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Thursday, January 29, 2015

General Power of Attorney given by the complainant Company. The complaint was not signed either by Managing Director or Director of the Company. It is also not in dispute that PW-1 is only the employee of the Company. As per Resolution of the Company i.e. Ex.P3 under first part Managing Director and Director are authorized to file suits and criminal complaints against the debtors for recovery of money and for prosecution. Under third part of the said Resolution they were authorized to appoint or nominate any other person to appear on their behalf in the Court and engage lawyer etc. But nothing on the record suggest that an employee is empowered to file the complaint on behalf of the Company. This apart, Managing Director and Director are authorized persons of the Company to file the complaint by signing and by giving evidence. At best the said persons can nominate any person to represent themselves or the Company before the Court. In the present case one Shri Shankar Prasad employee of the Company signed the complaint and the Deputy General Manager of the Company i.e. PW-1 gave evidence as if he knows everything though he does not know anything. There is nothing on the record to suggest that he was authorized by the Managing Director or any Director. Therefore, Magistrate by judgment dated 30th October, 2001 rightly acquitted the appellant. In such a situation, the case of the appellant is fully covered by decision by the larger bench of this Court passed in the present appeal. We have no other option but to set aside the impugned judgment dated 19th September, 2007 passed by the High Court of Judicature, Andhra Pradesh at Hyderabad in Criminal Appeal No.578 of 2002. The judgment and order dated 30th October, 2001 passed by the Court of XVIII Metropolitan Magistrate, Hyderabad in C.C.No.18 of 2000 is upheld. 21. The appeals are allowed accordingly.

                                                                  REPORTABLE
                        IN THE SUPREME COURT OF INDIA
                       CRIMINAL APPELLATE JURISDICTION
                        CRIMINAL APPEAL NO.73 OF 2007
A.C. NARAYANAN                                     ... APPELLANT
                                     V/s
STATE OF MAHARASHTRA & ANR.                        ... RESPONDENTS
                                    With
                      CRIMINAL APPEAL NO.1437  OF 2013

SHRI G. KAMALAKAR                                         ... APPELLANT
                                     V/s
M/S SURANA SECURITIES LTD. & ANR.                   ... RESPONDENTS

                               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.  7,21,174/-  towards   the
respondent-Company.   In  order  to  discharge  the  said  liability,    the
appellant issued six cheques amounting to Rs. 1,00,000/-  each  and  another
cheque for Rs. 1,21,174/- of  different dates.     When  first  six  cheques
were presented  for  encashment  on  18th  September,  1997,  the  same  got
dishonoured with an endorsement "funds insufficient".  Upon  receiving  such
information, the Company issued a legal notice to the appellant to  pay  the
amount but the same was not paid by the appellant.
9.    The Board of Directors of the 1st respondent-Company, by a  resolution
authorized its Managing Director  to  appoint  an  agent  to  represent  the
Company.  Pursuant thereto, one Shri V. Shankar Prasad was appointed  as  an
agent by executing a General Power of Attorney.   Later, he was  substituted
by one Shri Ravinder Singh under another  General  Power  of  Attorney.  The
respondent-Company filed a complaint under  Section  138  of  the  N.I.  Act
being CC No. 1098 of 1997 in the  Court  of  XIth  Metropolitan  Magistrate,
Secunderabad.  The  complaint  was  transferred  to  the  Court  of  XVIIIth
Metropolitan Magistrate, Hyderabad by order dated  3rd  May,  2000  and  was
registered as CC No. 18 of 2000.  By judgment dated 30th October, 2001,  the
Metropolitan Magistrate dismissed the complaint  filed  by  the  respondent-
Company u/s 138 of the N.I. Act.
10.   Aggrieved by the said order, respondent-Company filed an appeal  being
Criminal No. 578 of  2002  before  the  High  Court  of  Judicature,  Andhra
Pradesh at Hyderabad. By the impugned judgment dated 19th  September,  2007,
the High Court allowed  the  appeal,  set  aside  the  judgment  dated  30th
October, 2001 passed by the XVIIIth Metropolitan Magistrate,  Hyderabad  and
convicted the appellant u/s 138 of  the  N.I.  Act.  Against  the  aforesaid
order of conviction, the present appeal has been preferred.
11.   On 4th January, 2007, in view  of  the  difference  of  opinion  among
various High courts as also decisions of this Court  in  M.M.T.C.  Ltd.  and
Anr. vs. Medchl Chemicals and 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 referred the matter to larger bench. The entire order  of  reference
reads as under:
      "Delay in filing counter affidavit is condoned.
      Leave granted.
      Interpretation and/or application of Section 142(a) of the  Negotiable
Instruments Act, 1881, ("NI Act")  is  in  question  in  this  appeal  which
arises out of a judgment and order  dated  12.8.2005  passed  by  a  learned
Single Judge of the High Court of Judicature at Bombay.

