1. Cheque dishonour — Complaint under Section 138, NI Act — Maintainability of complaint filed by power of attorney holder. (Para 2 , 3 , 11 )
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SUPREME COURT OF INDIA
Sudhansu Jyoti Mukhopadhaya, J
A.C. Narayanan – Appellant
Versus
State of Maharashtra – Respondent
Criminal Appeal No. 73 of 2007 | Criminal Appeal No. 1437 of 2013
Advocates:
VIKAS MEHTAASHA GOPALAN NAIR
VIKAS MEHTAASHA GOPALAN NAIR
A Power of Attorney holder can sign and file a complaint under Section 138 of the N.I. Act and depose on oath, provided they have personal knowledge of the transaction and such knowledge is explicitly asserted in the complaint.
Headnote:(A) Negotiable Instruments Act, 1881 - Sections 138, 142 and 145 - Code of Criminal Procedure, 1973 - Section 200 - Filing of complaint through Power of Attorney - Maintainability of criminal complaint filed by a Power of Attorney (POA) holder - Filing of complaint petition under Section 138 of N.I. Act through POA is legal and competent - POA holder can depose and verify on oath if they have witnessed the transaction as an agent or possess due knowledge regarding the transaction - Complainant must make a specific assertion regarding the POA holder's knowledge explicitly in the complaint - A POA holder without knowledge of the transaction cannot be examined as a witness - Magistrate can rely on the verification affidavit under Section 145 of N.I. Act and is not mandatorily obliged to examine the complainant upon oath for issuing process - Delegation of powers under a general POA to another person requires a specific permitting clause. (Paras 12, 13, 14 and 15)
Facts of the case:
In the first appeal, the appellant challenged the rejection of his application for discharge where the complaint was filed by a Power of Attorney holder, but the records did not contain the POA document nor did the complaint specifically assert the holder's knowledge of the transaction. In the second appeal, a company's employee signed the complaint and gave evidence, although the company's resolution only authorized Directors to file complaints or nominate persons to represent them, not to sign the complaint itself.
Findings of Court:
In the case of A.C. Narayanan, the court found that the Magistrate took cognizance without establishing the existence of a valid POA and the complaint did not abide by the legal requirements for POA-led filings. In the case of G. Kamalakar, the court found that an employee who is not empowered to sign the complaint cannot initiate proceedings, and the evidence provided by the witness was insufficient since he lacked actual authorization and knowledge.
Issues: Whether a Power of Attorney holder can sign, file, and verify a complaint under Section 138 of the N.I. Act on behalf of the payee, and the conditions under which such a holder can depose as a witness.
Ratio Decidendi: A Power of Attorney holder can initiate criminal proceedings on behalf of the principal, but they cannot file a complaint in their own name. For the POA holder to depose as a witness, they must have personal knowledge of the transaction, and this knowledge must be explicitly asserted in the complaint; otherwise, they cannot be examined.
Result: Appeals allowed.
Legal Category Hierarchy
- crime and sentencing
- practice and procedure
Table of Contents
2. Dispute over whether power of attorney holder can file complaint and depose, and whether complaint must be by payee or holder in due course. (Para 11 )
3. Power of attorney holder can file complaint and depose if having personal knowledge; explicit assertion of knowledge required in complaint. (Para 13 , 14 , 15 )
4. Filing complaint under Section 138, NI Act through power of attorney is legal; attorney must have personal knowledge of transaction. (Para 15 )
5. Appeals allowed; proceedings quashed in first case; acquittal restored in second case due to lack of proper authorization. (Para 19 , 20 , 21 )
6. Can a power of attorney holder sign and file a complaint under Section 138 of the Negotiable Instruments Act?
Yes, filing a complaint through a power of attorney holder is perfectly legal and competent. (Para 13 , 15 )
7. Can a power of attorney holder depose and verify on oath in a complaint under the NI Act?
Yes, but only if the attorney holder has personal knowledge of the transaction, which must be explicitly asserted in the complaint. (Para 14 , 15 )
8. Is a Magistrate bound to examine the complainant before issuing process under Section 200 of the CrPC for an NI Act offence?
