Complaint u/s 138 of NI Act filed by sole proprietor through power of attorney is maintainable

“7
The payee of the cheque is M/s
Shankar Finance & Investments. The
complaint is filed by “M/s. Shankar Finance &
Investments, a proprietary concern of Sri
Atmakuri Sankara Rao, represented by its
power of Attorney Holder Sri Thamada
Satyanarayana”. It is therefore evident that
the complaint is in the name of and on behalf
of the payee. Section 142(a) of the Act
requires that no Court shall take cognizance
of any offence punishable under section 138
except upon a complaint made in writing by
the payee. Thus the two requirements are
that (a) the complaint should be made in
writing (in contradistinction from an oral
complaint); and (b) the complainant should be
the payee (or the holder in due course, where
the payee has endorsed the cheque in favour
of someone else). The payee, as noticed
above, is M/s Shankar Finance &
Investments. Once the complaint is in the
name of the 'payee' and is in writing, the
requirements of section 142 are fulfilled. Who
should represent the payee where the payee
is a company, or how the payee should be
represented where payee is a sole
proprietary concern, is not a matter that is
governed by section 142, but by the general
law.”

CRIMINAL APPELLATE JURISDICTION

Mr. Dawoodali N. Israni,

WRIT PETITION NO.1091 OF 2008
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Versus
 State of Maharashtra

CORAM : RANJIT MORE, J.
DATED : January 16, 2013.
Citation;2013 ALL M R (CRI)1579

Petitioner has filed above petition under Article 227 of the

Constitution of India read with Section 482 of the Criminal Procedure
Code, 1908 challenging the legality and validity of the impugned order
dated 18th March, 2008 passed in Criminal Revision Application No.40 of
2008 by 9th Ad-hoc Additional Sessions Judge at Sewree, Gr.Bombay
whereby the said revision filed by respondent nos.2 to 4 was allowed and
the order of the learned Metropolitan Magistrate, 20 th Court, Mazgaon,
Mumbai in Criminal Case No.3574/SS/2007 issuing process against the
aforesaid respondents came to be set aside.

Petitioner is sole proprietor of M/s Eastern Enterprises, a
proprietary firm. Petitioner filed Criminal Case No. 3574/SS/2007 in 20th
Court of learned Metropolitan Magistrate,
Mazgaon, Mumbai against
respondent nos.2 to 4 (original accused) under the provisions of Section
138 read with Section 141 of the
It
Negotiable
Instruments Act,
1881.
is the case of petitioner that respondent no.2 is partnership firm and

respondent nos.3 and 4 are its partners and they are responsible for day-
to-day affairs and business of the said firm. It is alleged by petitioner
that respondent no.2 (partnership firm) placed the order for supply of
Alprol N32 of HPCL Oils of the contracted quality (hereinafter referred to
as “the said goods”). Petitioner, accordingly, forwarded bills/invoices to
respondent nos.2 to 4 for the delivery of said goods which were duly
accepted without any protest or demur as to its quality, quantity or
otherwise, the particulars of which are given in paragraph 6 of the

complaint. It is the case of the petitioner that towards discharge of the
legal debts and liabilities, respondent nos.3 and 4 issued a cheque on
behalf of their partnership firm bearing no.015801 dated 7th August, 2007
for the sum of Rs.9,03,454/- drawn on Centurion Bank Ltd. in favour of
it. Said cheque was deposited by petitioner through their bankers i.e.
Development Credit Bank Ltd. However, the same was dishonoured on
presentation with remarks “Funds Insufficient”. Petitioner thereafter
issued statutory notice dated 21st August, 2007 and demanded to pay
the dishonoured cheque's amount within 15 days from the date of receipt
of the said legal notice. Since payment was not received, the petitioner
filed a criminal complaint under Section 138 of the Negotiable
Instruments Act, 1881 before 20th Metropolitan Magistrate Court at
Mazgaon being Criminal Case No.3574/SS/07 within the statutory period

of limitation. The learned Magistrate after going through the complaint
and verification statement was pleased to pass an order issuing process
against respondent nos.2 to 4. This order was challenged by them in
revision before the Sessions Court and Sessions Court by the impugned
order allowed revision and set aside the order issuing process against
respondent nos.2 to 4. Sessions Court relied upon decision of the learned
Single Judge of this Court in Mr. Roy Joseph Creado and Ors. V/s
Shaikh Tamisuddin and Ors. In Criminal Application No.1653/03 and

held that the complaint is neither signed nor verified by the Sole
Proprietor of M/s Eastern Enterprises, a Sole Proprietorship Firm and the
same is defective and untenable.
The learned counsel for the petitioner pointed out that the

complaint is
filed by
M/s Eastern Enterprises, a Sole Proprietorship
Firm. She also invited my attention to the provisions of Section 141 of the
Negotiable Instruments Act, 1881 and contended that the learned
Sessions judge committed error in setting aside Magistrate's order issuing
process. She relied upon Apex Court's decision in Shankar Finance
and Investments v. State of A.P. 2009(4) ALL MR 480. Counsel for
respondent nos.2 to 4 on the contrary, supported the impugned order.
She submitted that the name of
sole proprietor of
M/s Eastern

