Power of attorney holder can file Section 138 NI Act complaint if witness to transactions

The SC held that a complaint under Section 138 of the NI Act can be filed through a power of attorney holder. The power of attorney holder, being the complainant's husband, had witnessed all transactions and possessed due knowledge about them. The magistrate properly recorded the power of attorney holder's statement under Section 200 of the Code and issued summons. The complaint could not be held non-maintainable on grounds of power of attorney filing. The matter was remanded to the HC to determine whether the cheques were issued as security or for repayment of legally recoverable debt. Appeal allowed by way of remand.

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Issues Involved:
1. Whether the power of attorney was produced before the trial court.
2. Whether the complaint under Section 138 of the NI Act can be filed by a power of attorney holder.
3. Whether the cheques in question were issued as a security or for the purpose of repayment of a legally recoverable debt.

Issue-Wise Detailed Analysis:

1. Whether the power of attorney was produced before the trial court:
The High Court acquitted the Respondents on the ground that the power of attorney was not produced, and the Appellant must be examined as per Section 200 of the Code. The Appellant contended that the power of attorney was indeed produced and was part of the trial court's record, bearing PCR and CC numbers. The Respondents did not raise this issue at the trial court or the Sessions Court, weakening its force. The High Court entertained this argument belatedly and dealt with it perfunctorily. The Supreme Court found the power of attorney to be authentic and part of the trial court record, rejecting the Respondents' submission.

2. Whether the complaint under Section 138 of the NI Act can be filed by a power of attorney holder:
The Supreme Court referenced the case A.C. Narayanan v. State of Maharashtra, which clarified that filing a complaint under Section 138 of the NI Act through a power of attorney is legal and competent. The power of attorney holder must have witnessed the transaction or possess due knowledge of it. In this case, the Appellant's husband, as her power of attorney holder, had full knowledge of the transactions and was involved at all crucial stages. The Appellant had explicitly stated in her complaint that her husband had knowledge of the transactions. The Supreme Court rejected the submission that the complaint could not be filed through a power of attorney holder and upheld the legality of the complaint filed by the Appellant's husband.

3. Whether the cheques in question were issued as a security or for the purpose of repayment of a legally recoverable debt:
The High Court did not address this issue, although it was raised in the appeal memo. The trial court and the lower appellate court had rejected the Respondents' plea that the cheques were issued as security and not for a legally recoverable debt. The Supreme Court noted the letter dated 30/6/2003 from the Respondents to the Appellant, which indicated a commitment to return the shares and provided cheques to recover dues if the shares were not returned by a specified date. This suggested that the cheques were issued for a crystallized liability. The Supreme Court remanded the matter to the High Court to decide whether the cheques were issued as security or for repayment of a legally recoverable debt, requesting a decision within eight months.

Conclusion:
The Supreme Court upheld that the complaint under Section 138 of the NI Act could be filed by a power of attorney holder and that the power of attorney was part of the trial court's record. The matter was remanded to the High Court to determine whether the cheques were issued as security or for a legally recoverable debt, with a request for an expedited decision.

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