      The basis fact of the matter is not in dispute.
      Several cheques on  different  dates  were  issued  by  the  applicant
herein  which were dishonoured.  The complaint petitions  in  the  Court  of
Additional Chief Metropolitan Magistrate, Bandra,  Mumbai.    The  complaint
petitions were filed in the name of the respective payees of   the  cheques.
She also filed affidavits in support of the  averments  made  in  the   said
complaint petitions.   Cognizance of offence under Section 138 of  the  N.I.
Act was taken against the appellant.  Summons  were  issued.     Questioning
the order issuing summons by the  learned  Magistrate  in  exercise  of  his
power under Section 204 of  the  Code  of  Criminal  Procedure,    appellant
herein filed criminal application before  the High Court  of  Judicature  at
Bombay,  inter alia,   contending that the complaint petitions filed by  the
Power of Attorney Holder was not maintainable and relying  thereupon  or  on
the basis  thereof the learned Magistrate could  not  have  issued  summons.
The said contention has been negative by the  High  Court  in  its  impugned
judgment.
In the aforementioned premises interpretation of  Section  142  (a)  of  the
N.I. Act comes up for consideration  before  us.   We  may  notice  that  in
M.M.T.C. and Anr. vs. Medchl Chemicals & Pharma (P) Ltd.  and  Anr.  (2002)1
SCC 234,  a Division Bench of  this Court has opined.:
      "This Court has,  as far  back as,  in the case of  Vishwa  Mitter  v.
O.P. Poddar,  (1983) 4 SCC 701 held that it is clear  that  anyone  can  set
the Criminal law in motion by filing a complaint of  facts  constituting  an
offence before a Magistrate entitled to take cognizance on the  sole  ground
that the complainant was not competent to file the complaint.   It has  been
held that if any special statute prescribes offences and makes  any  special
provision for taking cognizance of such offences under the  statute,    then
the complainant requesting the Magistrate to take cognizance of  the  office
must satisfy the eligibility criterion prescribed by the statute.    In  the
present case,  the  only eligibility criteria prescribed by Section  142  is
that the  complaint must be  by the payee  or  the  holder  in  due  course.
This criteria is satisfied as the complaint is in the name and on behalf  of
the appellant Company"
However,  in a later  judgment  in  Janki  Vashdeo  Bhojwani  and  Anr.  vs.
Indusind Bank Ltd. and  Ors.  ,  2005(2)SCC  217,   albeit  in  a  different
context,  another Division Bench of this Court  overruled  the  judgment  of
the  Bombay  High  Court  in  Pradeep  Mohanbay  vs.  Minguel  Carlos  Dias,
[2000(1)Bom.L.R.908), inter alia opining as follows:

      "Order 3 Rules 1 and 2 CPC empowers the holder of  power  of  attorney
to 'act' on behalf of the  principal.  In our view the word 'acts'  employed
in Order 3 Rules 1 and 2 CPC confines only to in respect of 'acts'  done  by
the  power-of-attorney  holder  in   exercise  of  power  granted   by   the
instrument.   The term 'acts'  would  not  include  deposing  in  place  and
instead of the principal.  In other words,  if the power of attorney  holder
has rendered some 'acts' in pursuance of power of attorney,  he  may  depose
for the principal in respect of such acts, but  he  cannot  depose  for  the
principal  for  the  acts   done  by  the  principal   and   not   by   him.
Similarly,  he cannot depose for the principal in respect of the  matter  of
which only the principal is entitled to be cross-examined."

      "on  the  question  of  power  of  attorney,   the  High  Courts  have
divergent views.     In the case  of  Shambhu  Dutt  Shastri  vs.  State  of
Rajasthan [1986 2 WLN 713 (Raj.)]  it was  held  that  a  general  power-of-
attorney holder can appear, plead and act on behalf  of  the  party  but  he
cannot become a witness on behalf of the  party.   He  can  only  appear  in
his own witness box on behalf of himself.   To appear in a  witness  box  is
altogether a different act. A general  power-of-attorney  holder  cannot  be
allowed to appear as a witness on behalf of the plaintiff  in  the  capacity
of the plaintiff."
      "However, in the  case  of  Humberto  Luis  v.  Gloriano  Armado  Luis
[(2002) 2 Bom. CR 754)  on which reliance has been placed  by  the  Tribunal
in the present case,  the High Court took a dissenting view  and  held  that
the provisions contained in Order 3  Rule  2  CPC  cannot  be  construed  to
disentitle  the  power-of-attorney  holder  to  depose  on  behalf  of   his
principal. The High Court further held that  the  word  'act'  appearing  in
Order 3 Rule 2 CPC takes within its sweep 'depose'. We are unable  to  agree
with this view taken by the Bombay High
Court in Floriano Armando."

