138 of ni act
basavaraj shiromani
(Querist) 27 April 2012
This query is : Resolved
One of the partner gave an authorization letter to the Manger to file a complaint against the company u/s 138 of NI Act. Before filing the complaint, a notice was issued to the accused company under the instructions of partners of the firm itself. my questions are
1. Whether the partners of the firm are competent persons to give instructions to the advocate to issue notice to accused company without proper authorization by the firm ?
2. Is a single partner is competent to give autorization letter to the Manager to file a complaint without resolution of the firm
3. Whether the complaint is maintenable
ajay sethi
(Expert) 27 April 2012
yes partners can give instructions .
partnership deed needs to be gone nto . whether single partner was authorised to give letter for and on behalf of the firm .
ajay sethi
(Expert) 27 April 2012
please note that udnder sectoion 19 partner has implied authority to bind the firm
19. Implied authority of partner as agent of the firm- (1) subject
to the provisions of Sec. 22, the act of a partner which is done to carry
on , in the usual way, business of the kind carried on by the firm, binds
the firm,
The authority of a partner to bind the firm conferred by this
section is called his implied authority"
(2) In the absence of any usage or custom of trade to the contract,
the implied authority of a partner does not empower him to -
a) Submit a dispute relating to the business of the firm to
arbitration.
b) open a banking account on behalf of the firm in his own
name.
c) Compromise or relinquish any claim or portion of a claim
by the firm,
d) Withdraw a suit or proceeding filed on behalf of the firm.
e) admit any liability in a suit or proceeding against the firm
f) acquire immovable property on behalf of the firm.
g) transfer immovable property belonging to the firm or
h) enter into partnership on behalf of the firm.
20) Extension and restriction of partner's implied authority-
The partners in a firm may, by contract between the partners,
extend or restrict the implied authority of any partner.
Notwithstanding any such restriction, any act done by a partner
on behalf of the firm which falls within his implied authority binds
the firm, unless the person with whom he is dealing knows of
the restriction or does not know or believe that partner to be a
partner.
22. Mode of doing act to bind firm : In order to bind a firm, an act
or instrument done or executed by a partner or other person on
behalf of the firm shall be done or executed in the firm name or
in any other manner expressing or implying an intention to bind
the firm.
Shonee Kapoor
(Expert) 27 April 2012
Nothing left to be added.
Regards,
Shonee Kapoor
harassed.by.498a@gmail.com
SAINATH DEVALLA
(Expert) 27 April 2012
In addition to Mr.Sethiji,
What are the financial responsibilities of the partners according to the deed.They may have an equal say in the management of the firm or they can even divide the responsibilities.But whoever acts,its on behalf of the firm only.That is implied.As the partners are signatories to the financial aspects,they cannot authorise the manager to issue notice,its a flaw.Any one of the partners on behalf of the firm,according to the authorization can issue legal notice to the defaulting company.The merit of the case depends on the contents of the legal notice.Even a minute technical legal flaw will favour the accused.
DEFENSE ADVOCATE.-firmaction@g
(Expert) 27 April 2012
Process may be issued but winning the case will depend on many probabilities.
It is a criminal offense and not civil liability so examination in chief has to be a person who can stand the CROSS of a vigilant defense advocate.
Any deposition against section 60 of evidence act will be fatal even though all other things are OK.
DEFENSE LAWYERS WIN SUCH CASES EASILY SINCE IN OVER CONFIDENCE SIMPLE COMMON MISTAKES ARE DONE IN PW 1 DEPOSITION.
prabhakar singh
(Expert) 29 April 2012
I answer all your three questions in AFFIRMATIVE.
It seems we deviate too much from queries while answering.
basavaraj shiromani
(Querist) 29 April 2012
In my opinion all three points to be considered in negative.
A company or a firm is a juristic person and no doubt all the affairs and activities are to be handled by the directors or partners. But to issue demand notice or to file a complaint who is competent person? i.e, only a managing partner of the firm or person authorized by the firm itself.Therefore a partner cannot give authorization to his partner to file a complaint or to issue a notice. in the regard there are so many rulings and citations. My friends may see Kar. L.J. 2009 (3) at Page No: 253. wherein it is stated that - one must have a competency to file such complaint. The complaint must necessarily be a payee or holder in due course. If complaint is filed by the Manager then proper authorization of the firm is required but not from any one of the partner. another case law is that Kar. L.J. 2007 (5) at page No: 319 it is stated that - since the company is a juristic person, any person on behalf of the company has to be authorized by the company under articles of associaion or by a separate resolution to depose on behalf of the company. Like wise there are so many rulings I.L.R. 2007 Kar at page No: 5126. Cri.L.J 2010 at page No: 734. Kar.L.J. 2010 at page No: 486.
Looking to all the above rulings and authorities I am not agree with Prabhakarshingajee But JSDN and Sainath experts are rightly answered. One more thing is that an implied authority of a partner U/s 19 of the partnership act is subject to provisions of Sec 22 of the same act and if they go through the Sec 141 of NI Act will find the legal situation.
