Condonation in delay in case of sec 138

This query is : Resolved 
 



Guest (Querist)
06 August 2012

Sir,
Application for condonation in delay (4days) has been filed against my company. The reason for delay is given that the person authorised to file application was sick( suffering from maleria). Its a matter of company and in case the person authorised was sick, the other director could have filed application. Also the doctor certificate submitted shows that the person was ill from 1st to 7th of Dec. The last date to file complaint was 4th of Dec. Knowing in advance that the authorised person is ill, the company should have taken necessary steps to file complaint well within time.
advice on the matter,and also how to object codonation of delay.


Advocate M.BhadraOnline (Expert)
06 August 2012

File an Objection Petition calling the complainant to submit pathological test,medicine purchase voucher and doctor's witness before the Court.



Guest (Querist)
06 August 2012

Sir thanks for your kind advice. Please advice whether this stand of ours would also be valid- As the complaint has been filed by a company having four directors. In case one director is sick, the complaint may have been filed by other directors as all of them are locally available. Also as per doctor's certificate, the concerned person was ill from 1st to 7th of Dec and last date was 4th dec. knowing in advance, the company should have taken necessary steps to file the complaint in time.
Please advice considering the above points.



Guest (Expert)
07 August 2012

There can be no plausible justification for filing the complaint belatedly on behalf of the company as the company could have diligently authorised any other person to file the complaint when the director was ill.

Hemant AgarwalOnline (Expert)
07 August 2012

1. A Co. is a juristic person. To file a legal case in a court of law, the Co. has to mandatorily pass a BOD resolution appointing a specific person (Director, Manager, officer) to file & represent the matter in the court.


2. The above BOD resolution is autonomous'ly final and binding on the Courts. In the event if the authorised person is sick (by evidence), another BOD resolution has to be passed to appoint another specific person (Director, Manager, officer) to file & represent the matter in the court .BUT. only after proper notice period .AND. all this takes time, which could go beyond the limitation period for filing matter u/s 138. In all prudent probabilities, the Court would not have any reasons to disallow the Condonation Delay application, if proper justifications and relevant documents are placed on record.


3. In the absence of a BOD resolution, authorising a specific person to file / represent complaint, the matter u/s 138 r/w 141 would fail. Meaning NO SPECIFIC RESOULTION = NO AUTHORITY TO FILE COMPLAINT.


4. Judgment dated 1-6-2011, by the Hon. Mumbai High court (Entertainment Society of Goa vs Ritza Wine Pvt. Ltd), wherein the Hon. Judge has held that “Complaint Not Maintainable in absence of specific resolution ….”

Bombay High Court
Entertainment Society of Goa vs. Ritza Wine Pvt. Ltd. & Ors.
Judgement Date : 1/6/2011
Citation : ALLMR(CRI)-2011-3-2639 (PANAJI-GOA)
Judges : N.A.BRITTO


Keep Smiling .... Hemant Agarwal



Guest (Querist)
07 August 2012

Seeks more advice.

Kundan Kr. SinghOnline (Expert)
07 August 2012

Nice information .
Thanks Mr. agrwal



Guest (Querist)
07 August 2012

Like to have more comments on the subject matter .....

R Trivedi (Expert)
07 August 2012

This comment may not please you.


The court will condone the delay !!


You can rightfully argue or seek papers, but courts will condone the delay in general. The statue has been amended to consider the delay on valid grounds, and 4 days delay on account of one of the authorized director's sickness is quite a justified reason.



Guest (Querist)
07 August 2012

More advice please......



Guest (Querist)
07 August 2012

Mr. Hemant agarwal, would you please clarify that BOD Resolution is must for filling a complaint in case of Public Limited Company and Private Limited Company both or it is not mandatory in case of PVT LTD COMPANY. Please advice........

ajay sethiOnline (Expert)
07 August 2012

Mr agarwal has cited a judgement of bombay high court that in absence of board resolution complaint by company would not be maintanable . it would apply to both public and pvt ltd companies



Guest (Querist)
07 August 2012

Mr. Agarwal, I need your comments also on the subject matter...

M V GuptaOnline (Expert)
07 August 2012

Dear Mr. Mithilesh, the objection proposed by you in ur second posting is OK.

R Trivedi (Expert)
07 August 2012

Court while granting the objection raised by accused looks for:

1. That if the objection raised is denied will it cause any prejudice to accused and also if the reason given is bonafide or not.

In this case as per Mr Mithilesh, the authorized director was sick, that means at least the director had authority, now condoning has been included in the statue, and raising objection is the right of opposing party, but in this case court will go by the fact that these few days delay will cause no prejudice to the accused and on top of that this delay is well justified and hence court may condone.