      It is not in dispute that there is  a  conflict  of  opinion  on  this
issue amongst various High Courts, including the  decision  of  Bombay  High
Court  in  Mamtadevi  Prafullakumar  Bhansali  vs.  Pushpadevi  Kailashkumar
Agrawal & Anr.   [2005 (2) Mah. L.J. 1003)  on the one hand and  a  decision
of the Andhra Pradesh High Court in S.P. Sampathy vs. Manju Gupta  and  Anr.
(2002) Crl.L.J. 2621),  on the other.  One  of  the  questions  which  would
arise  for  consideration  is  as  to  whether  the   eligibility   criteria
prescribed by Section 142(a)  of the 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 and/or whether a complaint  petition has  to  be
presented before the Court  by  the  payee  or  the  holder  of  the  cheque
himself.
Another issue which would arise for consideration  is  as  to   whether  the
payee must examine himself in support of the  complaint petition keeping  in
view the insertion of Section 145 of the Said Act (Act No. 55 of 2002).
      In our opinion, in view of difference of opinion amongst various  High
Courts as also the decisions of this Court in  M.M.T.C.  Ltd.  (Supra)   and
Janki Vashdeo Bhojwani (supra),  particularly in view of the  fact  that  in
the  later  case  the  earlier  one  was  not  noticed,   an   authoritative
pronouncement is necessary to be given in this regard.   We, therefore,  are
of the opinion that the matter should be considered by a larger Bench."

12.   The matter was considered by a  larger  Bench  of  three  Judges.   By
judgment dated 13th September, 2013 reported in 2013 (11) SCALE 360  -  A.C.
Narayanan vs.  State  of  Maharashtra  the  said  larger  Bench  framed  the
following questions:
      (i)   Whether  a  Power  of  Attorney  holder  can  sign  and  file  a
complaint petition  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 varied 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?

13.   The first question relating to the eligibility of  Power  of  Attorney
holder to sign and file a complaint petition on behalf of  the  complainants
and whether eligibility criteria prescribed by Section 142(a) of   N.I.  Act
is satisfied, if the  complaint petition itself is  filed  in  the  name  of
the payee or the holder in due  course  of  the  cheque,   was  answered  by
larger Bench in affirmative by its judgment in A.C. Narayanan vs.  State  of
Maharashtra, 2013(11) Scale 360 with observation, which reads as follows:
"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  (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  21
Page 22 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. "

14.   The second question relating to  verification  of  Power  of  Attorney
holder on oath as prescribed under Section 200 of the Code was  answered  as
follows:-
"20) The stand of the appellant in Criminal Appeal No. 73 of  2007  is  that
no complaint can be filed and no cognizance of the complaint  can  be  taken
if the complaint is by the power of attorney holder,  since  it  is  against
Section 200 of the Code and deserves to be rejected.  There  is  no  dispute
that complaint has to  be  filed  by  the  complainant  as  contemplated  by
Section 200 of the Code, but the said Section does not  create  any  embargo
that  the  attorney  holder  or  legal   representative(s)   cannot   be   a
complainant.

22) 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. Once the complainant  files  an   affidavit  in
support of the complaint before issuance of the process  under  Section  200
of the Code, it is  thereafter open to the Magistrate, if he thinks fit,  to
call upon the complainant to remain present and to examine  him  as  to  the
facts contained in the affidavit submitted by  the  complainant  in  support
of his complaint. However, it is a matter of discretion and  the  Magistrate
is not bound to call upon the  complainant  to  remain  present  before  the
Court and to examine him upon oath for taking decision  whether  or  not  to
issue process on the complaint under Section 138 of the N.I.  Act.  For  the
purpose of issuing process under Section 200 of the Code, 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. It  is  only  if  and  where  the  Magistrate,  after  considering  the
complaint under Section 138 of the N.I. Act, documents  produced in  support
thereof and the verification in the form of affidavit  of  the  complainant,
is of the view that examination of the  complainant  or  his  witness(s)  is
required, the Magistrate may call upon the  complainant  to  remain  present
before the Court and examine the complainant and/or his  witness  upon  oath
for taking a decision whether or not  to  issue  process  on  the  complaint
under  Section 138 of the N.I. Act.

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.

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."

15.   While holding that there is no serious conflict between the  decisions
in "MMTC (supra) and Janki  Vashdeo  Bhojwani  (supra)",  the  larger  Bench
clarified the position and answered the questions framed  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."


