The three Judge Bench of the Apex Court in A.C. Narayanan tagged Cri. Appeal No. 2724 of 2008 alongwith Criminal appeal No. 73 of 2007 and in terms of the reference order formulated the following questions:
15) In terms of the reference order, the following questions have to be decided by this Bench:
(i) Whether a Power of Attorney holder can sign and file a complaint petition on behalf of the complainant?/Whether the eligibility criteria prescribed by Section 142(a) of NI Act would stand satisfied if the complaint petition itself is filed in the name of the payee or the holder in due course of the cheque?
(ii) Whether a Power of Attorney holder can be verified on oath under Section 200 of the Code?
(iii) Whether specific averments as to the knowledge of the Power of Attorney holder in the impugned transaction must be explicitly asserted in the complaint?
(iv) If the Power of Attorney holder fails to assert explicitly his knowledge in the complaint then can the Power of Attorney holder verify the complaint on oath on such presumption of knowledge?
(v) Whether the proceedings contemplated under Section 200 of the Code can be dispensed with in the light of Section 145 of the N.I. Act which was introduced by an amendment in the year 2002?"
32. While deciding whether there was any conflict between the decision in M.M.T.C. Ltd. and Anr. Vs. Medchl Chemicals and Pharma (P) Ltd. and Anr. MANU/SC/0728/2001 : (2002) 1 SCC 234 and Janki Vashdeo Bhojwani and Anr. Vs. Indusind Bank Ltd. and Ors., MANU/SC/1030/2004 : (2005) 2 SCC 217 the Apex Court after considering the factual details and ultimate dictum laid down in both the decisions held as under:
"19. As noticed hereinabove, though Janki Vashdeo Bhojwani (supra), relates to powers of Power of Attorney holder under CPC but it was concluded therein that a plaint by a Power of Attorney holder on behalf of the original plaintiff is maintainable provided he has personal knowledge of the transaction in question. In a way, it is an exception to a well settled position that criminal law can be put in motion by anyone [vide Vishwa Mitter (supra)] and under the Statute, one stranger to transaction in question, namely, legal heir etc., can also carry forward the pending criminal complaint or initiate the criminal action if the original complainant dies [Vide Ashwin Nanubhai Vyas vs. State of Maharashtra MANU/SC/0101/1966 : (1967) 1 SCR 807. Keeping in mind various situations like inability as a result of sickness, old age or death or staying abroad of the payee or holder in due course to appear and depose before the Court in order to prove the complaint, it is permissible for the Power of Attorney holder or for the legal representative(s) to file a complaint and/or continue with the pending criminal complaint for and on behalf of payee or holder in due course. However, it is expected that such power of attorney holder or legal representative(s) should have knowledge about the transaction in question so as to able to bring on record the truth of the grievance/offence, otherwise, no criminal justice could be achieved in case payee or holder in due course, is unable to sign, appear or depose as complainant due to above quoted reasons. Keeping these aspects in mind, in MMTC (supra), this Court had taken the view that if complaint is filed for and on behalf of payee or holder in due course, that is good enough compliance with Section 142 of N.I. Act".
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23) 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. Nevertheless, an explicit assertion as to the knowledge of the Power of Attorney holder about the transaction in question must be specified in the complaint. On this count, the fourth question becomes infructuous.
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24) In view of the discussion, we are of the opinion that the attorney holder cannot file a complaint in his own name as if he was the complainant, but he can initiate criminal proceedings on behalf of his principal. We also reiterate that where the payee is a proprietary concern, the complaint can be filed (i) by the proprietor of the proprietary concern, describing himself as the sole proprietor of the "payee"; (ii) the proprietary concern, describing itself as a sole proprietary concern, represented by its sole proprietor; and (iii) the proprietor or the proprietary concern represented by the attorney holder under a power of attorney executed by the sole proprietor.
