Reportable IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 1802  OF 2008 (Arising out of SLP(Crl.) No. 2009 of  2007)

National Small Industries Corporation Ltd. …...Appellant (s)

Vs. State (NCT of Delhi) & Ors. ... Respondent (s)

WITH

Crl. Appeal No.1803-1821/2008 (@ SLP(Crl.) Nos.7276-7294/2007)

 J U D G M E N T  

R. V. Raveendran J.  

Leave  granted.  Heard  the  counsel  for  the  parties.  The  following

question  of  law  arises  for  consideration  in  these  appeals  :  Where  a

complaint  in  regard  to  dishonour  of  a  cheque is  made by a Government

company, represented by its  officer  who is  a public  servant,  whether  the

exemption made under clause (a) of the proviso to section 200 of Code of

Criminal Procedure, (‘Code’ for short) is available?

Crl. Appeal No…………./2008 (@ SLP(Crl.) No.2009/2007)

2. The National Small Industries Corporation Limited (‘NSIC’ for short)

– the appellant herein, is a ‘government company’ within the meaning of

that expression under section 617 of the Companies Act, 1956. Its object is

to  extend  financial  and  other  assistance  to  small  scale  industries.  The

appellant lodged a complaint in the Court of the Metropolitan Magistrate,

Delhi,  alleging that  the second respondent company had issued a cheque

drawn in favour of the appellant, towards discharge of its liability, and the

said cheque was dishonoured when presented for payment. The appellant

therefore prayed for summoning and punishing the second respondent and

its Directors (respondents 3 and 4).  

3. On 4.2.2002, the learned Magistrate took cognizance and summoned

the accused. He did not examine the complainant and its witnesses, under

section 200 of the Code. He recorded the following reasons in that behalf :  

“Complaint has been filed by a public servant in discharge of his public duties. Hence his examination is dispensed with. I have perused the record and considered the submission. I have also perused the original documents also. I consider that prima facie case under Sections 138/142 of Negotiable Instruments Act is made out.”  

Respondents  2  to  4  filed  a  petition  under  section  482  of  the  Code

challenging the summoning order. They contended that as the complainant

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was a government company and not a public servant, the exemption under

clause (a) of the proviso to section 200 of the Code was not available; and

that  the learned Magistrate could not  have dispensed with the mandatory

requirement of examining the complainant on oath, under section 200 of the

Code.  The  High  Court  accepted  the  said  contention  on  the  following

reasoning :

“Public  servant  is  defined in  section  21  of  the  IPC and a  government company would not fall under any of the descriptions mentioned in the said section. Once it is held that NSIC is not a public servant, mandate of section 200 Cr.PC was to be followed by the learned MM, which provides compulsory examination of the complainant and the witnesses present, if any,  on  oath  and  on  the  basis  of  such  pre-summoning  evidence,  the Magistrate is to decide as to whether cognizance of the offence is to be taken and summons are to be issued to the accused persons or not. This is the  unambiguous  mandatory  procedure  prescribed  under  section  200 Cr.P.C.”  

Consequently,  by  order  dated  12.1.2007,  the  High  Court  allowed  the

petition and quashed the summoning order. It however made it clear that the

learned  Magistrate  would  be  at  liberty  to  record  the  statement  of  the

complainant  and the witnesses and thereafter  take appropriate decision in

the matter in accordance with     section 200 of the Code. The said order is

challenged in this appeal.

Contentions :

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4. The appellant company submitted that being an incorporeal person, it

acts through its officers. In the complaint lodged against respondents 2 to 4,

it is represented by its Development Officer, who is a public servant, and he

has signed the complaint on its behalf. The appellant contended that though

the appellant  was  the  de jure complainant,  its  Development  Officer  who

represents it in the complaint was the  de facto complainant; and when the

complaint  by  a  government  company  is  signed  and  presented  by  its

employee who is a public servant, it should be deemed to be a complaint by

such  public  servant  acting  in  the  discharge  of  his  official  duties.

