IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27th DAY OF NOVEMBER, 2019 BEFORE THE HON’BLE MR.JUSTICE B.A.PATIL CRIMINAL APPEAL No.328/2019 BETWEEN:
Aditya Enterprises, No.96, 2nd Cross, KEB Layout, Sanjaynagar, Bengaluru – 560 094. Represented by its Power of Attorney Holder, Mr. Pradeep Kumar Gattani, Aged about 50 years.
(By Sri. Anand Muttalli, Advocate for Sri. Vamshi Krishna, Advocate) AND:
Mr. Adarsh N.U., No.31, Sri Veerabadrreshwara Nilaya, 2nd Floor, 11th Cross, Papareddy Palya, Near Deepa Complex, Bengaluru – 560 072. Also at:
C/o Umapathi Gowda, Nelli Koppa, Sagar Taluk, Shimoga – 577 417.
…Appellant …Respondent (Respondent served and unrepresented) This Criminal Appeal is filed under Section 378(4) of Cr.P.C. praying to set aside the order dated 04.01.2019 passed by the XV A.C.M.M., Bangalore in C.C. No.4410/2018 – acquitting the respondent/accused for the offence p/u/s 138 of N.I. Act.
This Criminal Appeal coming on for Admission, this day the Court delivered the following:-
J U D G M E N T This appeal has been preferred by the complainant- appellant challenging the judgment passed by XV Additional Chief Metropolitan Magistrate Court, Bengaluru, in C.C.No.4410/2018 dated 4.1.2019, wherein the complaint was dismissed and accused was acquitted.
2. I have heard the learned counsel appearing for the appellant. Though notice is served to the respondent, he remained absent, there is no representation.
3. Though this case is listed for admission, with the consent of the learned counsel appearing for the appellant, the same is taken up for final disposal.
4. The factual matrix of the case of the complainant are that the accused has approached the complainant in the month of April, 2017 for financial assistance. The complainant mobilized the fund and lent an amount of Rs.3,25,000/-. Accused agreed to repay the same within six months with 16% interest per annum. After expiry of the said period accused issued cheque bearing No.000850 dated 20.12.2017 drawn on ICICI Bank, when the said cheque was presented through the banker of the complainant, it was returned unpaid with an endorsement ‘payment stopped by the Drawer’ and memo has been issued on 21.12.2017. Complainant got issued a legal notice on 9.1.2018, it was served to the accused on 12.1.2018. Despite service of legal notice accused failed to pay the cheque amount and as such the complaint was registered. After recording the sworn statement of the complainant, the learned Magistrate took cognizance and secured the presence of the accused and also his plea was recorded. Accused pleaded not guilty, he claims to be tried and as such the trial was fixed.
5. On behalf of the complainant the special power of attorney was examined as PW1 and got marked nine documents as Exs.P1 to P9, thereafter the statement of the accused was recorded and accused got examined himself as DW1 and not marked any documents. After hearing the arguments, the learned Magistrate dismissed the complaint.
6. The main grounds urged by the learned counsel for the appellant is that the reasons adopted by the Court below while dismissing the complaint by not accepting the evidence of power of attorney is illegal and contrary to law. It is his further submission that in view of the decision of the Hon’ble Apex Court in the case of A.C.Narayanan Vs. State of Maharashtra and another reported in (2015) 12 SCC 203, if the power of attorney holder is very much acquainted and was having the knowledge of the transaction, then under such circumstances the Magistrate can rely upon the affidavit filed by the power of attorney and the accused can be convicted. It is his further submission that in the said decision five guidelines have been made, under what circumstances, the power of attorney can be considered to be legal and acceptable. The trial Court without looking into the factual matrix of the case has come to a wrong conclusion. In the complaint it has been specifically contended that the power of attorney holder is none other than the husband of the complainant and he was acquainted with the factual matrix and even during the course of cross-examination of the power of attorney it has been suggested that he is not having any knowledge about the financial transaction and he is not responsible, the said suggestions have been denied. That itself clearly goes to show that the power of attorney holder who came to be examined as PW1 was fully aware of the transaction and even the material indicates that he was also present when the said transaction has taken place.
Without looking into the said factual matrix of the case, the trial Court has erroneously came to a wrong conclusion and has wrongly interpreted the decision and has dismissed the complaint. It is his further submission that the appellant-complainant has proved his case beyond all reasonable doubt. Even the respondent-accused has also admitted the signature on the cheque issued by him. When the cheque is from the account of the accused and the signature has been admitted, then under such circumstances, the Court below ought to have accepted the evidence and convicted the accused. It is his further submission that the only defense kept open to the accused is to rebut the said presumption but the accused has not rebutted the said evidence. Without looking to the said factual matrix, the trial Court has only decided the case holding that the power of attorney cannot give the evidence on behalf of the complainant and the evidence adduced by him is not sustainable and accordingly it is not considered to be evidence and it is not having value. In that light, it has come to a wrong conclusion and has wrongly dismissed the complaint. On these grounds, he prayed to allow the appeal and to set aside the impugned order and the matter may be remitted back to the Court below to decide the case on merits in accordance with law.
7. I have carefully and cautiously gone through the submissions made by the learned counsel for the appellant and I have perused the lower Court records.
