Full Judgment Text
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CRL.P No. 8257 of 2019
C/W CRL.P No. 8235 of 2019
CRL.P No. 8262 of 2019
CRL.P No. 8277 of 2019
CRL.P No. 8279 of 2019
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
®
ST
DATED THIS THE 21 DAY OF SEPTEMBER, 2022
BEFORE
THE HON'BLE MR JUSTICE SURAJ GOVINDARAJ
CRIMINAL PETITION NO. 8257 OF 2019
C/W
CRIMINAL PETITION NO. 8235 OF 2019
CRIMINAL PETITION NO. 8262 OF 2019
CRIMINAL PETITION NO. 8277 OF 2019
CRIMINAL PETITION NO. 8279 OF 2019
IN CRL.P.NO.8257/2019
BETWEEN:
SRI. H.N. NAGARAJ
S/O LATE HEGGUR NANJUNDAPPA
AGED ABOUT 60 YEARS
PROPRIETOR
M/S VENKATESHWARA STONE CRUSHERS
TH
NO.490/2/01, 39 CROSS
TH
8 BLOCK, JAYANAGAR
BENGALURU-560 082
…PETITIONER
(BY SRI. G S VENKAT SUBBA RAO, ADVOCATE)
AND:
SRI. SURESH LAL HIRA LAL
S/O LATE HIRA LAL
AGED ABOUT 69 YEARS
NO.92, J.M. ROAD
BANGALORE-560 001
…RESPONDENT
(BY KUM. NEHA SHETTY, ADVOCATE)
Digitally signed by
POORNIMA
SHIVANNA
Location: HIGH
COURT OF
KARNATAKA
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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C., PRAYING TO CALL FOR THE RECORDS AND QUASH THE
IMPUGNED ORDER DATED 24.07.2018 PASSED BY THE XX
ADDITIONAL CHIEF METROPOLITAN MAGISTRATE BENGALURU IN
C.C.NO.20484/2018 BEING THE ORDER TAKING COGNIZANCE OF
THE OFFENCE P/U/S.138 OF NI ACT VIDE ANNEXURE-A AND ETC.
*
IN CRL.P.NO.8235/2019
BETWEEN:
SRI. H.N. NAGARAJ
S/O LATE HEGGUR NANJUNDAPPA
AGED ABOUT 60 YEARS
PROPRIETOR
VENKATESHWARA STONE CRUSHERS
ST ST
NO.312, 1 FLOOR, 1 MAIN
TH TH
40 CROS, 8 BLOCK, JAYANAGAR
BENGALURU-560 082
…PETITIONER
(BY SRI. G S VENKAT SUBBA RAO, ADVOCATE)
AND
SMT S. PRIYA SOLIWAL
W/O SRI. RAHUL B. HINDUJA
AGED ABOUT 34 YEARS
TH
NO.11/2, 5 CROSS
LAKSHMI ROAD, SHANTINAGAR
BANGALORE-560 027
… RESPONDENT
(BY SRI. K. VENKATARAMANA, ADVOCATE)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C., PRAYING TO CALL FOR THE RECORDS AND QUASH THE
IMPUGNED ORDER DATED 05.12.2018 PASSED BY THE XX
ADDITIONAL CHIEF METROPOLITAN MAGISTRATE BENGALURU IN
C.C.NO.32057/2018 BEING THE ORDER TAKING COGNIZANCE OF
THE OFFENCE P/U/S.138 OF NI ACT AND ETC.
