A three-judge bench
of the Supreme Court of India (“Supreme Court”) has clarified the position
regarding the filing of criminal petition through the holder of power of
attorney for an offence under Section 138 of Negotiable Instruments Act, 1881 (A.C. Narayanan
v. State of Maharashtra & Anr). The present case, which consisted
of a set of two criminal appeals, involved the issue whether, under
Section 138 and 142 of NI Act, a criminal petition can be filed by a person
through a power of attorney. While section 138 of NI Act makes one liable for
dishonour of cheque, section 142 of NI Act provides for the conditions before a
court can take cognizance of the offence under Section 138.
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The present matter was heard
by the Full Bench of the Supreme Court when a reference was made by a division
bench of the Court. According to the division bench, there was a difference of
opinion amongst various High Courts as also the decisions of the division benches
of the Supreme Court in M.M.T.C. and Anr. vs. Medchl Chemicals &
Pharma (P) Ltd. and Anr [2002 (1) SCC 234] and Janki Vashdeo Bhojwani
and Anr. vs. Indusind Bank Ltd. and Ors [2005 (2) SCC 217]. In M.M.T.C.
case (supra), it was held by the Supreme Court that no court can decline to
take cognizance on the sole ground that the complainant was not competent to
file the complaint. On other hand, in Janki Vashdeo case (supra), it was held
by the Court that under Order 3, Rules 1 and 2 of the Code of Civil Procedure,
1908 (“CPC”), the holder of power of attorney cannot depose for the principal
for the acts done by the principal.
In the present
appeals, the respective actions were brought by the the holders of power of
attorney to represent the affected parties. The courts below had decreed in
favour of them, and hence, the appellant-accused approached the Supreme Court.
It had been contended on behalf of the appellants that only two categories of
persons, i.e., the payee or the holder in due course of the cheque, are
entitled to make a complaint under Section 138. Since this has not been done in
the present cases, court could not take cognizance. It was further contended that
in matters where complainants have personal knowledge, the holders of power of
attorney are incompetent to depose on behalf of them. According to them, the
Power of Attorney holder is at best a witness to the execution of the Power of
Attorney and not to the contents of the complaint. In their next contention, it
was submitted on behalf of the appellants that, under Section 200 of the Code
of Criminal Procedure (“CrPC”), the Magistrate taking cognizance of an offence
on complaint shall examine upon oath the complainant. Section 200, according to
the appellants, is mandatory in nature and is meant to ascertain whether there
is a prima facie case against the accused. It was submitted that this
requires the presence of complainants.
Observing that there
is no pertinent conflict between judgments in M.M.C.T (supra) and Janki Vashdeo
(supra), Supreme Court was of the opinion that Section 200 of CrPC does not
create any embargo that the attorney holder cannot be a complainant. As these
are only the legal proceedings which are initiated by the holder of a power of
attorney, there is no mandate that same should be initiated by the complainant
himself. In other words, though attorney cannot file a complaint in his own
name as if he was the complainant, he can surely initiate the proceedings on
behalf of the principal. Court held that:
“From a conjoint
reading of Sections 138, 142 and 145 of the N.I. Act as well as Section 200 of
the Code, it is clear that it is open to the Magistrate to issue process on the
basis of the contents of the complaint, documents in support thereof and the
affidavit submitted by the complainant in support of the complaint.....”
That is, it is a
matter of discretion for magistrate to call upon the complainant before issuing
of the process. The issuing of the process can be done by the magistrate upon
the verification in the form of affidavit filed by the complainant in support
of the complaint under Section 138 of the N.I. Act. This, according to the
court, leads to the conclusion that the holder of a power of attorney ‘may’
also be allowed to file, appear and depose the complaint if he is personally
aware of the transactions. It was held that:
“...In
the light of the discussion, we are
of the view that the power of
attorney holder may be allowed to
file, appear and depose for the purpose
of issue of process for the offence
punishable under Section 138 of the N.I. Act. An exception to the
above is when the power of attorney
holder of the complainant does not have a personal knowledge
about the transactions then he cannot be examined. However, where the
attorney holder of the complainant is in charge of the business of the
complainant-payee and the attorney holder alone
is personally aware of the transactions,
there is no reason why the attorney holder cannot depose as a
witness.”
Yet another question
had arisen in the present case (second appeal) – “whether a person authorized
by a Company or Statute or Institution can delegate powers to their
subordinate/others for filing a criminal complaint?” Answering the
question, the court was of the opinion that the same would depend on the terms
of the general power of attorney, i.e., it must be explicitly mentioned in the
general power of attorney.
In conclusion, the
Court summed the position of law regarding the issues raised as follows:
(i)
Filing of
complaint petition under
Section 138 of
N.I 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 the complaint and the power of attorney holder
who has no knowledge regarding the transactions cannot be examined as a witness
in the case.
(iv)
In
the light of
section 145 of
N.I Act, it is open
to the Magistrate to rely upon
the verification in the form of affidavit filed by the complainant in support
of the complaint under Section 138 of the N.I Act and the Magistrate is neither
mandatorily obliged to call upon the complainant to remain present before the
Court, nor to examine the
complainant of his
witness upon oath
for taking the decision
whether or not to issue
process on the
complaint under Section 138 of the N.I. Act.
(v)
The functions under the general power of
attorney cannot be delegated to another person without specific clause
permitting the same in the power of attorney. Nevertheless, the general power
of attorney itself can be cancelled and be given to another person
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