Consequently, clause (a) of the proviso to section 200 of the Code would be

attracted and the Magistrate was not required to examine the complainant

and the witnesses,  on taking cognizance.  It  is  therefore contended that  a

complaint  by a  government  company represented  by its  officer  who is  a

public servant, should be treated as complaint by a public servant.    

5. On the other hand, the second respondent submitted that the wording

of clause (a) of the proviso to section 200 of the Code made it clear that the

Magistrate was not required to examine the complainant and the witnesses

only where the complaint  was  made in  writing  by :  (a)  a public  servant

acting or purporting to act in discharge of his official duties; and (b) a court.

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The second respondent contended that if the intention was to exempt such

examination  even where the  complainant  was  a  government  company or

statutory  corporation,  clause  (a)  would  have  read  :  “if  a  public  servant

acting or purporting to act in the discharge of his official duties, or a court,

statutory  corporation  or  Government  company,  has  made the  complaint”

instead of “if a public servant acting or purporting to act in the discharge of

his official duties or a court has made the complaint”. It is argued that the

use of the words “public servant acting or purporting to act in the discharge

of his official duties”, would show that the exemption is intended to apply

only  where  government  servants  or  employees  of  statutory  bodies  are

required to file complaints in the discharge of statutory duties.  Reference

was made by way of illustration to section 11 of the Essential Commodities

Act,  which provides that “No court  shall  take cognizance of any offence

punishable  under  the  Act  except  on  a  report  in  writing  of  the  facts

constituting  such  offence  made  by a  person  who  is  a  public  servant as

defined in section 21 of IPC…..”.  

6. The second respondent next contended that if all the employees of a

government company are public servants, the government company does not

become a public servant, as it has an identity distinct from its employees. In

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support  of  the  said  contention,  the  second  respondent  relied  upon  the

following  observations  in  State  Trading  Corporation  of  India  Ltd.  v.

Assistant Superintendent of Commercial Taxes [AIR 1963 SC 1811] :

“We are dealing here with an incorporated company. The nature of the personality of an incorporated company which arises from a fiction of law, must be clearly understood ….. Unlike an unincorporated company, which has no separate existence and which the law does not distinguish from its members, an incorporated company has a separate existence and the law recognizes it as a legal person separate and distinct from its members. This new legal personality emerges from the moment of incorporation and from that date the person subscribing to the memorandum of association and other persons joining as members are regarded as a body corporate or a corporation aggregate and the new person begins to function as an entity. But the members who form the incorporated company do not pool their status or their personality. If all of them are citizens of India the company does not become a citizen of India any more than if all are married the company would be a married person. The personality of the members has little to do with the persona of the incorporated company. The persona that comes into being is not the aggregate of the personae either in law or in metaphor.”

(emphasis supplied)

In reply, the learned counsel for appellant clarified that the appellant had

never contended that it was a public servant. The contention always was that

the employee who represented the appellant  in the complaint  was the  de

facto complainant and he being public servant, the exemption was available.

Legal provisions:

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7. Section 138 of the Negotiable instruments  Act (for short  ‘NI Act’)

provides that dishonour of a cheque for insufficiency of funds in the bank

account etc., is an offence punishable with imprisonment for a term which

may be extended to two years or with fine which may extend to twice the

amount of the cheque or with both. Section 142 of the NI Act provides that

notwithstanding  anything  contained  in  the  Code,  no  court  shall  take

cognizance  of  any  offence  punishable  under  section  138  except  upon  a

complaint in writing made by the Payee (or where it has been endorsed in

favour of another, the holder in due course) of the cheque.  

8. Section  190  of  the  Code  enumerates  the  various  modes  of  taking

cognizance of offences by Magistrates.  It  provides for taking cognizance

upon receiving a complaint of facts which constitutes such offence. Section

200 of the Code relates to examination of complainant. Relevant portion of

which reads as under :  

“200. Examination of complainant. – A Magistrate taking cognizance of an offence on complaint shall examine upon oath the complainant and the witnesses present, if any, and the substance of  such examination shall be reduced  to  writing  and  shall  be  signed  by  the  complainant  and  the witnesses, and also by the Magistrate :  

Provided that, when the complaint is made in writing, the Magistrate need not examine the complainant and the witnesses –  

(a) If a public servant acting or purporting to act in the discharge of his official duties or a court has made the complaint; or

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(b) xxxxx”

The term ‘public servant’ is not defined in the Code. However, section 2(y)

of the Code provides that words and expressions used but not defined in the

Code will have the meaning assigned to them under the Indian Penal Code.

