Magistrate’s Order taking cognizance of offence couldn’t be quashed on ground of payment of insufficient Court fees

Case Details: Sree Metaliks Ltd. v. Agarwal Fuel Corporation (P.) Ltd. - [2021] 130 taxmann.com 398 (Orissa)

Judiciary and Counsel Details

• • S.K. Mishra, J.
  • Sanjeev Udgata, S.B. Udgata and A. Mishra for the Petitioner. 
  • Biswajit Nayak, B.R. Sahu and S. Samal for the Respondent.

Facts of the Case

In the given case, the complainant supplied coal to the petitioner company for valuable consideration. As a result, the petitioner issued several cheques amounting to almost 10 crore rupees. All the cheques were presented before the bank, but the cheques were not honored, which led to the issuance of notices as envisaged under clause (b) of the proviso to section 138 of the Negotiable Instrument Act, 1881.

After service of such notices, there is no payment by the petitioner; the complaints were lodged before the SDJM. The Magistrate took cognizance of the offence under section 138 of the NI Act.

Thereafter, the petitioner submitted that the complaint was to be filed through the Director or Principal Officer of the complainant. However, in the present cases, the complaint was filed by the In-charge, Senior Clerk of the complainant company who had no statutory power nor had been authorized by the Board of Directors of the company to file a complaint case against the petitioner.

In addition to the foregoing, it was also alleged that as insufficient court fees were paid in the cases, the complaint should be dismissed.

High Court Held

The High Court of Orissa found that the complaint has been filed by the Deputy In-charge of the complainant and he has been duly authorized by the Board of Directors of the company to file the case and that he is competent to swear an affidavit on behalf of the company.

So, it is apparent from the record that in these cases, the complaint has been filed by an employee of the company, he was duly authorized by a Resolution of the Board of Directors (as there is nothing on record to disbelieve this document on the face of it), and that the complaint has been made in the name of the company.

Further, if insufficient court fees are paid in a proceeding, be it a civil or criminal, the proceeding should not be dismissed at the threshold, rather the Court is under a duty to give a reasonable opportunity to the petitioner in a complaint case or the plaintiff in a civil proceeding to pay the deficit court fees. In no case, a proceeding should be dismissed for payment of inadequate court fees without affording a reasonable opportunity to the petitioner, complainant, or plaintiff to make good deficit court fees.

Further, if the petitioner accused wants to disputes those facts and statements, the said issues may be raised at the time of the trial of the cases. Hence, the orders taking cognizance of offences against the petitioners cannot be quashed. Furthermore, when the complainant alleges that a large sum of money (approximately ten crores of rupees) was to be paid to it through cheques and all the cheques bounced, the complaints should not be dismissed at the threshold. As a result, the cognizance taken by the Magistrate, cannot be quashed or set aside.

List of Cases Referred to

• • Padmabati Naik v. State of Orissa 2013 (IT) OLR 316 (para 5)
  • Eimco Elecon (India) Ltd. v. Mahanadi Coal Fields Ltd. [2011] 16 taxmann.com 135/110 SCL 622 (Ori.) (para 5)
  • Kailash Chandra Mishra v. Ajitsinh Ulhasrao Babar 2014 (I) OLR 211 (para 5)
  • State Bank of Travancore v. Kingston Computers (I) (P.) Ltd. [2011] 11 taxmann.com 172/107 SCL 377 (SC) (para 5)
  • A.C. Narayanan v. State of Maharashtra [2014] 47 taxmann.com 167/126 SCL 444 (SC) (para 5),
  • A.C. Narayanan v. State of Maharashtra [2015] 55 taxmann.com 118/130 SCL 32 (SC) (para 5)
  • Smt. Anita Chowdhary v. TRL Krosaki Refractories Ltd. 2017 (I) OLR 745 (para 5)
  • Vishwa Mitter of Vijay Bharat Cigarette Stores v. O.P. Poddar [1983] 4 SCC 701 (para 6)
  • National Small Industries Corpn. Ltd. v. State (NCT of Delhi) [2011] 3 taxmann.com 69 (SC) (para 6)
  • M.M.T.C. Ltd. v. Medchl Chemicals & Pharma (P.) Ltd. [2002] 39 SCL 270 (SC) (para 6)
  • Associated Cement Co. Ltd. v. Keshvanand [1998] 1 SCC 687 (para 6)
  • A.K. Singhania v. Gujarat State Fertilizer Co. Ltd. [2013] 40 taxmann.com 471/[2014] 123 SCL 189 (SC) (para 8)
  • Gunmala Sales (P.) Ltd. v. Anu Mehta [2014] 50 taxmann.com 351/[2015] 129 SCL 331 (SC) (para 8)
  • Munshi Abdul Maheraj Ali v. S.S. Marketing [2015] 60 OCR 172 (para 8)
  • Rajendra Kumar Sahoo v. Ramakanta Sahoo [2015] 60 OCR 206 (para 8)
  • M. Sreenivasulu Reddy v. K.S. Raghava Reddy [2003] 45 SCL 22 (AP) (para 8)
  • Samrat Shipping Co. (P.) Ltd. v. Dolly George [2002] 9 SCC 455 (para 8)
  • Rachappa Subrao Jadhav v. Shidappa Venkatrao Jadhav AIR 1918 PC 188 (para 11)
  • Dashrath Rupsingh Rathod v. State of Maharashtra [2014] 49 taxmann.com 497/128 SCL 26 (SC) (para 13)
  • L.P. Electronics (Orissa) (P.) Ltd. v. Tirupati Electro Marketing (P.) Ltd. 2013 (II) OLR 318 (para 16)
  • SMS Asia (P.) Ltd. v. TRL Krosaki Refractories Ltd. [CRLMC 1210 of 2017, dated 14-12-2017] (para 16)