No, the Magistrate may rely on the affidavit filed by the complainant and is not mandatorily obliged to examine the complainant. (Para 14 , 15 )
9. Can functions under a general power of attorney be sub-delegated to another person?
No, unless the power of attorney contains a specific clause explicitly permitting such sub-delegation. (Para 14 , 15 )
J U D G M E N T
SUDHANSU JYOTI MUKHOPADHAYA, J.
As the question of law involved is common in both the appeals, they are heard together and disposed of by this common judgment.
Criminal Appeal No.73 of 2007
2. Brief facts of the case are as follows: The accused-appellant,A.C. Narayanan challenged the common order dated 29th November, 2000 passed by the Additional Chief Metropolitan Magistrate, 9th Court, Bandra, Mumbai (hereinafter referred to as the, 'Trial Court') by filing applications u/s 482 of the Code of Criminal Procedure, 1973 before the High Court. By the said common order the applications preferred by the appellant-A.C.Narayanan for discharge/recalling process against him was rejected by the Trial Court. The High Court by impugned judgment dated 12th August, 2005, dismissed the applications preferred by the appellant and upheld the order passed by the Trial Court.
3. The appellant is the Vice-Chairman and Managing Director of the Company M/s Harvest Financials Ltd. (hereinafter referred to as the "Company") having its registered office at Bombay. Under a scheme of investment, the appellant collected various amounts from various persons in the form of loans and in consideration thereof issued post-dated cheques either in his personal capacity or as the signatory of the Company which got dishonoured.
4. Respondent No. 2-Mrs. Doreen Shaikh is the power of attorney holder of six complainants, namely Mr.Yunus A. Cementwalla, Smt. Fay Pinto, Mr. Mary Knoll Drego, Smt. Evelyn Drego, Mr. Shaikh Anwar Karim Bux and Smt. Gwen Piedade. On 16th December, 1997, Respondent No.2 on behalf of the six complainants filed Complaint Case Nos.292/S/1998, 293/S/1998, 297/S/1998, 298/S/1998, 299/S/1998 and 300/S/1998 respectively against the appellant herein under Sections 138 and 142 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the, 'N.I. Act') before the Trial Court. The said Respondent No. 2 verified the complaint in each of those cases as Power of Attorney Holder of the complainants. The Additional Chief Metropolitan Magistrate vide order dated 04th April, 1998 issued process against the appellant u/s 204 of the Cr.P.C for the offences punishable under Sections 138 and 142 of the N.I. Act.
5. The appellant, being aggrieved moved an application for discharge/recall of process in each of the complaints. The Trial Court vide common order dated 29th November, 2000 dismissed the applications filed by the appellant.
6. The appellant being aggrieved preferred applications being Criminal Application Nos.797, 798, 799, 801, 802 and 803 of 2002 before the High Court for calling for the records of the case pending in the Trial Court. By impugned order dated 12th August, 2005 the said applications were dismissed by the High Court.
Criminal Appeal No.1437 of 2013
7. The brief facts of the case is as follows: This appeal has been preferred by the accused-G. Kamalakar against the judgment and order dated 19th September, 2007 passed by the High Court of Judicature, Andhra Pradesh of Hyderabad in Criminal Appeal No. 578 of 2002. By the impugned judgment, the High Court allowed the appeal preferred by the 1st respondent-M/s Surana Securities Ltd. (hereinafter referred to as the 'Company') set aside the judgment of acquittal dated 30th October, 2001 passed by the XVIII Metropolitan Magistrate, Hyderabad in CC No.18 of 2000 convicted the appellant under Section 138 of the N.I. Act and sentenced the appellant to pay a fine of Rs. 6,10,000/-, out of which an amount of Rs. 6,00,000/- was to be paid to the complainant towards compensation and in default to suffer simple imprisonment for a period of one month.
8. The 1st respondent - M/s Surana Securities Ltd. is the complainant and is a limited Company carrying on business of trading in shares. The appellant-G. Kamalakar is the client of the 1st respondent-Company and used to trade in shares. During the course of business, the appellant-G. Kamalakar became liable to pay an amount of Rs.
