanjay Kishan Kaul and M.M. Sundresh held that if a complaint was made by the Managing Director or the Manager on behalf of the company, 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.

The respondent issued 8 cheques of Rs.20,000/- each in favour of M/s. Bell Marshall Telesystems Limited. These cheques were drawn on different dates but were presented together for payment. All the cheques were dishonoured on account of “funds insufficient” as per Bank Memos and legal notices were issued by the beneficiary under Section 138(b) of the Negotiable Instruments Act, 1881. Since the demand was not met within 15 days, a complaint was filed before the Special Metropolitan Magistrate accompanied by a Board Resolution of the Company  authorising Mr. Bhupesh Rathod, the Managing Director to initiate legal action against the respondent on behalf of the Company. The respondent took an objection that the complaint was filed in the personal capacity of Mr. Bhupesh Rathod and not on behalf of the Company. The trial court acquitted the respondent by reason that the Board Resolution itself was not signed by the Board of Directors. Then, the appellant preferred  an appeal before the High Court but they dismissed the appeal. Hence the current appeal.

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The appellants contended that it was apparent from the cause title of the complaint that the same had been filed on behalf of the Company and that was exactly why the Board Resolution authorising the Managing Director to file a complaint for dishonour of the cheques was annexed. They further contended that it is the say of the appellant that there is a presumption under Section 139 and 118 of the NI Act which was not rebutted by the respondent and that a duly signed cheque was sufficient to raise a presumption under Section 139 of the NI Act against the respondent. The learned counsel for the respondent submitted that the Board Resolution was also not signed by the Directors of the Company nor does it find that it authorises the complainant to file the complaint.

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 as a matter of fact has not set up a case that the nature of transaction was of the nature which fell beyond the scope of Section 138. 

By referring to a judgement, Associated Cement Co. Ltd. v. Keshavanand [(1998) 1 SCC 687] it was held that If a complaint was made in the name of the Company, it is necessary that a natural person represents such a juristic person in the court and the court looks upon the natural person for all practical purposes. And relying on this judgement the court extracted that it is 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 cannot be a fundamental defect merely because the name of the Managing Director is stated first followed by the post held in the Company. In the case in hand, the Board Resolution was a copy and thus it does not have to be signed by the Board Members. Another material aspect was that the signatures on the cheques were not denied and there was any plea of fraud or misrepresentation. And hence, it was obvious that the respondent only sought to take a technical plea arising from the format of the complaint to evade his liability.  The appeal, hence, allowed.