Section 21 IPC defines  ‘public servant’, the relevant  portion of which is

extracted below :  

“21. ‘Public servant’.- The words “pubic servant” denote a person falling under any of the descriptions hereinafter following; namely –  

Twelfth  –  Every person  –  xxxxx  (b)  in  the  service  or  pay of  a  local authority, a corporation established by or under a Central, Provincial or State  Act  or  a  Government  company as  defined in  section  617 of  the Companies Act, 1956.”

Having regard to the aforesaid definition, it is clear that the appellant which

is a government company is not a ‘public servant’, but every employee of

the appellant is a ‘public servant’.  

The issue

9. The object of section 200 of the Code requiring the complainant and

witnesses to be examined, is to find out whether there are sufficient grounds

for  proceeding  against  the  accused  and  to  prevent  issue  of  process  on

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complaints which are false or vexatious or intended to harass the persons

arrayed  as  accused.  (See:  Nirmaljit  Singh  Hoon  vs.  The  State  of  West

Bengal – 1973 (3) SCC 753). Where the complainant is a public servant or

court,  clause (a) of proviso to section 200 of the Code raises an implied

statutory presumption  that  the  complaint  has  been made responsibly  and

bona  fide  and  not  falsely  or  vexatiously.  On  account  of  such  implied

presumption, where the complainant is a public servant, the statute exempts

examination of the complainant and the witnesses, before issuing process.

When an employee of a Government company or statutory corporation, who

is a  public servant, acts or purports to act in the discharge of his official

duties, it necessarily refers to doing acts done or duties discharged by such

public servant, for and on behalf of his employer, namely, the government

company/statutory corporation.  Any complaint  by a  public  servant  (if  he

happens to be an employee of a government company) acting or purporting

to act in the discharge of his official duties, can only be in regard to the

transactions  or  affairs  of  the  employer  company.  When  an  offence  is

committed in regard to a transaction of the Government company, it will be

illogical  to  say  that  a  complaint  regarding  such  offence,  if  made  by  an

employee acting for and on behalf of the company will have the benefit of

exemption under clause(a) of the proviso to section 200 of the Code, but a

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complaint  in  regard  to  very  same  offence,  if  made  in  the  name  of  the

company represented by the said employee, will not have the benefit of such

exemption.  The contention  of  the  second  respondent,  if  accepted,  would

mean  that  a  complaint  by  ‘The  Development  Officer,  NSIC’  as  the

complainant  can  avail  the  benefit  of  exemption,  the  same  complaint  by

‘NSIC represented  by  its  Development  Officer’  as  complainant  will  not

have the benefit of exemption. Such an absurd distinction is clearly to be

avoided.  

10. The term ‘complainant’ is not defined under the Code. Section 142 NI

Act requires a complaint under section 138 of that Act, to be made by the

payee (or by the holder in due course). It is thus evident that in a complaint

relating to dishonour of a cheque (which has not been endorsed by the payee

in favour of anyone), it is the payee alone who can be the complainant. The

NI Act only provides that dishonour of a cheque would be an offence and

the manner of taking cognizance of offences punishable under section 138

of that Act.  However,  the procedure relating to initiation of proceedings,

trial and disposal of such complaints, is governed by the Code. Section 200

of the Code requires that the Magistrate, on taking cognizance of an offence

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on complaint, shall examine upon oath the complainant and the witnesses

present and the substance of such examination shall be reduced to writing

and shall be signed by the complainant and the witnesses. The requirement

of  section  142  of NI Act that payee should be the complainant, is met if

the  

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complaint is in the name of the payee. If the payee is a company, necessarily

the complaint should be filed in the name of the company. Section 142 of NI

Act does not specify who should represent the company, if a company is the

complainant. A company can be represented by an employee or even by a

non-employee authorized and empowered to represent the company either

by a resolution or by a power of attorney.