Enterprise, a sole proprietary firm is not given in the cause title of the
complaint. She has also submitted that the special power of attorney Mr.
Haresh S. Kamdar has signed the complaint as complainant. Therefore,
complaint is defective and is not maintainable and the learned Sessions
Judge, therefore, rightly quashed and set aside the order issuing process
against respondent nos.2 to 4.
Having considered the rival submissions and having gone

through the impugned order alongwith the ratio of the decision of the
learned Single Judge of this Court in Mr. Roy Joseph Creado (Supra)
and the decision of the Apex Court
in M/s Shankar Finance &
Investments (Supra), I find merit in the above petition. Section 142(a) of
the Negotiable Instruments Act, 1881 maintains that no Court shall take
cognizance of any offence punishable under Section 138 except on a
complaint, in writing, made by the payee or, as the case may be, the
holder in due course of the cheque where the payee has endorsed the
cheque in favour of someone else. Perusal of the complaint shows that
the same is filed by said M/s Eastern Enterprise, a sole proprietary firm,
which is payee within the meaning of Section 142(a) of the Negotiable
Instruments Act, 1881. In this regard, the Supreme Court in Shankar
Finance and Investments (Supra) made following observations in

“7
The payee of the cheque is M/s
Shankar Finance & Investments. The
complaint is filed by “M/s. Shankar Finance &
Investments, a proprietary concern of Sri
Atmakuri Sankara Rao, represented by its
power of Attorney Holder Sri Thamada
Satyanarayana”. It is therefore evident that
the complaint is in the name of and on behalf
of the payee. Section 142(a) of the Act
requires that no Court shall take cognizance
of any offence punishable under section 138
except upon a complaint made in writing by
the payee. Thus the two requirements are
that (a) the complaint should be made in
writing (in contradistinction from an oral
complaint); and (b) the complainant should be
the payee (or the holder in due course, where
the payee has endorsed the cheque in favour
of someone else). The payee, as noticed
above, is M/s Shankar Finance &
Investments. Once the complaint is in the
name of the 'payee' and is in writing, the
requirements of section 142 are fulfilled. Who
should represent the payee where the payee
is a company, or how the payee should be
represented where payee is a sole
proprietary concern, is not a matter that is
governed by section 142, but by the general
law.”
paragraph 7 which are as follows:
Perusal of the above observations of the Supreme Court shows that in
order to take cognizance of an offence under Section 138, two
requirements are required to be complied with namely, the complaint
should be made in writing and the complainant should be the payee.
Apex Court further observed that who should represent the payee where

the payee is a sole proprietary concern, is not a matter that is governed

by Section 142, but by the general law.
This decision of the Apex Court is squarely applicable to the
facts and circumstances of the present case and, therefore, complaint in
present form is maintainable. The learned Single Judge of this Court in
Mr. Roy Joseph (Supra) relying upon the provisions of Section 200 of
Code of Criminal Procedure, 1973 held that complaint under Section 138
In view of the Apex Court's decision
in Shankar
the complainant.

of the Negotiable Instruments Act, 1881 must be signed and verified by
Finance and Investments (Supra), decision of the learned Single Judge
of this Court in Roy Joseph is no longer a good law. Another learned
Single Judge of this Court in Smt. Durgadevi v. Shalikram Vitthalrao
Korde and another 2010(1) Crimes 566 (Bom.) also held that the
decision of the learned Single Judge of this Court in Mr. Roy Joseph
(Supra) in view of the subsequent judgment of the Supreme Court in
Shankar Finance and Investments (Supra), is no longer a good law.
7
Counsel for respondent nos.2 to 4 submitted that in the cause
title of the complaint, complainant M/s Eastern Enterprises is not
described as a sole proprietorship firm. She also stated that the special

power of attorney holder Mr. Haresh S. Kamdar has signed the
complaint as complainant. Submission has no merit in view of the fact
that complainant in paragraph 1 of the complaint has stated that the
complainant M/s Eastern Enterprises is sole proprietorship firm having its
registered office at 21, Aliabad, Aga Hall, Nesbit, Mumbai-400 010. In
paragraph 2, averment is made that the present complaint is filed by Mr.
Haresh S. Kamdar, the constituted attorney of the complainant firm, who
has personal knowledge of facts of the case and is able to depose the

same before this Court. Copy of the Special Power of Attorney is
Dawoodali N.
annexed with the complaint. Special Power of Attorney shows that
Israni is the sole proprietor of the complainant
M/s
Eastern Enterprises, a Sole Proprietorship Firm and he has given power
of attorney to Mr. Haresh S. Kamdar to engage or appoint
counsel/advocate to conduct the case and to appear and/or prosecute
the above legal proceedings against respondent nos.2 to 4. Verification
of the complaint is done by Mr. Haresh S. Kamdar and he has described
himself as the Constituted
Attorney of the complainant. In these
circumstances, I do not find any merit in the submissions of the learned
counsel for respondent nos.2 to 4 that the complaint is defective. Order of
the Magistrate issuing process in the petitioner's complaint was set aside
by the revisional Court
on the sole ground that the complaint is not

signed and verified

by the complainant. The Sessions Judge while
setting aside the order of issue of process solely relied upon judgment of
the learned Single Judge of this Court in Mr. Roy Joseph (Supra) ,
which is no longer a good law in view of the Apex Court's decision in
Shankar Finance and Investments (Supra).
The impugned order,
therefore, deserves to be quashed and set aside. Petition is, therefore,
disposed of by passing the following order:

Rule is made absolute in terms of prayer clause (a).
The concerned learned Metropolitan Magistrate now shall

proceed with the complaint filed by the petitioner and dispose of the
same on merits. Since criminal case is filed as long as back in 2007, the

learned Magistrate is directed to dispose of the same expeditiously.