Whether Power of Attorney holder can sign and file complaint petition on behalf of complainant in cheque dishonour case?

 The three Judge Bench of the Apex Court in A.C. Narayanan tagged Cri. Appeal No. 2724 of 2008 alongwith Criminal appeal No. 73 of 2007 and in terms of the reference order formulated the following questions:

15) In terms of the reference order, the following questions have to be decided by this Bench:

(i) Whether a Power of Attorney holder can sign and file a complaint petition on 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 verified 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?"

32. While deciding whether there was any conflict between the decision in M.M.T.C. Ltd. and Anr. Vs. Medchl Chemicals and Pharma (P) Ltd. and Anr. MANU/SC/0728/2001 : (2002) 1 SCC 234 and Janki Vashdeo Bhojwani and Anr. Vs. Indusind Bank Ltd. and Ors., MANU/SC/1030/2004 : (2005) 2 SCC 217 the Apex Court after considering the factual details and ultimate dictum laid down in both the decisions held as under:

"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 MANU/SC/0101/1966 : (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 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".

........

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.

26) While holding that there is no serious conflict between the decisions in MMTC (supra) and Janki Vashdeo Bhojwani (supra), we clarify the position and answer the questions 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."

33. It is sought to be contended that the reference in A.C. Narayanan (supra) was made in Criminal Appeal No. 73 of 2007, which was arising from a complaint filed by an individual person. Seeking to make distinction between complaints filed by juristic and non-juristic person, the learned counsel for the Complainant-company has sought to contend that the ratio laid down by the Apex court in A.C. Narayanan (supra) is not applicable to the complaints filed by a juristic person.

34. A plain reading of the judgment in A.C. Naraynan (supra) reveals that though the reference was in Criminal Appeal No. 73 of 2007, the Apex Court had tagged and heard Criminal appeal No. 2724 of 2008 along with criminal appeal No. 73 of 2007. The Criminal Appeal No. 2724 of 2008 relates to the complaint under section 138 of the NI Act filed by the Power of Attorney on behalf of the Company. The decisions in A.C. Narayanan (supra) MANU/SC/0934/2013 : 2014 AIR SC 630 and MANU/SC/0075/2015 : 2015 AIR SC 1198 reveal that both these appeals were heard together as they involved common question of law. Hence, the distinction sought to be drawn by the learned counsel Shri Yashpal Thakur is factually incorrect.

35. It is pertinent to note that in the aforesaid decision the Apex Court has interpreted Section 142(a) of the NI Act, which provides that 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. This section prescribes the procedure for taking cognizance of offences punishable under Section 138 of the NI Act. This section which is an exception to the general rule that anyone can set the criminal law in motion, mandates that no court shall take cognizance of an offence under Section 138 of NI Act unless the complaint is made in writing by a payee or by a holder in due course, as the case may be.

36. It is thus, evident that the payee/holder in due course of the cheque is alone competent to file a complaint under section 138 of the N.I. Act. In case the payee is a company, the complaint should necessarily be filed in the name of the company. However, company being a juristic person it can act only through a representative authorised by the Board of Directors either by a resolution or by executing a power of attorney.

37. In A.C. Narayanan (supra), the Apex Court after considering the scope of Section 138, 142 and 145 of N.I. Act, has held that the payee or the holder in due course can authorise his constituted attorney to make a complaint under Section 138 of the Act and depose on oath before the Court provided constituted attorney has witnessed the transaction as an agent of the payee/holder in due course or possesses due knowledge of the transaction. It is to be noted that the Act does not prescribe a separate procedure for the complaints filed by juristic and non-juristic person. Furthermore, the Apex Court has not made any such distinction in A.C. Naraynan (supra). Hence, it is not possible to accept the contention of the learned counsel for the Complainant-company that the principles enunciated in the said decision are restricted only to the complaints filed by an individual person and not by a juristic person.

38. At this stage, it would also be advantageous to refer to the provisions under Sections 118(a) and 139 of the NI Act. Section 118(a) of the NI Act raises a presumption that until contrary is constituted attorney of the proved; every negotiable instrument was made or drawn for consideration, whereas Section 139 of the NI Act raises a presumption that unless the contrary is proved, the holder of the cheque received the cheque for the discharge of whole or part of any debt or liability. The presumptions under Sections 118(a) and 139 of the NI Act are rebuttable in nature. The presumption under these provisions need not be rebutted only by adducing direct evidence but can be rebutted on the basis of the facts elicited in the cross examination. Suffice it to say that the power of attorney will not be competent to depose in respect of a transaction of which he has no knowledge. As a result thereof, the accused will be precluded from effectively cross examining the power of attorney and eliciting the required material to dislodge the statutory presumption. It is therefore imperative that the power of attorney authorised by an individual or juristic person has knowledge of the transaction. In the light of above, the contention of the learned counsel Shri Yashpal Thakur that the power of attorney appointed by a juristic person need not have personal knowledge of the transaction needs to be rejected.