*
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CRL.P No. 8277 of 2019
CRL.P No. 8279 of 2019
IN CRL.P.NO.8262/2019
BETWEEN:
SRI. H.N. NAGARAJ
S/O LATE HEGGUR NANJUNDAPPA
AGED ABOUT 60 YEARS
PROPRIETOR
M/S VENKATESHWARA STONE CRUSHERS
TH
NO.490/2/01, 39 CROSS
TH
8 BLOCK, JAYANAGAR
BENGALURU-560 082
…PETITIONER
(BY SRI. G S VENKAT SUBBA RAO, ADVOCATE)
AND:
SMT. PAYAL KISHORE KUMAR
W/O KISHORE SURESHLAL
AGED ABOUT 43 YEARS
NO.17, SUBRAMANYA SWAMY TEMPLE STREET
V V PURAM, BENGALURU-560 004
REP. BY GPA HOLDER
KISHORE SURESHLAL
… RESPONDENT
(BY KUM. NEHA SHETTY, ADVOCATE)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C., PRAYING TO CALL FOR THE RECORDS AND TO QUASH THE
IMPUGNED ORDER DATED 24.07.2018 PASSED BY THE XX
ADDITIONAL CHIEF METROPOLITAN MAGISTRATE BENGALURU IN
C.C.NO.20486/2018 BEING THE ORDER TAKING COGNIZANCE OF
THE OFFENCE P/U/S.138 OF NI ACT VIDE ANNEXURE-A AND ETC.
*
IN CRL.P.NO.8277/2019
BETWEEN:
SRI. H.N. NAGARAJ
S/O LATE HEGGUR NANJUNDAPPA
AGED ABOUT 60 YEARS
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PROPRIETOR
M/S VENKATESHWARA STONE CRUSHERS
TH
NO.490/2/01, 39 CROSS
TH
8 BLOCK, JAYANAGAR
BENGALURU-560 082
…PETITIONER
(BY SRI. G S VENKAT SUBBA RAO, ADVOCATE)
AND:
SRI. KISHORE SURESHLAL
S/O SURESHLAL HIRALAL
AGED ABOUT 44 YEARS
NO.17, SUBRAMANYA SWAMY TEMPLE STREET
V V PURAM, BENGALURU-560 004
… RESPONDENT
(BY KUM. NEHA SHETTY, ADVOCATE)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C., PRAYING TO CALL FOR THE RECORDS AND TO QUASH THE
IMPUGNED ORDER DATED 24.07.2018 PASSED BY THE XX A.C.M.M.,
IN C.C.NO.20482/2018 BEING THE ORDER TAKING COGNIZANCE OF
THE OFFENCE P/U/S 138 OF THE N.I ACT AND ETC.
*
IN CRL.P.NO.8279/2019
BETWEEN:
SRI. H.N. NAGARAJ
S/O LATE HEGGUR NANJUNDAPPA
AGED ABOUT 60 YEARS
PROPRIETOR
M/S VENKATESHWARA STONE CRUSHERS
TH
NO.490/2/01, 39 CROSS
TH
8 BLOCK, JAYANAGAR
BENGALURU-560 082
…PETITIONER
(BY SRI. G S VENKAT SUBBA RAO, ADVOCATE)
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AND:
SAW SHOBADEVI SURESHLAL
W/O SRI. SURESHLAL HIRALAL
AGED ABOUT 66 YEARS
NO.17, SUBRAMANYA SWAMY TEMPLE STREET
V V PURAM, BENGALURU-560 002
REP. BY SPA HOLDER
KISHORE SURESHLAL
… RESPONDENT
(BY KUM. NEHA SHETTY, ADVOCATE)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF
CR.P.C., PRAYING TO CALL FOR THE RECORDS AND TO QUASH THE
IMPUGNED ORDER DATED 24.07.2018 PASSED BY THE XX
ADDL.C.M.M., BENGALURU IN C.C.NO.20479/2018 BEING THE
ORDER TAKING COGNIZANCE OF THE OFFENCE P/U/S 138 OF N.I.
ACT AND ETC.