Hemant AgarwalOnline (Expert)
07 August 2012

for MITHILESH CHOUDHARY:


1. The Discretion to condone a reasonable delay (say few days) is SOLE'LY on the Trial Judge and his discretion & decision is final. In all probabilities, even the HC would not interfere on this condonation issue.


2. IF the Trial Judge, dismisses the Delay Condonation application (due to discretionary powers), THEN the matter is dismissed. as not maintainable u/s 138. This whole process is dependent on the oral arguments by the complainants counsel. BUT this "discretion" of the Trial Judge is final.


3. The Mumbai HC, judgement citied earlier, is applicable to all juristic legal entities, viz. a Public Ltd Co., a Pvt. Ltd. Co., a Society (which-so-ever), a Trust, .OR. any other legal entity wherein authority /power is to be delegated to a third authorised person.
Note: It is not upto the Accused party to argue on the point of "in case the person authorised was sick, the other director could have filed application", since many times other directors may be outstation. As stated earlier "the "discretion" of the Trial Judge is final" and the accused party may be able to make only feeble attempts to argue on the same, unless and until the Accused party brings on record some documents which proves fraud and abuse of process of law.


4. Though file-attachment-facility in this section is not available, I am reproducing the entire judgement as below :


Keep Smiling .... Hemant Agarwal




Bombay High Court
Entertainment Society of Goa
Vs
Ritza Wine Pvt. Ltd. & Ors.
Judgement Date : 1/6/2011
Citation : ALLMR(CRI)-2011-3-2639 (PANAJI-GOA)
Judges : N.A.BRITTO
Head Note :
Negotiable Instruments Act, (1881) Ss.138, 142 - Complaint filled by CEO of registered Society - Not maintainable in absence of specific resolution authorizing CEO to lodge a complaint.
Full Text :
JUDGMENT:-


1. Heard learned Counsel on behalf of both parties.


2. The complainant has filed the present application for leave to appeal against the acquittal of the accused under Section 138 of the Negotiable instruments Act, 1881, vide Judgment dated 29-1-2010.


3. There is no dispute that the complainant is a registered society, registered under the Societies Registration Act, 1860. The complaint was filed by Shri Nikhil Desai on behalf of the complainant- Society who was the complainant's Acting CEO. The complaint was filed for a dishonour of a cheque dated 2- 11-2006 for Rs.6,00,000/- which when presented for payment was returned dishonoured for lack of insufficient funds and a legal notice sent to the accused was not complied with by the accused.


4. As said, the complaint was filed by Shri Nikhil Desai on behalf of the complainant-Society. The said Nikhil Desai was then replaced by Shri Venancio Furtado who had deposed on behalf of the complainant. The said Venancio Furtado was the General Manager.


5. The learned trial Court, acquitted the accused, interalia, on the ground that the said Venancio Furtado who was the General Manager of the complainant had admitted that the complainant was a registered Society and he had not produced any authorization to depose in the case. It appears that reliance was placed on a decision of the Delhi High Court in the case of Bhasin Credit Aid Ltd. v. Raj Kumar(2007 Cr.L.J. 1377) in support of the submission that the said Venancio Furtado being the General Manager did not require any special authorization. However, the learned J.M.F.C. relying on the case of Alka Toraskar v. The Vaishya Urban Co-op. Credit Society Ltd.(2006(2) Bom. C.R.(Cri) 717) as well as on the case of The Goa State Co-op. Bank Ltd. v. M/s. Kurtarkar Traders, unreported decision in Criminal Appeal Nos. 35,50 and 55 of 2009 dismissed the complaint on the ground that Venancio Furtado had not even produced his appointment letter to show that he was the General Manager of the complainant-Society much less his power of attorney or his valid authorization from the Entertainment Society of Goa, and, therefore the complaint should fail. After the dismissal of the complaint, the complainant has filed an application dated 20-12-2010 to produce Order dated 13-11-2009 by which the said Venancio Furtado was transferred and posted as a General Manager of the complainant's Society.


6. It is the contention of Shri R. Almeida, learned Counsel appearing on behalf of the complainant, that the said Order dated 13-11 -2009 was not produced under a bona fide belief that the same was not required before the Court to be produced in view of the Judgment of this Court in the case of Central Bank of india v. Tarseema Compress Wood Manufacturing Co. and others (1997(2) Bom.C.R. 267). Here, it may be stated that, in that case this Court had noted that PW1/N. R. Koramne who was the manager of the concerned Branch of the plaintiff-Bank had given evidence on the basis of the documents. It was therefore held that anybody could come and give evidence in Court provided that he is acquainted with the facts of the case. At the same time it was clearly stated that a power of attorney or authorization would be required for filing the plaint or signing the plaint or signing a written statement (emphasis supplied).


