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2022 Supreme(Kar) 850

IN THE HIGH COURT OF KARNATAKA
H.P. Sandesh, J.
Anuradha Bharath - Appellant
Versus
M/s. I.t.m.s. And Company & Ors. - Respondents
Criminal Appeal No. 909, 910 of 2010
Decided On : 25-03-2022

Advocates appeared:
K.R. Ashok Kumar, Advocate, M.J. Alva, Advocate

The main legal point established in the judgment is that the initiation of criminal prosecution without the power of attorney and the subsequent production of power of attorney of the year 2006 vitiates the proceedings.

Headnote:

Negotiable Instruments Act - Acquittal Judgment - Sections 138, 142 - The court discussed the validity of the complaint filed by the general power of attorney holder, the requirement of the power of attorney to be accompanied with the complaint, and the admissibility of evidence based on subsequent power of attorney. The court found that the complaint filed without the power of attorney and the subsequent production of power of attorney of the year 2006 vitiates the initiation of criminal prosecution. The court dismissed the appeals and the applications filed under Section 391 of Cr.P.C.

Fact of the Case:

The appeals were filed against the judgment of acquittal in two cases under the Negotiable Instruments Act. The complaints were filed by the power of attorney holder, and the court considered the validity of the complaints and the admissibility of evidence based on subsequent power of attorney.

Finding of the Court:

The court found that the complaints filed without the power of attorney and the subsequent production of power of attorney of the year 2006 vitiates the initiation of criminal prosecution. The court dismissed the appeals and the applications filed under Section 391 of Cr.P.C.

Issues: The issues included the validity of the complaints filed by the power of attorney holder, the requirement of the power of attorney to be accompanied with the complaint, and the admissibility of evidence based on subsequent power of attorney.

Ratio Decidendi: The court held that the complaints filed without the power of attorney and the subsequent production of power of attorney of the year 2006 vitiates the initiation of criminal prosecution. The court also found that the appellant was not diligent in producing the power of attorney and committed a blunder in relying on the subsequent power of attorney.

Final Decision: The court dismissed the appeals and the applications filed under Section 391 of Cr.P.C.

Judgement Key Points

Key Points: - Complaint filed without the required power of attorney vitiates the initiation of criminal prosecution (!) (!) (!) (!) . - Evidence based on a subsequently produced power of attorney is not admissible in law (!) (!) (!) . - The trial court correctly acquitted as the complaint and evidence lacked proper authorization under the procedure (!) (!) (!) .

What is the effect of filing a complaint without the required power of attorney under the Negotiable Instruments Act?

How to determine the validity of evidence produced by a power of attorney holder in criminal proceedings?

What procedural defects invalidate the initiation of criminal prosecution under Cr.P.C.?


JUDGMENT

H.P. Sandesh, J. - These two appeals are filed against the judgment of acquittal dated 08.07.2010 passed in C.C.No.18361/2003 and C.C.No.15159/2004 and sought for an order to convict the respondents for the offence punishable under Sections 138 and 142 of the Negotiable Instruments act and award the compensation double the value of the subject matter of the cheque and pass such other orders.

2. These two appeals are considered together as the respondents are acquitted before the Trial Court only on the ground that the complaint filed by the general power of attorney holder is not just and proper and hence these two matters are taken up together for common disposal since common question is involved in the matter.

3. The factual matrix of the case in C.C.No.18361/2003 is that respondent No.1 is a partnership firm represented by its partners 2 to 5 and all of them are actively participating in the day-to-day activities of the business since it is a family business. accused Nos.2 to 5 approached the complainant for financial assistance for payment of money to procure asphalt from M/s. PEC Ltd., and also for payment to the Commissioner of Central Excise and Customs, Chennai and to lift the asphalt stored in the godown at Chennai. It is contended that the accused have jointly borrowed money from the complainant from time to time. In confirmation of the amount so borrowed from the complainant from time to time plus the interest accrued thereon, accused Nos.2 and 3 for and on behalf of accused No.1 have jointly executed an on demand promissory note and consideration receipt dated 01.07.2002 for an amount of Rs.18,60,000/- in favour of the complainant with an endorsement 'amount taken from time to time with interest' agreeing to repay the same with interest at 2% per annum. In discharge of the said outstanding amount, accused No.2 as partner of accused No.1 has issued a cheque dated 01.07.2003 for Rs.18,60,000/- and the said cheque was returned with an endorsement 'account closed' and hence the legal notice was issued and the same was returned with an endorsement 'information delivered on 08.08.2003 - not claimed'. The notice was also sent through certificate of posting and the same was received by the accused. Inspite of the demand, the amount was not paid and hence the complaint is filed through the power of attorney holder.

4. In C.C.No.15159/2004, the case of the complainant/appellant herein before the Trial Court is in the same line of pleading as in C.C.No.18361/2003. It is contended that in discharge of the outstanding amount, the accused issued a cheque dated 01.07.2002 for a sum of Rs.30,74,000/- in favour of the complainant and when the same was presented, it was returned with an endorsement 'account closed' and thereafter legal notice dated 22.07.2003 was issued through RPaD and certificate of posting and notice sent through RPaD was returned with an endorsement 'information delivered on 08.08.2003 - not claimed' and notice sent through certificate of posting was served and he did not comply with the demand. Hence, the complaint is filed through power of attorney holder.

5. The relevant documents were placed before the Trial Court and cognizance was taken and thereafter on behalf of the complainant in C.C.No.18361/2003, the power of attorney holder was examined as P.W.1 and got marked the documents at Exs.P.1 to 27. The accused also examined himself as D.W.1 and got marked the documents at Exs.D.1 to 50. In C.C.No.15159/2004, the power of attorney holder was examined as P.W.1 and got marked the documents at Exs.P.1 to 27. The accused is examined as D.W.1 and got marked the documents at Exs.D.1 to 42. The Trial Court after considering the material on record, raised the common points for consideration: (1) Whether the complaint filed by the general power of attorney holder is just and proper (2) Whether the complainant proves that accused No.2 has issued cheque marked as Ex.P.4 towards legally recoverable debt? (3) Whether

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