Dismissed

M.Abdul Basheer v. K.K.Saifudheen

Kerala HC28 Mar 2016CRL.A/959/2004

Case brief

AI extract

What is this about?

The High Court of Kerala dismissed this appeal against acquittal in a Section 138 cheque dishonour case. The court held that while POA holders can file complaints, the specific POA holder examined as a witness must have direct knowledge of the transaction, which was absent here.

What did the court decide?

The criminal appeal was dismissed; the acquittal of the accused by the trial court was upheld.

M.Abdul Basheer Vs K.K.Saifudheen — Cheque Dishonour | Kerala HC (2016)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR. JUSTICE P.D.RAJAN

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MONDAY, THE 28TH DAY OF MARCH 2016/8TH CHAITHRA, 1938

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CRL.A.NO. 959 OF 2004 ( )

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AGAINST CRL.L.P. NO.320/2004 OF HIGH COURT OF KERALA DATED 07-06-2004

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AGAINST CC. No. 619/2001 OF JUDICIAL FIRST CLASS MAGISTRATE COURT, NILAMBUR DATED 22.04.2003.

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APPELLANT(S)/COMPLAINANT::

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M.ABDULBASHEER, S/O. MUHAMMED, THANIKKAL VEEDU, MAMPAD AMSOM, VADAPURAM P.O.,, REPRESENTED BY POWER OF ATTORNEY HOLDER N.DAS, NEDUMKANDATHIL HOUSE, MAVIPOYIL, AMARAMBALAM,, NILAMBUR.

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BY ADV. SRI.P.SAMSUDIN

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RESPONDENT(S)/ACCUSED AND STATE::

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1. K.K.SAIFUDHEEN, S/O. ASEEZ, KOADAKKADAN VEEDU,

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RESIDING AT MANALODI, NILAMBUR AMSOM.

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2. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.

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R1 BY ADV. SRI.P.VENUGOPAL (1086/92) R2 BY PUBLIC PROSECUTOR SRI.DHANESH MATHEW MANJOORAN

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THIS CRIMINAL APPEAL HAVING BEEN FINALLY HEARD ON 28-03-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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P.D. RAJAN, J.

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Crl. Appeal No.959 of 2004

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Dated this the 28^th day of March, 2016

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J U D G M E N T

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This appeal is preferred against the judgment

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in C.C. No.619 of 2001 of the Judicial First Class Magistrate Court, Nilambur. Appellant filed the complaint in the trial court on the allegation that the accused borrowed a sum of Rs.25,000/- (Rupees twenty five thousand only) from the complainant and in discharge of that debt, he issued a cheque drawn on Nilambur Co-operative Urban Bank. When the cheque was presented for encashment, it was dishonoured for the reason 'funds insufficient'. The complainant demanded the amount by giving a notice in writing, but there was no repayment. In the circumstance, he filed the above complaint.

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During trial, he went abroad, hence power of attorney holder was examined as PW1. His documents were marked as Exts.P1 to P5. Incriminating

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circumstances brought out in evidence were denied by the accused while questioning him. He did not adduce any defence evidence. The learned Magistrate acquitted the accused. Being aggrieved by that, he approached this court.

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The learned counsel appearing for the appellant contended that the attorney holder deposed about the entire transaction in the trial court, and that evidence is admissible. The learned Magistrate acquitted the accused without considering the evidence advanced by the appellant.

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Learned counsel appearing for the 1^st respondent contended that the deed of power of attorney was not produced in the trial court. The name of the power of attorney holder was not mentioned in the complaint and the power of attorney holder was not present at the time of transaction. Therefore, his evidence is not admissible.

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According to Section 138 of the N.I. Act, where any cheque drawn by a person on an account maintained by him with a bank for payment of any

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amount to another person from that account, for the discharge of any debt or liability, is returned by the bank, either because of the amount in that account is insufficient to honour the cheque or that it exceeds the amount arranged from that account, such person shall be deemed to have committed an offence under Section 138 of the Negotiable Instruments Act. This deemed provision is subject to the statutory condition that the cheque has to be presented within the statutory period in which it is drawn or within the period of its validity. Secondly, the payee or holder of the cheque has to make a demand for such amount by giving a notice in writing to the drawer of the cheque within 30 days and nonpayment of due amount within 15 days after receipt of notice by the drawer of the cheque.

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Section 142 of the Negotiable Instrument Act reads as follows:

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Cognizance of offences;- 1. Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974)-

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(a) no court shall take cognizance of any offence punishable under Section 138 except upon a complaint, in

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writing, made by the payee or, as the case may be, the holder in due course of the cheque;

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(b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138;

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[Provided that the cognizance of a complaint may be taken by the Court after the prescribed period, if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period]

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(c) no court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under Section 138.

