Power of Attorney holder can file Section 138 NI Act complaints despite knowledge challenges

Delhi HC dismissed petition seeking to quash complaint under Section 138 NI Act filed through Power of Attorney. Petitioner challenged validity of compromise deed and attorney's knowledge of transaction. Court held that factual controversies regarding attorney's competence and personal knowledge cannot be examined at pre-trial stage under Section 482 CrPC. Following Supreme Court precedent in Rathish Babu case, HC ruled that complaints can only be quashed if unimpeachable material disproves allegations entirely. Mixed questions of fact and law must be determined during trial after evidence is led.

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Issues Involved:

1. Validity of the complaint under Section 138 of the Negotiable Instruments Act, 1881, filed through a Power of Attorney.
2. Legality of the proceedings initiated on the basis of a compromise deed.
3. The competence of the authorized representative to depose and verify on oath.
4. The maintainability of the complaint in light of previous quashing of proceedings related to a similar issue.

Issue-wise Detailed Analysis:

1. Validity of the Complaint Filed Through Power of Attorney:

The court examined whether the complaint under Section 138 of the NI Act could be filed and pursued by a Power of Attorney holder. The petitioner argued that the authorized representative lacked personal knowledge of the transaction and thus could not tender an affidavit by way of evidence. The court referred to the Supreme Court's ruling in A.C. Narayanan v. State of Maharashtra, which clarified that a Power of Attorney holder can file a complaint and depose if they have witnessed the transaction or possess due knowledge of it. The court found that the complaint and pre-summoning evidence contained an assertion that the authorized representative possessed personal knowledge of the transaction, which was sufficient at the pre-trial stage. The court emphasized that any challenge to the representative's knowledge should be addressed during the trial.

2. Legality of Proceedings Based on a Compromise Deed:

The petitioner contended that the compromise deed was fabricated and should invalidate the proceedings. The court noted that the challenge to the compromise deed's validity was rejected in a previous order dated 08.05.2019, which stated that such a challenge should be addressed in the court where the compromise was accepted. The court held that the validity of the compromise deed should be determined after evidence is presented during the trial, not at the pre-trial stage.

3. Competence of the Authorized Representative to Depose and Verify on Oath:

The petitioner argued that the authorized representative could not depose as they lacked personal knowledge of the transaction. The court referred to the Supreme Court's decision in TRL Krosaki Refractories Ltd. v. SMS Asia (P) Ltd, which stated that the authorized representative must demonstrate that they have knowledge of the complaint's contents. The court found that the complaint and affidavit indicated the representative's personal knowledge, and any dispute over this should be resolved during the trial.

4. Maintainability of the Complaint in Light of Previous Quashing:

The petitioner highlighted that proceedings related to the first cheque were previously quashed due to an unauthenticated Power of Attorney. The court noted that the current complaint was supported by a General Power of Attorney duly attested by the Indian Embassy, addressing the previous issue of authentication. The court held that the present complaint was maintainable as the procedural defect had been rectified.

Conclusion:

The court dismissed the petitions, emphasizing that the factual disputes raised by the petitioner were not of such an impeachable nature to warrant quashing the complaint at the pre-trial stage. The court reiterated that the issues raised should be adjudicated during the trial, where the parties could present their evidence and arguments. The court exercised its discretion under Section 482 of the CrPC, deciding not to intervene at this preliminary stage.

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