7. On the other hand, Shri Ryan Menezes, learned Counsel appearing on behalf of Respondent No.l, submits that there was no reason for the complainant not to have produced the said Order dated 13-11-2009. Learned Counsel submits that the explanation that it was not produced due to bona fide belief cannot be accepted. Shri Menezes has also placed reliance on the said case of Alka Toraskar v. Vaishya Urban Co-op. Credit Society Ltd. and another (supra) as well as Ashok Bampto Pagui v. Agenda Real Canacona Pvt. Ltd. and another (2007(4) Bom.C.R. 465), The Goa State Co-op. Bank Ltd. v. M/s. Kurtarkar Traders as well as the case of Mamatadevi v. Vijaykumar Mamraj Agrawal (2008 ALL MR(Cri) 442). Reliance is also placed on Mr. Chico Ursula D'Souza v. M/s. Goa Plast Pvt. Ltd. (2009(1) ALL MR 290).


8. Even if the application for production of the said Order dated 13-11 -2009 is allowed it cannot certainly cure the fundamental defect in the complaint which was filed by the said Nikhil Desai on behalf of the complainant-Society without any resolution passed by the complainant in his favour to file a complaint. Learned Counsel on behalf of the complainant would submit that the Respondent/ Accused had not raised this point that the complaint was not filed in accordance with law.


9. In the case of Alka Toraskar v. Vaishya Urban Co-op. Credit Society Ltd. and another (supra) on which reliance was placed by the learned trial Court it was observed that a complaint under Section 142 of the Act can be filed either by the payee or holder in due course. The complainant-Co-op. Society was the payee in that case and the complaint was filed in its name. The authority produced did not sufficiently authorize Shri G. P. Shirodkar either to file the complaint or to depose in support thereof. The complainant was not sufficiently represented before the Court. Therefore, it could not be said that the complaint filed or the evidence given in support thereof was in accordance with Section 142 of the Act, which requires that the complaint has to be made by the payee, or as the case may be, by the holder in due course of the cheque. in the absence of any power of attorney or a valid authority by the complainant in favour of the said Recovery officer, the complaint itself could not have been entertained and conviction based on such a complaint, is liable to be set aside. The said decision is squarely applicable to the facts of the case at hand.


10. In the case of Mr. Chico Ursula D'Souza v. M/s. Goa Plast Pvt. Ltd. (supra) [2009(1) ALL MR 290] this Court has again held that a person who claims to represent another is expected to produce an authority or power which entitles him to so appear. in the case of The Goa State Co-op. Bank Ltd. v. M/s. Kurtarkar Traders (supra) it was held that the complainant as a body corporate can act only by resolutions passed by the directors at its meeting. There was no resolution passed by the complainant in favour of its Managing Director authorizing him to appoint any person to prosecute the defaulters whose cheques bounced. Power to lodge complaints could have been given only by a resolution by the board of directors. There was none given and none was produced. It was further observed that in the case of Ashok Bampto Pagui v. Agencia Real Canacona Pvt. Ltd. (supra) a complaint even by a director of a company was not maintainable without a resolution by the board of directors.


11. In the case at hand, as already stated, the complainant is a Society registered under the Societies Registration Act, 1860 and had passed no resolution authorizing the said Nikhil Desai to lodge a complaint on its behalf, and, therefore the complaint filed by the complainant could not have been considered as a complaint, as required to be filed under Section 142 of the Negotiable instruments Act, 1881. in this view of the matter, the complaint filed, was rightly dismissed.


12. Consequently, I find there is no merit in both the applications, and accordingly the same are hereby dismissed. Applications dismissed.



Guest (Querist)
07 August 2012

Thanks Mr. Hemant Agrawal. Thank you very much for your kind advice.



Guest (Expert)
07 August 2012

Merits of the case with proper justification, subject to the judge being convinced on reasons for delay, can be the main criteria for condonation of delay.



Guest (Querist)
07 August 2012

Thanks Mr. M. V. Gupta for your kind advice....

R.RAJENDRAN (Expert)
07 August 2012

Delay in this case is not inordinate; therefore the delay may be condoned, provided the reasons are convincing.



Guest (Querist)
07 August 2012

Thanks Mr. R. K. Trivedi for your kind advice



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