*
THESE PETITIONS, COMING ON FOR ADMISSION, THIS DAY,
THE COURT MADE THE FOLLOWING:
ORDER
1. The petitioner in Crl.P No.8257/2019 is before this
Court seeking for the following reliefs:
a. Call for the records in CC No.20484/2018 from the
court of XX Addl. Chief Metropolitan Magistrate,
Bengaluru;
b. quash the impugned order dated 24.07.2018
passed by the XX Addl. Chief Metropolitan
Magistrate, Bengaluru in C.C.No.20484/2018
being the order taking cognizance of the offence
p/u/s 138 of Negotiable Instruments Act vide
Annexure-A;
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c. quash the complaint in C.C.No.20484/2018 filed
u/s 200 of Cr.P.C., for the offence p/u/s 138 of
Negotiable Instrument Act on the file of XX Addl.
Chief Metropolitan Magistrate, Bengaluru vide
Annexure-B;
d. issue such other order or directions as this Hon’ble
Court deems fit under the circumstances of the
case including costs, in the interest of justice and
equity.
2. The petitioner in Crl.P No.8235/2019 is before this
Court seeking for the following reliefs:
a. Call for the records in CC No.32057/2018 from the
court of XX Addl. Chief Metropolitan Magistrate,
Bengaluru;
b. quash the impugned order dated 5.12.2018
passed by the XX Addl. Chief Metropolitan
Magistrate, Bengaluru in C.C.No.32057/2018
being the order taking cognizance of the offence
p/u/s 138 of Negotiable Instruments Act;
c. quash the complaint in C.C.No.32057/2018 filed
u/s 200 of CR.P.C., for the offence p/u/s 138 of
Negotiable Instrument Act on the file of XX Addl.
Chief Metropolitan Magistrate, Bengaluru;
d. issue such other order or directions as this Hon’ble
Court deems fit under the circumstances of the
case including costs, in the interest of justice and
equity.
3. The petitioner in Crl.P No.8262/2019 is before this
Court seeking for the following reliefs:
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a. Call for the records in CC No.20486/2018 from the
court of XX Addl. Chief Metropolitan Magistrate,
Bengaluru;
b. quash the impugned order dated 24.07.2018
passed by the XX Addl. Chief Metropolitan
Magistrate, Bengaluru in C.C.No.20486/2018
being the order taking cognizance of the offence
p/u/s 138 of Negotiable Instruments Act;
c. quash the complaint in C.C.No.20486/2018 filed
u/s 200 of CR.P.C., for the offence p/u/s 138 of
Negotiable Instrument Act on the file of XX Addl.
Chief Metropolitan Magistrate, Bengaluru;
d. issue such other order or directions as this Hon’ble
Court deems fit under the circumstances of the
case including costs, in the interest of justice and
equity.
4. The petitioner in Crl.P No.8277/2019 is before this
Court seeking for the following reliefs:
a. Call for the records in CC No.20482/2018 from the
court of XX Addl. Chief Metropolitan Magistrate,
Bengaluru;
b. quash the impugned order dated 24.07.2018
passed by the XX Addl. Chief Metropolitan
Magistrate, Bengaluru in C.C.No.20482/2018
being the order taking cognizance of the offence
p/u/s 138 of Negotiable Instruments Act;
c. quash the complaint in C.C.No.20482/2018 filed
u/s 200 of CR.P.C., for the offence p/u/s 138 of
Negotiable Instrument Act on the file of XX Addl.
Chief Metropolitan Magistrate, Bengaluru;
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d. issue such other order or directions as this Hon’ble
Court deems fit under the circumstances of the
case including costs, in the interest of justice and
equity.
5. The petitioner in Crl.P No.8279/2019 is before this
Court seeking for the following reliefs:
a. Call for the records in CC No.20479/2018 from the
court of XX Addl. Chief Metropolitan Magistrate,
Bengaluru;
b. quash the impugned order dated 24.07.2018
passed by the XX Addl. Chief Metropolitan
Magistrate, Bengaluru in C.C.No.20479/2018
being the order taking cognizance of the offence
p/u/s 138 of Negotiable Instruments Act;
c. quash the complaint in C.C.No.20479/2018 filed
u/s 200 of CR.P.C., for the offence p/u/s 138 of
Negotiable Instrument Act on the file of XX Addl.
