TaxTMI 
TaxTMI 
2025 (1) TMI 132
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....facts giving rise to the present appeal are as follows: 3.1. M/s Naresh Properties through its Manager Neeraj Kumar, appellant herein, deals in the manufacture and sale of crockeries, insulators, polymer insulators and other such hardware fittings. 3.2. Between the period from 18th June 2021 to 2nd July 2021, M/s Aarti Industries represented by its sole proprietor Sunita Devi, Respondent No. 1 herein, had purchased polymer insulators scrap rejected material, worth Rs. 1,70,46,314/- from the present appellant. After the materials were supplied to Respondent No.1, the appellant raised several bills/invoices seeking payment for the supplied goods. 3.3. Subsequently, on 12th July 2021, the appellant was given a cheque issued in its favour by Respondent No.1 for a sum of Rs.1,70,46,314/-. The said cheque bearing No. 086295 dated 10th July 2021 had been drawn on the A/c No. 3640670725 belonging to M/s Aarti Industries at the Central Bank of India, Branch Khurja. 3.4. Upon receiving the said cheque, the appellant deposited it in its A/c No. 07382560000285 at HDFC Bank, Branch Khurja on 12th July 2021 for encashment. However, the cheque came to be dishonoured and on 13th July 2....
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....ntly, on 22nd October 2021, Sh. Neeraj Kumar filed an Affidavit of Evidence under Section 200 of the Code of Criminal Procedure, 1973 For short 'Cr.P.C.', before the trial court wherein he reiterated the facts of the complaint case and once again, affirmed that he was well-conversant with the facts and circumstances of the case, being the manager of the appellant firm. 3.10. On 22nd November 2021, on the basis of the evidence in the form of the aforesaid examination under Section 200 of the Cr.P.C. and the documentary evidence adduced, the trial court found that there was sufficient ground to issue summons to Sunita Devi, the sole owner/proprietor of Respondent No.1- firm for the offence punishable under Section 138 of the NI Act. Accordingly, an order was passed thereby summoning Sunita Devi to face trial for the aforesaid offence. 3.11. Aggrieved thereby, Respondent No.1 preferred a Criminal Miscellaneous Application under Section 482 of the Cr.P.C. to quash the aforesaid summoning order as well as the entire proceedings of the complaint case pending before the trial court. 3.12. The High Court by the impugned judgment and order allowed the Criminal Miscellaneous Applica....
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....ned counsel, has submitted that the present matter is essentially a dispute between private parties. He has adopted the submissions of the appellant and has prayed that the appeal may be allowed. 10. We have considered the rival submissions and perused the material placed on record. 11. The solitary question that we are called upon to answer is as to whether the complaint filed by the appellant herein under Section 138 of the NI Act is in accordance with the requirement under Section 142 of the NI Act. 12. The relevant provision of the NI Act that falls for our consideration is as follows: "142. Cognizance of offences.-(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),- (a) 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; ................" 13. Ordinarily, under Section 190 of the Cr.P.C., a Magistrate is empowered to take cognizance of an offence upon receiving a complaint of facts which constitute such offence. Prior to taking such cognizance, in accordance wi....
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....mployee or even by a non-employee authorised and empowered to represent the company either by a resolution or by a power of attorney. ..... 19. Resultantly, when in a complaint in regard to dishonour of a cheque issued in favour of a company or corporation, for the purpose of Section 142 of the NI Act, the company will be the complainant, and for purposes of Section 200 of the Code, its employee who represents the company or corporation, will be the de facto complainant. In such a complaint, the de jure complainant, namely, the company or corporation will remain the same but the de facto complainant (employee) representing such de jure complainant can change, from time to time. And if the de facto complainant is a public servant, the benefit of exemption under clause (a) of the proviso to Section 200 of the Code will be available, even though the complaint is made in the name of a company or corporation." ( emphasis supplied ) 16. While this Court was primarily concerned with the issue relating to the exemption available against examining a public servant in view of Section 200(a) of the Cr.P.C., this Court nevertheless clarified that the requirement o....
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....the holder in due course of the cheque? 21.2. Whether a power-of-attorney holder can be verified on oath under Section 200 of the Code? 21.3. Whether specific averments as to the knowledge of the power-of-attorney holder in the impugned transaction must be explicitly asserted in the complaint? 21.4. 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? 21.5. Whether the proceedings contemplated under Section 200 of the Code can be dispensed with in the light of Section 145 of the NI Act which was introduced by an amendment in the year 2002? .... 28. The power-of-attorney holder is the agent of the grantor. When the grantor authorises the attorney holder to initiate legal proceedings and the attorney holder accordingly initiates such legal proceedings, he does so as the agent of the grantor and the initiation is by the grantor represented by his attorney holder and not by the attorney holder in his personal capacity. Therefore, where the payee is a proprietary concern, the complaint can be filed....
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....C. Ltd. v. Medchl Chemicals and Pharma (P) Ltd., (2002) 1 SCC 234 : 2002 SCC (Cri) 121] and Janki Vashdeo Bhojwani [Janki Vashdeo Bhojwani v. IndusInd Bank Ltd., (2005) 2 SCC 217] , we clarify the position and answer the questions in the following manner: 33.1. Filing of complaint petition under Section 138 of the NI Act through power of attorney is perfectly legal and competent. 33.2. 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. 33.3. 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-ofattorney holder who has no knowledge regarding the transactions cannot be examined as a witness in the case. 33.4. In the light of Section 145 of the NI 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 ....