39. In my considered view, the principles laid down in A.C. Narayanan that the power of attorney who files complaint for the offence punishable under section 138 of NI Act and deposes on behalf of the payee must essentially have personal knowledge of the transaction are also applicable to complaints filed by a juristic person.

40. It is to be noted that there were divergent views between various High Courts on the question whether the power of attorney could depose on behalf of the principal. In Dr. Pradeep Mohanbhai Vs. Mingel Karlos Dais 2000 volume 102 (1) Bombay L.R. 908 this High Court has held that a power of attorney can file a complaint under section 138 of the NI Act but cannot depose on behalf of the complainant. He can only appear as a witness. Similar view was taken by the Rajasthan High Court in Shambhudatta Shastri Vs. State of Rajasthan MANU/RH/0397/1985 : 1986 (2) WLN 713 and Ramprasad Vs. Harinarayan & ORs MANU/RH/0233/1998 : AIR 1998 Rajasthan 185. Whereas a contrary view was taken by this High Court in Humberto Luis & Anr. Vs. Floriano Luis Armando Luis and Anr. MANU/MH/0240/2000 : 2000 (2) BOM.C.R. 754. The Apex Court in Janki Bhojwani vs. Indusind Bank Ltd. MANU/SC/1030/2004 : (2005) 2 SCC 217 has held that the view taken by the Rajasthan High Court in the case of Shamhudatta Shastri followed and reiterated in the case of Ramprasad is the correct view. The Apex Court has held that the view taken in the case of Floraino Luis cannot be said to have laid down a correct law and accordingly overruled the same. Thus, the controversy over the issue whether the power of attorney could file a complaint and whether he could depose on behalf of the complainant was set to rest by the Apex Court in Janki Bhojwani (supra). This decision clearly sets out that the power of attorney is entitled to file a complaint and depose provided he has personal knowledge of the transaction in question.

41. In A.C. Narayanan, (supra) the Apex Court while interpreting the provisions of section 142(a) and 145 which are procedural in nature and were already existing on the statute book as on the date of filing of the complaint, reiterated that the power of attorney is competent to file a complaint under section 138 of the NI Act and to depose before the Court provided he has knowledge of the transaction in question. The Apex Court has neither laid down a new proposition of law on the subject nor upset the settled position of law. The said decision also does not affect any vested or substantial right of the parties. Hence, there is no merit in the contention of the learned counsel Shri Yashpal Thakur that the principles enunciated in A.C. Narayanan (supra) operate prospectively and not retrospectively.

42. In Girish Jaggal (supra) the accused had sought quashing of proceedings under Section 138 of the NI Act on the ground that the complaint did not contain specific assertion that the power of attorney holder had the knowledge of the transaction. The Single Judge of this Court held that the defect if any, can always be rectified even at a subsequent stage and therefore the complaint cannot be quashed on the sole ground that the complaint does not contain a specific assertion as to the knowledge of transaction. In the present case, the Complainant-company had not tried to rectify the defect and the case has well passed the stage of rectification. Hence, the said Judgment is not applicable to the facts of the case.

IN THE HIGH COURT OF BOMBAY

Criminal Revision Application No. 432 of 2015

Decided On: 14.03.2017

Jaimin Jewellery Exports Pvt. Ltd. Vs. The State of Maharashtra and Ors.

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Whether Ganga and Yamuna Rivers are juristic person?

 With the development of the society where the interaction of individuals fell short to upsurge the social development, the concept of juristic person was devised and created by human laws for the purposes of the society. A juristic person, like any other natural person is in law also conferred with rights and obligations and is dealt with in accordance with law. In other words, the entity acts like a natural person but only through a designated person, as their Lordships have held in the judgments cited hereinabove, that for a bigger thrust of socio-political-scientific development, evolution of a fictional personality to be a juristic person becomes inevitable. This may be any entity, living inanimate, objects or things. It may be a religious institution or any such useful unit which may impel the Courts to recognise it. This recognition is for subserving the needs and faith of the society. Corpus Juris Secundum, Vol. 6, page 778 explains the concept of juristic persons/artificial persons thus: “Artificial persons. Such as are created and devised by human laws for the purposes of society and government, which are called corporations or bodies politic.” A juristic person can be any subject matter other than a human being to which the law attributes personality for good and sufficient reasons. Juristic persons being the arbitrary creations of law, as many kinds of juristic persons have been created by law as the society require for its development. (See Salmond on Jurisprudence 12th Edition Pages 305 and 306). Thus, to protect the recognition and the faith of society, Rivers Ganga and Yamuna are required to be declared as the legal persons/living persons.