Chief Metropolitan Magistrate, Bengaluru;
d. issue such other order or directions as this Hon’ble
Court deems fit under the circumstances of the
case including costs, in the interest of justice and
equity.
6. In all the above matters, a private complaint under
Section 200 Cr.P.C., read with Section 138 and 141
of Negotiable Instruments Act, 1881 (for short,
‘N.I.Act’) came to be filed against the petitioner
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herein on the allegation that the petitioner had
borrowed certain money from the complainant, which
was not repaid and the cheque which had been
issued thereto had got dishonoured with a remark
‘account blocked’. It is aggrieved by the same that
the petitioner is before this Court.
7. The submission of Sri.G.S.Venkat Subba Rao,
learned counsel for the petitioner is that:
7.1. The petitioner, though described as a
proprietary concern, the said proprietary
concern has not been specifically made a party
and the petitioner has been made a party by
describing him as a proprietor of
Venkateshwara Stone Crushers. In essence,
the submission is that both Venkateshwara
Stone Crushers as a proprietary concern and
the petitioner H.N.Nagaraja were required to be
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arrayed as separate accused. Non-arraying of
the proprietary concern separately as an
accused goes to the root of the matter is
contrary to Section 141 of N.I.Act and is
therefore requiring the complaint which had
been filed to be quashed.
7.2. In this regard, he relies upon the decision of
the Panjab and Haryana High Court in the case
of SARDAR BUPENDER SINGH VS. M/S.GREEN
FEEDS THROUGH ITS PARTNER VIPIN KUMAR
1
dated 26.08.2022 more particularly Paras
12, 13 and 17 thereof, which are reproduced
hereunder for easy reference:
12. Clause (a) of the explanation as occurs in
Section 141 of 'the Act' describes, a 'Company'
to not only include any corporate body,
but also makes a firm, or, other association of
individuals, to become included within the
realm of statutory coinage 'Company', and,
besides when clause (b) thereof, when defines
a 'Director', it makes the said statutory phrase,
1
CRM-M-54111/2021
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to in relation to a firm, to also include a partner
in a firm.
13. If so, when the statutory signification
assigned to a 'Company', does visibly cover not
only any corporate body, but also covers a
firm, or other association of individuals,
therefore, not only a corporate entity either
private, or, public limited becomes a Company',
for the purpose of application thereon of
Section 141 of 'the Act', but also a firm, or,
other association of individuals, do also,
become covered by Section 141 of 'the Act',
besides a partner in a firm when is given the
colour of a Director of a firm, also does become
covered for the relevant purpose.
17. In consequence, there is merit in the
petition, and, the same is allowed, and, the
complaint bearing No.467 dated 30.01.2019
under Section 138 of the Negotiable
Instruments Act, titled as 'M/s Green Feeds
V/s. Sardar Bhupinder Singh' (Annexure P-1),
as well as, the summoning order dated
05.08.2019 (Annexure P-2), both are quashed
and set aside.
7.3. The second submission insofar as Crl.P
No.8257/2019, Crl.P No.8235/2019, Crl.P
No.8262/2019 and Crl.P No.8279/2019 are
concerned is that the sworn statement of the
Special Power Attorney holder of the
complainant was recorded on which basis the
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cognizance was taken and the same cannot be
so done and the same is contrary to the
decision of the Hon’ble Apex Court in the case
of A.C.NARAYANAN VS. STATE OF
2
MAHARASHTRA AND ANOTHER more
particularly Paras 31 and 33 thereof which are
reproduced hereunder for easy reference:-
31. 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.
33. While holding that there is no serious conflict
between the decisions in MMTC (supra) and Janki
2
(2014) 11 SCC 790
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Vashdeo Bhojwani (supra), we clarify the
position and answer the questions in the
following manner:
33.1 Filing of complaint petition under Section
138 of N.I 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 of
attorney 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 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.
33.5 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
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power of attorney itself can be cancelled and be
given to another person.