8. In order to prove the case of the complainant, he got examined his Special Power of Attorney holder as PW.1. The said fact is not in dispute. While discussing, though the trial Court has observed that it has gone through the decision of the Hon’ble Apex Court in the case of A.C. Narayanan (quoted supra), but while considering the points in controversy it has wrongly appreciated the facts and has come to a wrong conclusion. The decision in the case of A.C. Narayanan (quoted supra), wherein, at paragraph Nos.14 and 15 it has been observed as under:
“14. The second question relating to verification of power-of-attorney holder on oath as prescribed under Section 200 of the Code was answered as follows: (A.C. Narayanan case[A.C. Narayanan v. State of Maharashtra, (2014) 11 SCC 790 : (2014) 4 SCC (Civ) 343] , SCC pp. 807-08, paras 27 & 29-32) “27. The stand of the appellant in Criminal Appeal No. 73 of 2007 is that no complaint can be filed and no cognizance of the complaint can be taken if the complaint is by the power-of- attorney holder, since it is against Section 200 of the Code and deserves to be rejected. There is no dispute that complaint has to be filed by the complainant as contemplated by Section 200 of the Code, but the said section does not create any embargo that the attorney holder or legal representative(s) cannot be a complainant.
*** 29. From a conjoint reading of Sections 138, 142 and 145 of the NI Act as well as Section 200 of the Code, it is clear that it is open to the Magistrate to issue process on the basis of the contents of the complaint, documents in support thereof and the affidavit submitted by the complainant in support of the complaint. Once the complainant files an affidavit in support of the complaint before issuance of the process under Section 200 of the Code, it is thereafter open to the Magistrate, if he thinks fit, to call upon the complainant to remain present and to examine him as to the facts contained in the affidavit submitted by the complainant in support of his complaint. However, it is a matter of discretion and the Magistrate is not bound to call upon the complainant to remain present before the court and to examine him upon oath for taking decision whether or not to issue process on the complaint under Section 138 of the NI Act. For the purpose of issuing process under Section 200 of the Code, 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 NI Act. It is only if and where the Magistrate, after considering the complaint under Section 138 of the NI Act, documents produced in support thereof and the verification in the form of affidavit of the complainant, is of the view that examination of the complainant or his witness(s) is required, the Magistrate may call upon the complainant to remain present before the court and examine the complainant and/or his witness upon oath for taking a decision whether or not to issue process on the complaint under Section 138 of the NI Act.
30. 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 NI 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.
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.
32. Similar substantial questions were raised in the appeal arising out of SLP (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 authorised 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.”
15. While holding that there is no serious conflict between the decisions in “M.M.T.C.[M.M.T.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] ”, the larger Bench clarified the position and answered the questions framed in the following manner: (A.C. Narayanan case [A.C. Narayanan v. State of Maharashtra, (2014) 11 SCC 790 :
(2014) 4 SCC (Civ) 343] , SCC pp. 808-09, para 33) “33.1(i) Filing of complaint petition under Section 138 of the NI Act through power of attorney is perfectly legal and competent.
33.2(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.
33.3(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.
33.4(iv) 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 complaint under Section 138 of the NI 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 NI Act.
33.5(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.”
9. On close reading of the above said paragraphs of the decision of the Hon’ble Apex Court, it has laid down that the power of attorney holder may be allowed to file, appear and depose for the purpose of issuance of process for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. It has further observed that the attorney holder cannot file a complaint in his own name as if he is the complainant and it has been further observed that 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.
10. Keeping in view the above said propositions of law, the complaint if it is seen at paragraph No.2, it has been contended that the complainant has examined its power of attorney holder - Mr. Pradeep Kumar Gattani and the power of attorney has been produced and even in the evidence also, the same has been reiterated and even during the course of cross-examination of PW.1, it has been elicited that the said Aditya Enterprises is belonging to his wife and accused was known to the power of attorney holder and to his wife since four years and the other suggestions have been denied. Even it has been suggested at paragraph No.6 that Aditya Enterprises is not in the name of his wife, he was not having any personal knowledge about the said transaction and he is not having any responsibilities. All these suggestions have been denied. That itself clearly goes to show that the power of attorney holder was having full knowledge regarding the said transactions and in pursuance of the same, he has been fully cross-examined and deposed that he has filed all the documents. Under such circumstances, the trial Court ought not to have come to the conclusion that the power of attorney holder, who has been examined as PW.1, his evidence is not sustainable and accordingly his evidence has no evidentiary value and does not survive for consideration. It ought to have decided the case on merits by taking into consideration of the above said decision, but the trial Court erroneously by interpreting the judgment of the Hon’ble Apex Court has arrived to a wrong conclusion.
11. In that light, I am of the considered opinion that the appellant has made out a case. However, on going through the judgment of the trial Court, the trial Court has not whispered anything on the merits of the case and this Court could have considered the case on merits and also ought to have disposed off the matter. However unfortunately, the accused has remained absent before this Court. Hence, I am not inclined to take the case on merits and decide the case. If the Court below gives one more opportunity to both the parties and decide the case on merits, then it is going to meet the ends of justice.
12. In that light, appeal is allowed and the judgment passed by the Court of the XV Additional Chief Metropolitan Magistrate at Bangalore City in C.C. No.4410/2018 dated 04.01.2019 is set aside and is remitted to the trial Court with a direction to the effect that the case may be reheard and dispose off in accordance with law on merits with an outer limit of three months from the date of the receipt of the copy of this order.
Registry is directed to send back the lower Court records forthwith.
Sd/-
JUDGE AP/VBS