Case of A.C. Narayanan

16.   In this case Magistrate had taken cognizance of the complaint  without
prima facie establishing the fact  as  to  whether  the  Power  of  Attorney
existed in first place and whether it was in order. It  is  not  in  dispute
that the complaint against the appellant was not preferred by the  payee  or
the holder in due course and the statement on oath of the person  who  filed
the complaint has also not stated that he filed the  complaint  having  been
instructed by the payee or holder in due course of  the  cheque.  Since  the
complaint was not filed abiding with the provisions of the Act, it  was  not
open to the Magistrate to take cognizance.
17.   From the bare perusal of the said  complaint,  it  can  be  seen  that
except mentioning in the cause title there is no mention of, or a  reference
to the Power of Attorney in the body  of  the  said  complaint  nor  was  it
exhibited as part of the said complaint. Further, in the  list  of  evidence
there is just a mere mention of the words at serial  no.6   viz.  "Power  of
Attorney", however there is no date or any other particulars  of  the  Power
of Attorney mentioned in the complaint. Even in the  verification  statement
made by the respondent no.2, there is not even a whisper that she is  filing
the complaint as the Power of Attorney holder of the complainant.  Even  the
order of issue of process dated 20th February, 1998 does  not  mention  that
the Magistrate had perused any Power of Attorney for issuing process.
18.   The appellant has  stated  that  his  Advocate  conducted  search  and
inspection of the papers and  proceedings  of  the  criminal  complaint  and
found that no Power of Attorney was found to be a part of that record.  This
has not been disputed by the respondents. In that view of the matter and  in
light of decision of the larger Bench, as referred above, we hold  that  the
Magistrate wrongly took cognizance in the matter and the Court  below  erred
in putting the onus on  the  appellant  rather  than  the  complainant.  The
aforesaid fact has also been overlooked by the High Court while passing  the
impugned judgment dated 12th August, 2005.
19.   In the result, the impugned judgment dated 12th  August,  2005  passed
by the High  Court  of  Judicature  at  Bombay  and  the  order  dated  29th
November, 2000 passed by the Additional Chief Metropolitan  Magistrate,  9th
Court, Bandra, Mumbai are set aside and the proceedings in question  against
the appellant are quashed.

Case of G. Kamalakar

20.   In this case it is not in dispute that the complaint was filed by  one
Shri V. Shankar Prasad claiming to be  General  Power  of  Attorney  of  the
complainant  company.  Subsequently  PW-1  Shri  Ravinder  Singh  gave   the
evidence on behalf of the Company under the General Power of Attorney  given
by the complainant Company. The complaint was not signed either by  Managing
Director or Director of the Company.  It is also not in  dispute  that  PW-1
is only the employee of the Company.  As per Resolution of the Company  i.e.
Ex.P3 under first part Managing Director  and  Director  are  authorized  to
file suits and criminal complaints  against  the  debtors  for  recovery  of
money and for prosecution. Under third part  of  the  said  Resolution  they
were authorized to appoint or nominate any other person to appear  on  their
behalf in the Court and engage  lawyer  etc.   But  nothing  on  the  record
suggest that an employee is empowered to file the  complaint  on  behalf  of
the Company.  This apart, Managing  Director  and  Director  are  authorized
persons of the Company to file  the  complaint  by  signing  and  by  giving
evidence. At best the said persons can  nominate  any  person  to  represent
themselves or the Company before the Court.  In the present  case  one  Shri
Shankar Prasad employee of the Company signed the complaint and  the  Deputy
General Manager of the Company i.e.  PW-1  gave  evidence  as  if  he  knows
everything though he does not  know  anything.   There  is  nothing  on  the
record to suggest that he was authorized by the  Managing  Director  or  any
Director.  Therefore,  Magistrate  by  judgment  dated  30th  October,  2001
rightly acquitted the appellant.  In such  a  situation,  the  case  of  the
appellant is fully covered by decision by the larger  bench  of  this  Court
passed in the present appeal.  We have no other option but to set aside  the
impugned judgment dated 19th September, 2007 passed by  the  High  Court  of
Judicature, Andhra Pradesh at Hyderabad in Criminal Appeal No.578  of  2002.
The judgment and order dated 30th October,  2001  passed  by  the  Court  of
XVIII Metropolitan Magistrate, Hyderabad in C.C.No.18 of 2000 is upheld.
21.   The appeals are allowed accordingly.

..............................................................................
                                                                    ......J.
                                 (SUDHANSU JYOTI MUKHOPADHAYA)


..............................................................................
                                                                    ......J.
NEW DELHI,                                 (S.A. BOBDE)
JANUARY 28, 2015.

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