11. Section 138 NI Act mandates that payee alone, whether a corporeal

person or incorporeal person, shall be the complainant. Section 200 of the

Code  contemplates  only  a  corporeal  person  being  a  complainant.  It

mandatorily  requires  the  examination  of  the  complainant  and  the  sworn

statement being signed by the complainant.  If section 142 of NI Act and

section  200  of  the  Code  are  read  literally,  the  result  will  be  :  (a)  the

complainant  should be the payee of  the cheque;  and (b) the  complainant

should be examined before issuing process and the complainant’s signature

should be obtained on the deposition. Therefore, if the payee is a company,

an  incorporeal  body,  the  said  incorporeal  body  can  alone  be  the

complainant. The mandatory requirement of section 200 of the Code is that

a Magistrate taking cognizance of an offence on complaint, shall examine

upon  oath  the  complainant,  and  that  the  substance  of  such  examination

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reduced to writing shall be signed by the complainant. An incorporeal body

can  obviously  neither  give  evidence  nor  sign  the  deposition.  If  literal

interpretation is applied, it would lead to an impossibility as an incorporeal

body is incapable of being examined. In the circumstances, a harmonious

and purposive interpretation of section 142 of NI Act and section 200 of the

Code  becomes  necessary.  Section  142  only  requires  that  the  complaint

should be in the name of the payee. Where the complainant is a company,

who will represent the company and how the company will be represented

in such proceedings, is not governed by the Code but by the relevant law

relating  to  companies.  Section  200  of  the  Code  mandatorily  requires  an

examination  of  the  complainant;  and  where  the  complainant  is  an

incorporeal  body,  evidently  only  an  employee  or  representative  can  be

examined  on  its  behalf.  As  a  result,  the  company  becomes  a  de  jure

complainant and its employee or other representative, representing it in the

criminal  proceedings,  becomes  the  de  facto complainant.  Thus  in  every

complaint,  where  the  complainant  is  an  incorporeal  body,  there  is  a

complainant  --  de jure, and a  complainant  --  de facto.  Clause (a)  of  the

proviso  to  section  200  provides  that  where  the  complainant  is  a  public

servant,  it  will  not  be  necessary  to  examine  the  complainant  and  his

witnesses. Where the complainant is an incorporeal body represented by one

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of  its  employees,  the  employee  who  is  a  public  servant  is  the  de  facto

complainant  and  in  signing  and  presenting  the  complaint,  he  acts  in  the

discharge of his official duties. Therefore, it follows that in such cases, the

exemption under clause (a) of the first proviso to section 200 of the Code

will be available.   

12. We  are  fortified  in  our  view  by  two  decisions  of  this  Court.  In

Associated Cement Co. Ltd. vs. Keshvanand [1998 (1) SCC 687], this Court

held as follows :

“Chapter XV of the new Code contains provisions for lodging complaints with  magistrates.  Section  200  as  the  starting  provision  of  that  chapter enjoins  on  the  Magistrate,  who  takes  cognizance  of  an  offence  on  a complaint,  to  examine  the  complainant  on  oath.  Such  examination  is mandatory as can be discerned from the words "shall examine on oath the complainant...". The Magistrate is further required to reduce the substance of such examination to writing and it "shall be signed by the complainant". Under Section 203 the magistrate is to dismiss the complaint if he is of opinion that there is no sufficient ground for proceeding after considering the said statement on oath. Such examination of the complainant on oath can be dispensed with only under two situations, one if the complaint was filed by a public servant, acting or purporting to act in the discharge of his official duties and the other when a court has made the complaint. Except under the above understandable situations the complainant has to make his physical presence for being examined by the magistrate. Section 256 or Section 249 of the new Code clothes the Magistrate with jurisdiction to dismiss the complaint when  the complainant is absent, which means his physical absence.

