T. Unnikrishnan v. Ratheek K and Anr

What happened

The petitioner, a PWD contractor, is the accused in S.T. No. 807/2022 before the Judicial First Class Magistrate-I, Kannur, on a complaint by the Secretary of The Educational Empowerment & Welfare Co-operative Society, Kannur Ltd. alleging that a cheque of ₹3,16,43,185 (No. 135703 dated 25 February 2022 of South Indian Bank) issued by the petitioner in discharge of a legally enforceable liability was dishonoured for insufficiency of funds and the amount was not paid despite statutory notice. The cause title read 'Ratheesh K, S/o Narayanan, 43 years, The Secretary, The Educational Empowerment & Welfare Cooperative Society, Kannur Limited', and the complaint said the parties entered into an agreement on 23 October 2020 under which the complainant agreed to supply human resources and money for public works entrusted to the accused. The petitioner argued, relying on Jose P.P. v. M.M. Abdulkhader, 2020 (3) KHC 545, Jayakumar v. Devi Vilasom Kettuthengu Sangham and National Small Industries Corporation Ltd. v. State (NCT of Delhi), that an employee or office bearer cannot maintain a section 138 complaint in an individual name. The respondent said the Secretary was authorised by the bye-laws and a resolution of the Managing Committee.

Questions before the court

• Is the complaint liable to be quashed because it was filed in the name of the Secretary and not of the society, the payee?

Why the court ruled this way

The averments showed the transaction was between the petitioner and the society, and the cheque was drawn in favour of the society; the complainant had produced the agreement, registration certificate, bye-laws and amended bye-laws and the resolution authorising the Secretary (paragraph 10). Jose P.P. holds that an authorised representative can act only on behalf of the principal (paragraph 11), but the Supreme Court in Bhupesh Rathod v. Dayashankar Prasad Chaurasia, (2022) 2 SCC 355, held that there is no fundamental defect where the managing director's name is stated first followed by the post held, that a company must act through a person, and that only the existence of authorisation can be verified (paragraph 12). The Court held that Bhupesh Rathod squarely governed the case (paragraph 13), the complaint was instituted by Ratheesh K. as Secretary and not individually (paragraph 14), and the defect, if any, was merely technical (paragraph 16). National Small Industries Corporation explains that the company is the de jure complainant and its representative the de facto complainant (paragraph 17). The challenge was founded solely on the form of the cause title and not on the competence or authority of the person who filed the complaint, and such a hyper-technical objection cannot defeat a legitimate prosecution (paragraphs 19 and 20).

Controlling point

The complaint was filed by the society, the payee, through its duly authorised Secretary, and there was no ground to quash it.

Order and next steps

The criminal miscellaneous case was dismissed. Because the complaint is of 2022, the trial court was directed to dispose of it in accordance with law as expeditiously as possible.

Practical implications

A company or society filing a cheque complaint should plead the entity as the complainant acting through its authorised officer, and annex the authorisation; an accused cannot rely on word order in the cause title alone to avoid trial.

Limits of this ruling

• The Court decided only the maintainability objection on the form of the complaint; whether the cheque was issued for a legally enforceable debt is for the trial.