17. All the Hindus have deep Astha in rivers Ganga and Yamuna and they collectively connect with these rivers. Rivers Ganga and Yamuna are central to the existence of half of Indian population and their health and well being. The rivers have provided both physical and spiritual sustenance to all of us from time immemorial. Rivers Ganga and Yamuna have spiritual and physical sustenance. They support and assist both the life and natural resources and health and well-being of the entire community. Rivers Ganga and Yamuna are breathing, living and sustaining the communities from mountains to sea.

18. The constitution of Ganga Management Board is necessary for the purpose of irrigation, rural and urban water supply, hydro power generation, navigation, industries. There is utmost expediency to give legal status as a living person/legal entity to Rivers Ganga and Yamuna r/w Articles 48-A and 51A(g) of the Constitution of India.

19. Accordingly, while exercising the parens patrie jurisdiction, the Rivers Ganga and Yamuna, all their tributaries, streams, every natural water flowing with flow continuously or intermittently of these rivers, are declared as juristic/legal persons/living entities having the status of a legal person with all corresponding rights, duties and liabilities of a living person in order to preserve and conserve river Ganga and Yamuna.

In the High Court of Uttarakhand at Nainital

(Before Rajiv Sharma and Alok Singh, JJ.)

Mohd. Salim 

v.

State of Uttarakhand & Others .…. Respondents

Writ Petition (Pil) No. 126 of 2014

Decided on March 20, 2017

Citation:2017 SCC OnLine Utt 367

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When suit filed by company through its officer is validly instituted?

It cannot be disputed that a company like the appellant can sue and be sued in its own name. Under Order 6 Rule 14 of the Code of Civil Procedure a pleading is required to be signed by the party and its pleader, if any. As a company is a juristic entity it is obvious that some person has to sign the pleadings on behalf of the company. Order 29 Rule 1 of the Code of Civil Procedure, therefore, provides that in a suit by against a corporation the Secretary or any Director or other Principal officer of the corporation who is able to depose to the facts of the case might sign and verify on behalf of the company. Reading Order 6 Rule 14 together with Order 29 Rule 1 of the Code of Civil Procedure it would appear that even in the absence of any formal letter of authority or power of attorney having been executed a person referred to in Rule 1 of Order 29 can, by virtue of the office which he holds, sign and verify the pleadings on behalf of the corporation. In addition thereto and de hors Order 29 Rule 1 of the Code of Civil Procedure, as a company is a juristic entity, it can duly authorise any person to sign the plaint or the written statement on its behalf and this would be regarded as sufficient compliance with the provisions of Order 6 Rule 14 of the Code of Civil Procedure. A person may be expressly authorised to sign the pleadings on behalf of the company, for example by the Board of Directors passing a resolution to that effect or by a power of attorney being executed in favour of any individual. In absence thereof and in cases where pleadings have been signed by one of it's officers a Corporation can ratify the said action of it's officer in signing the pleadings. Such ratification can be express or implied. The Court can, on the basis of the evidence on record, and after taking all the circumstances of the case, specially with regard to the conduct of the trial, come to the conclusion that the corporation had ratified the act of signing of the pleading by it's officer.

Supreme Court of India

United Bank Of India vs Sh. Naresh Kumar And Ors on 18 September, 1996

BENCH:
KIRPAL B.N. (J)
BHARUCHA S.P. (J)

Citation:AIR 1997 SC 3:1996 SCC(6)660

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Whether proprietorship firm can be prosecuted if proprietor dies?