25) Similar substantial questions were raised in the appeal arising out of S.L.P. (Crl.) No. 2724 of 2008, which stand answered as above. Apart from the above questions, one distinct query was raised as to whether a person authorized by a Company or Statute or Institution can delegate powers to their subordinate/others for filing a criminal complaint? The issue raised is in reference to validity of sub-delegation of functions of the power of attorney. We have already clarified to the extent that the attorney holder can sign and file a complaint on behalf of the complainant-payee. However, whether the power of attorney holder will have the power to further delegate the functions to another person will completely depend on the terms of the general power of attorney. As a result, the authority to sub-delegate the functions must be explicitly mentioned in the general power of attorney. Otherwise, the sub-delegation will be inconsistent with the general power of attorney and thereby will be invalid in law. Nevertheless, the general power of attorney itself can be cancelled and be given to another person.
26) While holding that there is no serious conflict between the decisions in MMTC (supra) and Janki Vashdeo Bhojwani (supra), we clarify the position and answer the questions in the following manner:
(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."
33. It is sought to be contended that the reference in A.C. Narayanan (supra) was made in Criminal Appeal No. 73 of 2007, which was arising from a complaint filed by an individual person. Seeking to make distinction between complaints filed by juristic and non-juristic person, the learned counsel for the Complainant-company has sought to contend that the ratio laid down by the Apex court in A.C. Narayanan (supra) is not applicable to the complaints filed by a juristic person.
34. A plain reading of the judgment in A.C. Naraynan (supra) reveals that though the reference was in Criminal Appeal No. 73 of 2007, the Apex Court had tagged and heard Criminal appeal No. 2724 of 2008 along with criminal appeal No. 73 of 2007. The Criminal Appeal No. 2724 of 2008 relates to the complaint under section 138 of the NI Act filed by the Power of Attorney on behalf of the Company. The decisions in A.C. Narayanan (supra) MANU/SC/0934/2013 : 2014 AIR SC 630 and MANU/SC/0075/2015 : 2015 AIR SC 1198 reveal that both these appeals were heard together as they involved common question of law. Hence, the distinction sought to be drawn by the learned counsel Shri Yashpal Thakur is factually incorrect.
35. It is pertinent to note that in the aforesaid decision the Apex Court has interpreted Section 142(a) of the NI Act, which provides that no Court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque. This section prescribes the procedure for taking cognizance of offences punishable under Section 138 of the NI Act. This section which is an exception to the general rule that anyone can set the criminal law in motion, mandates that no court shall take cognizance of an offence under Section 138 of NI Act unless the complaint is made in writing by a payee or by a holder in due course, as the case may be.
36. It is thus, evident that the payee/holder in due course of the cheque is alone competent to file a complaint under section 138 of the N.I. Act. In case the payee is a company, the complaint should necessarily be filed in the name of the company. However, company being a juristic person it can act only through a representative authorised by the Board of Directors either by a resolution or by executing a power of attorney.
37. In A.C. Narayanan (supra), the Apex Court after considering the scope of Section 138, 142 and 145 of N.I. Act, has held that the payee or the holder in due course can authorise his constituted attorney to make a complaint under Section 138 of the Act and depose on oath before the Court provided constituted attorney has witnessed the transaction as an agent of the payee/holder in due course or possesses due knowledge of the transaction. It is to be noted that the Act does not prescribe a separate procedure for the complaints filed by juristic and non-juristic person. Furthermore, the Apex Court has not made any such distinction in A.C. Naraynan (supra). Hence, it is not possible to accept the contention of the learned counsel for the Complainant-company that the principles enunciated in the said decision are restricted only to the complaints filed by an individual person and not by a juristic person.