7.4. By relying upon the said decision, the
submission is that a complaint under Section
138 of N.I.Act can be filed through a power of
attorney holder but the name of the complaint
has to be that of the complainant itself.
7.5. The power of attorney holder must have
actually witnessed the transaction as an agent
of the payee/holder in due course or possess
due knowledge regarding the said transaction.
In the present case, the SPA holder not
possessing such knowledge could not have
been examined at the time of recording the
sworn statement. The power of attorney not
having complied with the requirements of the
dicta laid down by the Apex Court in
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2
A.C.Narayanan’s case , the sworn statement
recorded cannot be considered and cognizance
could not have been taken. On both the above
grounds, he submits that the above petitions
are required to be allowed and proceedings
required to be quashed.
8. Per contra, Ms.Neha Shetty, learned counsel for the
respondent would submit that:
8.1. Section 141 of N.I.Act would apply insofar as a
company is concerned. The same has no
applicability to a proprietary concern. A
proprietor and a proprietary concern are one
and the same. There being no registration or
perpetual seal of succession insofar as the
proprietary concern is concerned, they have no
separate existence and there could not be
arrayed as two different parties.
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8.2. As regards the power of attorney, she submits
that he has categorically averred in the
complaint when filed that he is the son and
special power of attorney holder of the
Proprietor and is aware of the facts of the
matter and he would be deposing to the matter.
The necessary averments having been made it
is in compliance with the decision of
2
A.C.Narayanan’s case . On this basis, she
submits that the petition is required to be
dismissed.
9. Heard Sri.G.S.Venkat Subbarao, learned counsel for
the petitioner and Ms.Neha Shetty, learned counsel
for respondent and perused papers.
10. The points that would arise for determination by this
Court are:
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1) Whether a proprietary concern is required to
be arrayed as a separate party in a proceeding
under Section 138 of N.I.Act?
2) Whether the sworn statement of the Special
Power of Attorney holder could be recorded in
a proceeding under Section 138 of N.I.Act?
3) What order?
11. Answer to Point No.1 : Whether a proprietary
concern is required to be arrayed as a separate
party in a proceeding under Section 138 of N.I.Act?
11.1. The facts relating to each of the complaint,
cheque numbers, date of dishonour etc., are
not relevant for the purpose of these matters.
11.2. The submission of Sri.Venkat Subba Rao by
relying upon the decision in Sardar Bhupinder
1
Singh is that the proprietary concern is a
separate entity and as such, ought to have
been arrayed as a separate accused.
11.3. Section 141 of Negotiable Instruments Act,
1881 reads as under:
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141. Offences by companies. —
(1) If the person committing an offence
under section 138 is a company, every
person who, at the time the offence was
committed, was in charge of, and was
responsible to the company for the conduct
of the business of the company, as well as
the company, shall be deemed to be guilty of
the offence and shall be liable to be
proceeded against and punished accordingly:
PROVIDED that nothing contained in this
sub-section shall render any person liable to
punishment if he proves that the offence
was committed without his knowledge, or
that he had exercised all due diligence to
prevent the commission of such offence:
1
[PROVIDED FURTHER that where a person
is nominated as a Director of a company by
virtue of his holding any office or
employment in the Central Government or
State Government or a financial corporation
owned or controlled by the Central
Government or the State Government, as
the case may be, he shall not be liable for
prosecution under this Chapter.]
(2) Notwithstanding anything contained in
sub-section (1), where any offence under
this Act has been committed by a company
and it is proved that the offence has been
committed with the consent or connivance
of, or is attributable to, any neglect on the
part of, any director, manager, secretary or
other officer of the company, such director,
manager, secretary or other officer shall also
be deemed to be guilty of that offence and
shall be liable to be proceeded against and
punished accordingly.
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Explanation.— For the purposes of this
section,—
(a) “company” means any body corporate
and includes a firm or other association of
individuals; and
(b) “director”, in relation to a firm, means a
partner in the firm.]
