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ALLAHABAD HIGH COURT
Suneet Kumar, J.
Yashpal Singh Chauhan —Applicant
versus
State of U.P. and Anr. —Opposite Party
Cr. Application No.12176 of 2016
Decided on 21.4.2016
Counsel for the Parties:
For the Applicant:Rakesh Kumar Mishra, Advocate
For the Opposite Party: S.K.Tyagi, G.A.
IMPORTANT POINT
Merely because an act has civil profile is not sufficient to denude it of its criminal outfit.
Headnote:Negotiable Instruments Act, 1881—Section 138—Criminal Procedure Code, 1973—Section 482—Dishonour of cheque—Quashing application—Complaint has been filed on behalf of complainant through power of attorney holder—Merely because an act has a civil profile is not sufficient to denude it of its criminal outfit—It is untenable that provision incorporated in agreement for referring disputes to arbitration is an effective substitute for a criminal prosecution when disputed act is an offence—Arbitration is a remedy for affording relief to party affected by breach of agreement but Arbitrator cannot conduct a trial of any act which amounted to an offence albeit same act may be connected with discharge of any function under agreement—Total sum sought to be recovered in execution of award is to the tune of Rs.2,26,62,000/-, whereas, cheque that was returned by bank is of Rs.50/- lac only, which would not decree—It cannot be said that both proceedings cannot be continued simultaneously—Application dismissed. (Paras 9 to 13)
Result: Application dismissed.
Suneet Kumar, J.—Sri S.K. Tyagi, Advocate has filed his vakalatnama on behalf of opposite party no. 2, is taken on record.
2. Heard learned counsel for the applicant, learned counsel for opposite party no. 2 and the learned A.G.A.
3. By means of the present application filed under Section 482 Cr.P.C., the applicant has prayed for quashing the proceeding of Complaint Case No.4343 of 2015 (Smt. Komal Bhasin v. Yashpal Singh Chauhan), under Section 138 of Negotiable Instruments Act, 1881 (for brevity ‘N.I. Act’), P.S. Kotwali, Kanpur Nagar pending in the court of Special Chief Judicial Magistrate, Kanpur Nagar.
4. Three fold argument has been advanced by the learned counsel for the applicant:
(i) The complaint under Section 138 N.I. Act could not have been filed by the power of attorney holder;
(ii) The applicant to satisfy the decree passed by the Arbitral Tribunal had issued the alleged cheques which subsequently bounced. The complainant has already approached the competent court for executing the decree, therefore, parallel proceeding under the N.I. Act to recover the sum due is misuse of process of court;
(iii) The applicant can avail one remedy, either to execute the decree or to proceed under Section 138 N.I. Act. Shri Tyagi, learned counsel appearing for opposite party no. 2 would contend that the power of attorney holder can file the complaint on behalf of the complainant, mere pendency of execution of an arbitral award would not preclude the opposite party no. 2 from availing the remedy under Section 138 N.I. Act, therefore, there is no illegality or infirmity in the order summoning the applicant.
5. Rival submission falls for consideration:
The record would reveal that opposite party no. 2 instituted the complaint upon dishonour of a cheque of Rs.50/- lac drawn by the applicant. The complainant would allege that in a dispute between the parties, the matter was referred to the arbitrator. A consent award for a sum of Rs.1,92,56,698/- was passed. The applicant failed to satisfy the award, consequently, opposite party no. 2 approached the Delhi High Court in execution proceedings. The execution court attached the property belonging to the applicant and directed for its auction. To avoid the auction, the applicant furnished an undertaking to pay Rs.2,26,62,000/-, accordingly, cheques were issued by the applicant for various sums including the amount mentioned herein above. It is alleged in the complaint that the applicant also furnished an undertaking that in the event of the cheque being dishonoured, it would be open to the opposite party to invoke the provision of N.I. Act, consequently, the present complaint was filed. Learned Magistrate upon considering the statement and material filed along with complaint, summoned the applicant.
6. A three Judge Bench of Supreme Court in A.C. Narayanan vs State of Maharashtra & another : 2014 (11) SCC 790, was called upon to answer as to whether a complaint under Section 138 N.I. Act can be instituted by a power of attorney holder, the Court held that the power of attorney holder can institute a complaint on behalf of the complainant but cannot institute the complaint in his own name.
7. After considering the relevant provisions of Negotiable Instruments Act and the relevant judgments on the point, the Court clarified the legal position and answered the question in the following manner.
“(i) Filing of complaint petition under Section 138 of NI Act through power of attorney is perfectly legal and competent.
(ii) The Power of Attorney holder can depose and verify on oath before the Court in order to prove the contents of the complaint. However, the power of attorney holder must have witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the said transactions.
(iii) It is required by the complainant to make specific assertion as to the knowledge of the power of attorney holder in the said transaction explicitly in t