38. At this stage, it would also be advantageous to refer to the provisions under Sections 118(a) and 139 of the NI Act. Section 118(a) of the NI Act raises a presumption that until contrary is constituted attorney of the proved; every negotiable instrument was made or drawn for consideration, whereas Section 139 of the NI Act raises a presumption that unless the contrary is proved, the holder of the cheque received the cheque for the discharge of whole or part of any debt or liability. The presumptions under Sections 118(a) and 139 of the NI Act are rebuttable in nature. The presumption under these provisions need not be rebutted only by adducing direct evidence but can be rebutted on the basis of the facts elicited in the cross examination. Suffice it to say that the power of attorney will not be competent to depose in respect of a transaction of which he has no knowledge. As a result thereof, the accused will be precluded from effectively cross examining the power of attorney and eliciting the required material to dislodge the statutory presumption. It is therefore imperative that the power of attorney authorised by an individual or juristic person has knowledge of the transaction. In the light of above, the contention of the learned counsel Shri Yashpal Thakur that the power of attorney appointed by a juristic person need not have personal knowledge of the transaction needs to be rejected.
39. In my considered view, the principles laid down in A.C. Narayanan that the power of attorney who files complaint for the offence punishable under section 138 of NI Act and deposes on behalf of the payee must essentially have personal knowledge of the transaction are also applicable to complaints filed by a juristic person.
40. It is to be noted that there were divergent views between various High Courts on the question whether the power of attorney could depose on behalf of the principal. In Dr. Pradeep Mohanbhai Vs. Mingel Karlos Dais 2000 volume 102 (1) Bombay L.R. 908 this High Court has held that a power of attorney can file a complaint under section 138 of the NI Act but cannot depose on behalf of the complainant. He can only appear as a witness. Similar view was taken by the Rajasthan High Court in Shambhudatta Shastri Vs. State of Rajasthan MANU/RH/0397/1985 : 1986 (2) WLN 713 and Ramprasad Vs. Harinarayan & ORs MANU/RH/0233/1998 : AIR 1998 Rajasthan 185. Whereas a contrary view was taken by this High Court in Humberto Luis & Anr. Vs. Floriano Luis Armando Luis and Anr. MANU/MH/0240/2000 : 2000 (2) BOM.C.R. 754. The Apex Court in Janki Bhojwani vs. Indusind Bank Ltd. MANU/SC/1030/2004 : (2005) 2 SCC 217 has held that the view taken by the Rajasthan High Court in the case of Shamhudatta Shastri followed and reiterated in the case of Ramprasad is the correct view. The Apex Court has held that the view taken in the case of Floraino Luis cannot be said to have laid down a correct law and accordingly overruled the same. Thus, the controversy over the issue whether the power of attorney could file a complaint and whether he could depose on behalf of the complainant was set to rest by the Apex Court in Janki Bhojwani (supra). This decision clearly sets out that the power of attorney is entitled to file a complaint and depose provided he has personal knowledge of the transaction in question.
41. In A.C. Narayanan, (supra) the Apex Court while interpreting the provisions of section 142(a) and 145 which are procedural in nature and were already existing on the statute book as on the date of filing of the complaint, reiterated that the power of attorney is competent to file a complaint under section 138 of the NI Act and to depose before the Court provided he has knowledge of the transaction in question. The Apex Court has neither laid down a new proposition of law on the subject nor upset the settled position of law. The said decision also does not affect any vested or substantial right of the parties. Hence, there is no merit in the contention of the learned counsel Shri Yashpal Thakur that the principles enunciated in A.C. Narayanan (supra) operate prospectively and not retrospectively.
42. In Girish Jaggal (supra) the accused had sought quashing of proceedings under Section 138 of the NI Act on the ground that the complaint did not contain specific assertion that the power of attorney holder had the knowledge of the transaction. The Single Judge of this Court held that the defect if any, can always be rectified even at a subsequent stage and therefore the complaint cannot be quashed on the sole ground that the complaint does not contain a specific assertion as to the knowledge of transaction. In the present case, the Complainant-company had not tried to rectify the defect and the case has well passed the stage of rectification. Hence, the said Judgment is not applicable to the facts of the case.
IN THE HIGH COURT OF BOMBAY
Criminal Revision Application No. 432 of 2015
Decided On: 14.03.2017
Jaimin Jewellery Exports Pvt. Ltd. Vs. The State of Maharashtra and Ors.
Hon'ble Judges/Coram:
Anuja Prabhudessai, J.
Read full judgment here: Click here
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