Special Power of Attorney Holder's knowledge of transaction, though unstated in complaint, valid if sworn statement confirms awareness and holder is party to transaction.

The third Petitioner-Company and the Respondent entered into a transaction for the sale of land, formalized by a registered sale deed

In furtherance of this, the third petitioner issued four post-dated cheques totaling ₹91,65,000/- as part of the sale consideration

On June 20, 2025, these cheques were dishonoured for insufficient funds

The Respondent, through her Special Power of Attorney (SPA) holder, issued a legal notice on July 17, 2025, and subsequently initiated proceedings under Section 138 of the Negotiable Instruments Act, 1881 (the Act)

The concerned Court took cognizance of the offence and registered C.C.No.44968 of 2025

The petitioners sought to quash these proceedings primarily on two grounds: first, that the SPA holder did not explicitly aver in the complaint that he was aware of the transaction, and second, that a civil suit (O.S.No.5 of 2026) for recovery of money based on the same cause of action was pending

It was an admitted fact that the SPA holder, Sri S. Manohar, was one of the signatories to the sale deed, along with the complainant (his mother) and his brother

The SPA holder, in his sworn statement, affirmed that he was "well aware of the facts of the case and hence, competent to swear to this affidavit"

The complainant had granted the SPA to her son due to her health issues, specifically suffering from cancer

1. Whether a complaint filed under Section 138 of the Negotiable Instruments Act, 1881, by a Special Power of Attorney holder is maintainable if the complaint itself does not explicitly state that the power of attorney holder is aware of the transaction

2. Whether the pendency of a civil suit for recovery of money for the same cause of action bars the initiation or continuation of criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881

The court applied Section 138 of the Negotiable Instruments Act, 1881, pertaining to the dishonour of cheques

It relied on the Supreme Court's judgment in A.C. Narayanan v. State of Maharashtra, (2014) 11 SCC 790, which established that a power of attorney holder must aver complete awareness of facts for a complaint under Section 138 to be entertainable

The court also applied the principle that civil and criminal proceedings can run concurrently, citing D. Purushotama Reddy v. K. Sateesh, (2008) 8 SCC 505 and CREF Finance Limited v. Shanthi Homes Private Limited, 2013 SCC OnLine Kar 7562, which held that simultaneous civil suits and Section 138 complaints for the same cause of action are maintainable

The Court analyzed the first issue by distinguishing the instant case from a typical scenario where a stranger SPA holder might lack specific knowledge.

It noted that the SPA holder, Sri S. Manohar, was not a stranger but a signatory to the underlying sale deed transaction

Despite the complaint not explicitly averring his awareness, his sworn statement clearly stated he was "well aware of the facts of the case" and competent to depose

The court reasoned that given his direct involvement as a signatory, it would be "superfluous" to insist on a specific averment of awareness in the complaint itself

The court further acknowledged the complainant's reason for granting SPA (health issues)

Therefore, the absence of a specific line in the complaint itself, in these "peculiar facts," was deemed not to vitiate the complaint or its maintainability

Regarding the second issue, the court found the argument untenable, citing well-established legal principles.

It referred to D. Purushotama Reddy v. K. Sateesh and CREF Finance Limited v. Shanthi Homes Private Limited, both affirming that a civil suit for money recovery and a criminal complaint under Section 138 of the Act can proceed "hand in hand" or "simultaneously"

The court underscored that one aims at penalizing cheque dishonour, while the other seeks money recovery under general law, thus serving distinct purposes

The court further held that the pendency of a civil suit for recovery of money does not preclude the parallel initiation or continuation of criminal proceedings under Section 138 of the NI Act

Consequently, finding no merit in the petitioners' arguments, the criminal petition was dismissed