11.4. The said provision relates to offences by
Companies. A reading of the entire provision
does not indicate the applicability of the same
to a proprietary concern though it indicates that
it would apply to a company, firm or association
of individuals. The requirement of Section 141
of N.I.Act has arisen on account of a company
being a corporal entity, a firm being either
registered or unregistered comprising of two or
more partners and an association of individuals
also comprising of two or more individuals.
Thus, in all the three situations, there would be
more than two or more people who could be
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incharge of the affairs of the business of the
company, firm or association of individuals and
it is therefore required for the complainant to
make specific allegations as regards each such
person so as to invoke the criminal process.
11.5. Insofar as a proprietary concern is concerned,
as the name indicates there can only be one
proprietor and it is the said proprietor who
would be incharge of the affairs of the
proprietary concern. Thus, it is not required for
any pleading to be made as regards who is the
person in charge of a proprietary concern when
there is only one proprietor. I am unable to
agree with the decision of the Hon’ble Panjab
and Haryana High Court in the case of SARDAR
1
BUPENDER SINGH where the definition of a
company has been extended to a proprietary
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concern to contend that the proprietary concern
has a separate and independent existence. In
my considered opinion a proprietary concern
cannot have any independent or separate
existence dehors the proprietor thereof.
11.6. In view thereof, I answer point no.1 by holding
that in a proceeding under Section 138 of
N.I.Act, the arraying of a proprietor as an
accused or a proprietary concern represented
by the proprietor would be sufficient compliance
with the requirements under Section 138 of
N.I.Act, the proprietor and the proprietary
concerareis not required to be separately
arrayed as a party accused.
12. Answer to Point No.2 : Whether the sworn
statement of the Special Power of Attorney holder
could be recorded in a proceeding under Section
138 of N.I.Act?
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12.1. Para 33 of the decision of the Hon’ble Apex
2
Court in A.C.Narayanan’s case has been
reproduced hereinabove.
2
12.2. In terms of Para 33.1 of A.C.Narayanan’s
case, it is clear that a complaint under Section
138 of N.I.Act can be filed through a power of
attorney. In the present case, the compliant
has been filed by a Special Power of Attorney,
which is sufficient compliance.
2
12.3. In terms of para 33.2 of A.C.Narayanan’s
case, a power of attorney could depose and
verify on oath and prove the contents of the
complaint which has been done.
12.4. The power of attorney holder being a witness to
the transaction as an agent is a matter which
has been averred in the complaint but the
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veracity of the same would always be subject to
cross-examination in the proceedings. In the
event of the accused being able to establish
that the power of attorney does not know the
transactions and/or that the deposition given is
not correct or false, the accused could always
succeed in the said mater. At the stage of filing
of an affidavit or recordal of sworn statement it
cannot be said or decided as to whether the
power of attorney is aware of or not of the
transactions.
2
12.5. In terms of para 33.3 of A.C.Narayanan’s
case, what is required is for a specific assertion
to be made that the power of attorney is aware
of the transactions. In the present case, such
an assertion has been made. Be that as it may,
during the course of cross-examination if it is
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established that the power of attorney holder
has no knowledge regarding the transaction,
then the complaint itself would fail and it is the
risk which has been taken by the complainant by
appointing power of attorney holder.
12.6. In view of the above, I answer Point No.2 by
holding that a power of attorney could file a
complaint, could depose to an affidavit as also
record his sworn statement in a proceedings under
Section 138 of N.I.Act.
13. Answer to Point No.3: What order?
13.1. The two contentions which have been addressed
by Sri.Venkat Subbarao , learned counsel for the
petitioner being dealt with hereinabove, those two
grounds not being sufficient for exercise of powers
under Section 482 Cr.P.C. I am of the considered
opinion that the petitions not making any grounds
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are required to be dismissed and as such Criminal
Petitions are dismissed.
Sd/-
JUDGE
PRS
List No.: 1 Sl No.: 53