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(2) The offence under Section 138 shall be inquired into an tried only by a court within whose local jurisdiction-

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(a) if the cheque is delivered for collection through an account, the branch of the bank where the payee or holder in due course, as the case may be, maintains the account, is situated; or

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(b) if the cheque is presented for payment by the holder or holder in due course, otherwise through an account, the branch of the drawee bank where the drawer maintains the account, is situated.

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Explanation.- For the purposes of clause (a), where a cheque is delivered for collection at any branch of the bank of the payee or holder in due course, then, the cheque shall be deemed to have been delivered to the branch of the bank in which the payee or holder in due course, as the case may be, maintains the account.

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According to Sec.142 of the NI Act, no court

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shall take cognizance of any offence punishable under Sec.138, except upon a complaint in writing made by the

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payee or as the case may be, the holder in due course of the cheque. Therefore, the non obstante clause under Sec.142 provides that only two categories of person ie., payee or the holder in due course of the cheque can file a complaint under Sec.138 of the NI Act. In this case, after filing the complaint, the complainant went abroad, subsequently the power of attorney holder was examined in this case to prove the transaction.

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The general law is that anyone can set the criminal law in motion by filing a complaint before a Magistrate entitled to take cognizance under Section 190 of the Code. If a Statute prescribes any special criteria for putting the criminal law in motion, no court can take cognizance of the offence by violating those special criteria. Section 190 of the Code does not indicate any qualification for the complainant. According to S.142 of the N.I. Act, no Court shall take cognizance of the offence under S.138, except upon a complaint in writing made by the payee or the holder in due course of the cheque. But when a special statute prescribes an offence and provides special provision for taking cognizance of such offences

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under the Act, the complainant must satisfy the eligibility criterion prescribed by the statute for taking cognizance of the offence. Apex Court in Vishwa Mitter v. O.P. Poddar [1983 4 SCC 701] held that any one can set the criminal law in motion by filing a complaint before a Magistrate to take cognizance. In M.M.T.C. and Anr . vs. Medchl Chemicals and Pharma (P) Ltd. and Anr [2002 1 SCC 234], a Division Bench of the Apex Court has opined that "In the present case, the only eligibility criteria prescribed by Section 142 is that the complaint must be by the payee or the holder in due course. This criteria is satisfied as the complaint is in the name and on behalf of the appellant Company". In Janki Vashdeo Bhojwani and Anr . v. Indusind Bank Ltd. and Ors., [2005 2 SCC 217] it was held that Order 3 Rules 1 and 2 CPC empowers the holder of power of attorney to 'act' on behalf of the principal. If the power of attorney holder has rendered some 'acts' in pursuance of power of attorney, he may depose for the principal in respect of such acts, but he cannot depose for the principal for the acts done by the principal and not by him. Similarly, he cannot

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depose for the principal in respect of the matter of which only the principal is entitled to be cross -examined." In short filing complaint by the power of attorney is perfectly legal.

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It is true that a power of the attorney holder can sign a complaint and file a complaint on behalf of the payee or holder in due course. This position was discussed by the larger Bench of the Supreme Court in A.C. Narayanan v. State of Maharashtra [2013 (4) KLT 21 (SC), wherein held the principle as follows:

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"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

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and thereby will be invalid in law. Nevertheless, the general power of attorney itself can be cancelled and be given to another person.

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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:

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(i) Filing of complaint petition under Section 138 of N.I Act through power of attorney is perfectly legal and competent.

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(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.

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(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.

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(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.

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(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

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given to another person.

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Therefore, it is pertinent to say that the

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power of attorney holder has to make an explicit assertion as to the knowledge about the transaction in question which also has to be specifically mentioned in the complaint. Here, such averment is not found in the complaint. The power of attorney holder has no direct knowledge regarding the transaction. In such a circumstance, he cannot be examined as a witness in a complaint filed under Sec.138 of the Negotiable Instruments Act. There is no bar for filing a complaint under Sec.138 of the NI Act by the power of attorney holder and initiate proceedings against the accused. Whenever he approaches the court for adducing evidence, it has to be specifically stated in the complaint that he has direct knowledge regarding the transaction. In the absence of such averments, the learned Magistrate rightly acquitted the accused.

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Normally Court will not non suit a person on the ground of technicalities. However, the question of competency to institute a prosecution under S.138 of the

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N.I. Act on behalf of the complainant is not a technical matter, but it has to satisfy the condition under S.142 (a) of the Act.

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There is no merit in this appeal and it is

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dismissed accordingly.

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Sd/- P.D. RAJAN JUDGE

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/ True Copy /