Power of attorney holder may maintain Section 138 NI Act complaint on behalf of proprietary concern.

In brief

The question

1. Whether a complaint under Section 138 of the N.I. Act is maintainable when filed by a Power of Attorney holder on behalf of a proprietary concern

The court held

The Court dismissed the petition, holding that the complaint filed by the PoA holder is maintainable and that the procedural requirement under Section 223(1) of the BNSS does not apply to N.I. Act complaints.

It also directed

The interim relief was vacated, and the request for a stay on the judgment to approach the Supreme Court was rejected due to the advanced stage of the trial.

01Facts

The petitioners (original accused) sought quashing of Criminal Case No. 3558 of 2024 filed under Section 138 of the Negotiable Instruments (N.I.) Act

p. 1

The complaint was filed by Mr. Amit Nagindas Kapadia as a Power of Attorney (PoA) holder for "Jalaram Jari Industries"

p. 2

The dispute arose after the accused allegedly failed to deliver goods or refund advances totaling ₹63,00,000, leading to the dishonor of eight cheques

pp. 2-3

The petitioners challenged the complaint on two primary grounds: first, that it was not filed by the authorized proprietor (the original proprietor having passed away); and second, that the Magistrate took cognizance without hearing the accused, allegedly violating Section 223(1) of the Bhartiya Nagrik Suraksha Sanhita (BNSS), 2023

pp. 4-5

02Issues

i.1. Whether a complaint under Section 138 of the N.I. Act is maintainable when filed by a Power of Attorney holder on behalf of a proprietary concern

p. 9

ii.2. Whether the mandatory provision of hearing the accused before taking cognizance under Section 223(1) of the BNSS, 2023, applies to proceedings under the N.I. Act

p. 5, 15

03Law Applied

Section 142 of the N.I. Act, which prescribes the procedure for taking cognizance of cheque dishonor.

p. 15

Supreme Court precedents in M/s. Shankar Finance & Investments v. State of Andhra Pradesh and A.C. Narayanan v. State of Maharashtra, which establish that a PoA holder can validly initiate criminal proceedings on behalf of a principal/proprietary concern.

p. 10, 13

The principle that the N.I. Act is a "complete Code in itself," overriding general procedural requirements of the BNSS/CrPC where specific procedures are provided.

p. 15

Provisions in the judgment · 5 · Linked ones open on LawLens

Bharatiya Nagarik Suraksha Sanhita, 2023 Section 223 Section 528

Negotiable Instruments Act, 1881 Section 138 Section 141 Section 142

04Reasoning

The Court observed that the complaint’s title explicitly identified the complainant as the PoA holder of the firm, satisfying the legal requirement that the agent acts for the principal rather than in a personal capacity.

p. 10, 14

Regarding the BNSS challenge, the Court reasoned that Section 142 of the N.I. Act contains a non-obstante clause ("Notwithstanding anything contained in the Code...") and provides a specific statutory scheme for cognizance, rendering the prior-hearing requirement of Section 223(1) of the BNSS inapplicable.

pp. 15-16

The Court further noted that the trial had already advanced significantly—the plea was recorded, and the PoA holder was currently being cross-examined—meaning the petitioners' challenges regarding authority and knowledge were matters of evidence for the trial court to decide.

p. 17

05Holding

pp. 16-17

The interim relief was vacated, and the request for a stay on the judgment to approach the Supreme Court was rejected due to the advanced stage of the trial.

pp. 18-19

LawLens.Gujarat High Court

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