 In respect of A3 is concerned, A3 is a proprietary concern. A proprietary concern does not have a separate legal entity apart from its proprietor since the proprietary concern and the proprietor are one and the same person. Thus, proprietary concern is not an independent, legal and juristic entity having legal recognition in the eye of law and it can neither initiate proceedings nor proceedings be initiated against it. In the instant case, A1 has borrowed money and a complaint has been preferred against A1 for failing to repay the money. Since A1 died, A3 shall not be impleaded as  accused and so, the proceeding against A3 is liable to be quashed. In the decision relied by the learned counsel for the petitioner in 2007 (5) SUPREME COURT CASES 103, it has been stated as follows :

  The distinction between partnership firm and a proprietary concern is well known.  It is evident from Order 30 Rule 1 and Order 30 Rule 10 of the Code of Civil Procedure.  The question came up for consideration also before this Court in Ashok Transport Agency Vs. Awadhesh Kumar wherein this Court stated the law in the following terms (SCC pp. 569-70 para 6)
6. A partnership firm differs from a proprietary concern owned by an individual.  A partnership is governed by the provisions of the Partnership Act, 1932.  Though a partnership is not a juristic person but Order 30 Rule 1 CPC enables the partners of a partnership firm to sue or to be sued in the name of the firm.  A proprietary concern is only the business name in which the proprietor of the business carries on the business.  A suit by or against a proprietary concern is by or against the proprietor of the business.  In the event of the death of the proprietor of a proprietary concern, it is the legal representatives of the proprietary concern, who alone can sue or be sued in respect of the dealings of the proprietary business.  The provisions of Rule 10 of Order 30 which make applicable the provisions of Order 30 to a proprietary concern enable the proprietor of a proprietary concern.  The real party who is being sued is the proprietor of the said business.  The said provision does not have the effect of converting the proprietary business into a partnership firm.  The provisions of Rule 4 of Order 30 have no application to such a suit as by virtue or Order 30 Rule 10, the other provisions of Order 30 are applicable to  suit against the proprietor or proprietary business 'in so far as the nature of such case permits.'  This means that only those provisions of Order 30 can be made applicable to proprietary concern which can be so made applicable keeping in view the nature of the case. 

15.  A Constitution Bench of this Court in S.M.S.Parmaceuticals Ltd. V. Neeta Bhalla furthermore categorically stated that the complaint petition must contain the requisite averments to bring about a case within the purview of Section 141 of the Act so as to make some persons other than the company vicariously liable therefor.  

It is a proprietary concern.  On the date of borrowal, it was stated that he borrowed for business purpose.  But the cheque has been issued as an individual capacity.  In such circumstances, I am of the view that the third petitioner is also not an accused because it is not a juristic person for prosecution.  

IN THE HIGH COURT OF JUDICATURE AT MADRAS
 DATED : 04.02.2016
CORAM :
THE HONOURABLE MS. JUSTICE R.MALA
Crl.O.P.No.19324 of 2015 & M.P.No.1 of 2015

  M/s.Lakshmi Metal Works 
     Proprietor K.Rajasekar 
 
Vs.

 State rep. by.
     The Inspector of Police
    Citation: 2016 CRLJ 2730

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When juristic person like body corporate who is not drawer of cheque can be held liable for dishonour of cheque?

The learned Counsel for the Respondents has relied upon the case of Anil Hada v. Indian Acrylic Ltd. MANU/SC/0736/1999 : (2000) 1 SCC 1, wherein this Court held-

Normally an offence can be committed by human beings who are natural persons. Such offence can be tried according to the procedure established by law. But there are offences which could be attributed to juristic person also. If the drawer of a cheque happens to be a juristic person like a body corporate it can be prosecuted for the offence Under Section 138 of the Act. Now there is no scope for doubt regarding that aspect in view of the clear language employed in Section 141 of the Act. In the expanded ambit of the word 'company' even firms or any other associations of persons are included and as a necessary adjunct thereof a partner of the firm is treated as director of that company.

(Emphasis supplied)

Thus when the drawer of the cheque who falls within the ambit of Section 138 of the Act is a human being or a body corporate or even firm, prosecution proceedings can be initiated against such drawer. In this context the phrase 'as well as' used in Sub-section (1) of Section 141 of the Act has some importance. The said phrase would embroil the persons mentioned in the first category within the tentacles of the offence on a par with the offending company. Similarly the words 'shall also' in Sub-section (2) are capable of bringing the third category persons additionally within the dragnet of the offence on an equal par. The effect of reading Section 141 is that when the company is the drawer of the cheque such company is the principal offender Under Section 138 of the Act and the remaining persons are made offenders by virtue of the legal fiction created by the legislature as per the section. Hence the actual offence should have been committed by the company, and then alone the other two categories of persons can also become liable for the offence.

IN THE SUPREME COURT OF INDIA

Criminal Appeal No. 1001 of 2010

Decided On: 16.09.2015

Appellants: Jitendra Vora
Vs.
Respondent: Bhavana Y. Shah and Ors.

Hon'ble Judges/Coram:Pinaki Chandra Ghose and R.K. Agrawal, JJ.

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