2005 (9) TMI 691 - HC - Indian Laws

Court upholds Section 138 process issuance under NI Act, validates power of attorney for complaint.

The court upheld the Magistrate's decision to issue process against the petitioners under Section 138 of the Negotiable Instruments Act. It found that the ... - Issues Involved:1. Legitimacy of a complaint filed by a power of attorney holder under Section 138 of the Negotiable Instruments Act (N.I. Act).2. Authority of the power of attorney holder to verify the complaint on behalf of the payee.3. Applicability of Section 142 of the N.I. Act concerning the filing and verification of complaints.Issue-wise Detailed Analysis:1. Legitimacy of a Complaint Filed by a Power of Attorney Holder:The primary issue was whether a complaint under Section 138 of the N.I. Act could be filed by a power of attorney holder on behalf of the payee. The court noted that Section 142 of the N.I. Act prescribes that the complaint must be in writing and filed by the payee or holder in due course. However, the court clarified that this does not necessitate the complaint being filed 'personally' by the payee. The court referenced the Kerala High Court's ruling in Hamsa v. Ibrahim and the Supreme Court's decision in Ravulu Subbarao v. Commissioner of Income Tax, which established that a power of attorney holder can file a complaint if duly authorized. The court concluded that the power of attorney holder, in this case, was authorized to file the complaint, aligning with the established legal position that a power of attorney can act on behalf of the principal.2. Authority of the Power of Attorney Holder to Verify the Complaint:The court addressed whether the power of attorney holder could verify the complaint on behalf of the payee. Citing various precedents, including the Supreme Court's decision in Janki Vashdeo Bhojwani and Ors. v. Indusind Bank Ltd. and Ors., the court emphasized that while a power of attorney holder can file a complaint, they cannot depose on behalf of the complainant. However, they can appear as a witness if they have personal knowledge of the transaction. The court noted that the power of attorney holder in this case had full knowledge of the transaction and was involved from the beginning, justifying the Magistrate's decision to record their statement for verification purposes.3. Applicability of Section 142 of the N.I. Act:Section 142 of the N.I. Act outlines the specific procedure for taking cognizance of an offense under Section 138. The court reiterated that the complaint must be in writing and filed by the payee or holder in due course within one month of the cause of action arising. The court highlighted that the N.I. Act, being a special law, overrides the general provisions of the Code of Criminal Procedure (Cr. P.C.) in this context. The court referenced various judgments, including those of the Andhra Pradesh High Court and the Supreme Court, to establish that the procedural requirements under Section 142 do not preclude a power of attorney holder from filing a complaint, provided they are duly authorized.Conclusion:The court dismissed the petition, upholding the Magistrate's decision to issue process against the petitioners under Section 138 of the N.I. Act. The court found that the power of attorney holder was duly authorized to file and verify the complaint, and the procedural requirements under Section 142 were met. The court concluded that no fault could be found with the impugned order, and the petitioners' contentions were not sustainable. The petition was dismissed, and the rule was discharged, with each party bearing their own costs.