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....no reason why he cannot depose as a witness, however, such personal knowledge must be explicitly asserted in the complaint and a power-of-attorney holder who has no personal knowledge of the transactions cannot be examined as a witness in the case. 20. More recently, in the case of TRL Krosaki Refractories Limited (supra) similar facts as the present matter arose for consideration by this Court. In the said case, a complaint came to be filed by the payee company through its General Manager (Accounting) under Sections 138 and 142 of the NI Act. The complaint was registered based on the affidavit filed on behalf of the complainant, in lieu of an oral sworn statement. Upon being satisfied that there was sufficient material and the complaint under Section 138 of the NI Act against the accused was in accordance with law, the SDJM took cognizance of the complaint and issued summons to the accused-firm therein. Assailing the summoning order, the accused-firm filed a petition before the High Court under Section 482 of the Cr.P.C. for quashing of the summoning order, being aggrieved by the fact that the complaint had been filed by an incompetent person inasmuch as the complainant neither....
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.... requirement relating to delegation of power and also knowledge of the transaction by the person representing the Company in the instant case, it is also necessary for us to keep in perspective that though the case in A.C. Narayanan [A.C. Narayanan v. State of Maharashtra, (2014) 11 SCC 790 : (2014) 4 SCC (Civ) 343] has taken the centre stage of consideration, the facts involved therein were in the background of the complainant being an individual and the complaint filed was based on the power of attorney issued by the "payee" who was also an individual. In such an event, the manner in which the power was being exercised was to be explicitly stated so as to establish the right of the person prosecuting the complaint, to represent the payee i.e. the complainant. The position that would emerge when the complainant is a company or a corporate entity will have to be viewed from a different standpoint. 23. In this regard in Samrat Shipping Co. (P) Ltd. v. Dolly George [Samrat Shipping Co. (P) Ltd. v. Dolly George, (2002) 9 SCC 455 : 2003 SCC (Cri) 1224] , while disapproving the manner in which cognizance was refused to be taken and the complaint had been dismissed by the learne....
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....ompany, an authorised employee can represent the company. Such averment and prima facie material is sufficient for the learned Magistrate to take cognizance and issue process. If at all, there is any serious dispute with regard to the person prosecuting the complaint not being authorised or if it is to be demonstrated that the person who filed the complaint has no knowledge of the transaction and, as such that person could not have instituted and prosecuted the complaint, it would be open for the accused to dispute the position and establish the same during the course of the trial. As noted in Samrat Shipping Co. [Samrat Shipping Co. (P) Ltd. v. Dolly George, (2002) 9 SCC 455 : 2003 SCC (Cri) 1224] , dismissal of a complaint at the threshold by the Magistrate on the question of authorisation, would not be justified. Similarly, we are of the view that in such circumstances entertaining a petition under Section 482 to quash the order taking cognizance by the Magistrate would be unjustified when the issue of proper authorisation and knowledge can only be an issue for trial. 26. In that view of the matter, we are of the opinion that the High Court was not justified in entertai....
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....at the threshold would not be justified. It was held that the issue of proper authorisation and knowledge can only be an issue for trial. 22. Having discussed the law on the subject, we now proceed to consider the facts of the present case. 23. As we have noted earlier, despite being duly served, none appeared for Respondent No.1. 24. From a perusal of the impugned order, we find that the issue raised by Respondent No.1 before the High Court is that complaint filed by Sh. Neeraj Kumar on behalf of the appellant-firm has been rendered defective as there is no specific averment with regard to his knowledge about the transaction in the relevant documents. To buttress its submission, reliance was placed on the decision in the case of A.C. Narayanan (supra). 25. We find that judgment passed by the High Court is entirely based on the guidelines laid down in A.C. Narayanan (supra). Although the High Court took note of the decision in TRL Krosaki Refractories Limited (supra), the sole reason on which it passed the impugned order was that there was no specific pleading in the Letter of Authority or the affidavit of the power of attorney holder under Section 200 of the Cr.P.C. to....
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....arain, aged 42 years r/o H.No. 934, Chandralok Colony, Street No.4, Khurja PS, Khurja Nagar, District Bulandshahr, who is manager of the above firm and takes care of general and day-to-day managerial business of the firm and is very well conversant with everyday affairs, financial transactions and salepurchase of the firm, to file a complaint in the matter of dishonouring of cheque (No.086295 /10.07.2021 for a sum of Rs.1,79,46,3141-) against M/s. Arti Industries, Khurja in a competent Hon'ble Court on behalf of M/s, Naresh Potteries. Khurja. Sh, Neeraj is well aware of this case and is given necessary instructions also." 30. The verifying affidavit filed on behalf of Sh. Neeraj Kumar in support of his complaint reads as under: "02. Deponent is applicant in this case who is posted as manager in complainant firm M/s. Naresh Potteries, GT Road, Khurja and holds authority letter of the firm issued by the owner/proprietor Smt. Shakti Khanna and is well conversant with the facts and circumstances of the case. Thus, deponent is competent to file this affidavit." 31. Further, the affidavit of evidence under Section 200 of the Cr.P.C. filed by Sh. Neeraj Kumar in lieu of....