The above scheme of the new Code makes it clear that complainant must be a corporeal person who is capable of making physical presence in the court. Its corollary is that even if a complaint is made in the name of an incorporeal person (like a company or corporation) it is necessary that a natural person represents such juristic person in the court  and it  is that natural person who is looked upon, for all practical purposes, to be the complainant in the case. In other words, when the complainant is a body

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corporate it is the de jure complainant, and it must necessarily associate a human being as de facto complainant  to  represent  the former in court proceedings.”

(emphasis supplied)

In Municipal Corporation of Delhi vs. Jagdish Lal [1969 (3) SCC 389], the

facts  were  that  the  Delhi  Municipal  Corporation  had  by  a  resolution

authorized the Municipal Prosecutor to launch a prosecution under section

20  of  the  Prevention  of  Food  Adulteration  Act.  Accordingly,  one  S.S.

Mathur, the Municipal Prosecutor, filed a complaint against the respondent.

The  learned  Magistrate  acquitted  the respondent.  Section  417  of  the  old

Code  provided  that  where  an  order  of  acquittal  was  passed  in  any case

instituted upon complaint by the High Court granting special leave to appeal

from the order of acquittal on an application made to it by the complainant,

the  complainant  may  present  an  appeal  to  the  High  Court.  The  Delhi

Municipal Corporation made an application to the High Court  for special

leave under section 417 against the order of acquittal. The application was

granted.  When  the  appeal  came up  for  hearing,  the  respondent  raised  a

preliminary objection that as the complaint had been filed by S. S. Mathur,

the Municipal Prosecutor, he alone was competent to file the appeal and not

the Municipal Corporation. It was contended that as the application seeking

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leave was not filed by the complainant but by the Municipal Corporation,

the appeal itself was not maintainable. The said contention was negatived

by this Court. This Court expressed its inability to accept the contention that

as  S.S.Mathur,  Municipal  Prosecutor,  was  the  complainant,  the  Delhi

Municipal  Corporation  was  not  competent  to  make  an  application  for

special leave. This Court noted that S.S.Mathur, Municipal Prosecutor, filed

the complaint under the authority given to him under the resolution of the

Municipal  Corporation.  This Court  held that  in filing the complaint,  S.S.

Mathur  was not  acting on his  own personal  behalf  but  was acting as  an

agent of the Delhi Municipal Corporation and therefore, it must be deemed

that the Delhi Municipal Corporation was the complainant in the case; and

that as S.S. Mathur was only acting in a representative capacity and as the

Delhi  Municipal  Corporation  was  the  complainant,  the  application  for

special leave filed by the Municipal Corporation was properly instituted.  

13. Resultantly, when in a complaint in regard to dishonour of a cheque

issued in favour of a company or corporation, for the purpose of section 142

NI  Act,  the  company  will  be  the  complainant,  and  for  purposes  of

section  200  of  the  Code,  its  employee  who  represents  the  company  or

corporation, will be the de facto complainant. In such a complaint, the de

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jure complainant, namely, the company or corporation will remain the same

but  the  de  facto complainant  (employee)  representing  such  de  jure

complainant can change, from time to time.  And if the de facto complainant

is a public servant, the benefit of exemption under clause (a) of proviso to

section  200 of  the Code will  be  available,  even though the complaint  is

made in the name of a company or corporation.  

14. Thus, the answer to the question raised is :   

Where an incorporeal body is the payee and the employee who represents

such incorporeal body in the complaint is a public servant, he being the de

facto complainant, clause (a) of the proviso to section 200 of the Code will

be  attracted  and  consequently,  the  Magistrate  need  not  examine  the

complainant and the witnesses.  

The appeal is accordingly allowed, the order of the High Court is set aside

and summoning order of the Magistrate stands restored.  

Crl. Appeal No…………./2008 (@ SLP(Crl.) Nos.7276-7294/2007)

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Following the decision in the main matter, these appeals are allowed.  

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The  impugned  orders  of  the  High  Court  are  set  aside.  The  summoning

orders are restored.

…………………………..J [R. V. Raveendran]

………………………….J [Dalveer Bhandari]

New Delhi;  November 17, 2008.  

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