Allowed

United Phosphorus Ltd., Guntur, rep. by its Accountant and v. M/s. Jaikisan Seeds, rep. by its Prop. Pothureddy Krishna

Telangana HC15 Apr 2010CRLA/59/2003

Case brief

AI extract

What is this about?

The High Court allowed a criminal appeal, setting aside an order where the Sessions Judge had quashed a conviction under Section 138 NI Act. The Sessions Judge had relied on S.P. Sampathy to hold that POA holders cannot file complaints. The High Court noted that S.P. Sampathy was overruled by a Full Bench in K.S. Ramachander Rao, which held POA holders can file complaints. The matter was remanded

What did the court decide?

Criminal Appeal allowed; impugned judgment set aside; matter remanded to Sessions Judge for fresh disposal within three months.

United Phosphorus Ltd., Guntur, rep. by its Accountant… — Cheque Dishonour | Telangana HC (2010)

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IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD

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THURSDAY, THE FIFTEENTH DAY OF APRIL TWO THOUSAND AND TEN

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PRESENT

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THE HON'BLE SRI JUSTICE G.V.SEETHAPATHY

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CRIMINAL APPEAL NO.59 OF 2003

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Between: United Phosphorus Limited, Guntur

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.... APPELLANT

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AND

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M/s. Jaikisan Seeds and others

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....RESPONDENTS

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The Court delivered the following:

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THE HON'BLE SRI JUSTICE G.V.SEETHAPATHY

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CRIMINAL APPEAL NO.59 OF 2003

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JUDGMENT:

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This criminal appeal is directed against the judgment, dated 20.09.2002, passed in Crl.A.No.2007 of 2000 on the file of V-Additional Sessions Judge, Guntur, wherein the said appeal filed by respondent Nos.1 and 2 herein/accused was allowed setting aside the conviction recorded against them in C.C. No.123 of 1997 by judgment, dated 26.04.2000, for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881, (for short, “the Act”) and the sentence of simple imprisonment imposed for a period of six months and fine of

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Rs.5,000/-, was set aside.

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2. Heard the learned counsel for the appellant/complainant and the learned counsel for the respondents/accused. Perused the record.

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3. The appellant herein filed a complaint against respondent Nos.1 and 2, alleging offence under Section 138 of the Act and the same was taken cognizance by the learned IV-Additional Munsif Magistrate, Guntur, in C.C.No.123 of 1997. According to the appellant/complainant, they are manufacturing and selling insecticides and pesticides and A1 is a proprietary firm and A2 is the proprietor of A1 firm and was having dealings with the complainant in purchasing of pesticides and fertilizers on cash and credit basis. The complainant alleges that in the course of the said business transaction the accused became due for a sum of Rs.9,40,797-40 ps by 10.01.1997 and A2 in partial discharge of the said liability issued cheques for Rs.1,00,000/- on 10.01.1997 and Rs.2,00,000/- on 18.01.1997 drawn on Bank of Baroda,

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Shadnagar, Mahabubnagar District, and when the complainant presented them in Corporation Bank, Guntur for collection, they were dishonoured for lack of sufficient funds. The complainant thereafter gave a statutory registered notice to the accused, which was received by A2 on behalf of himself and also the firm, but the amount was not paid. Hence, the complaint was filed.

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4. The accused appeared before the learned Magistrate and denied the offence and pleaded not guilty.

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5. During trial, PWs.1 and 2 were examined and Exs.P-1 to P-10 were marked on behalf of the complainant. No oral or documentary evidence was adduced on behalf of the accused.

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6. On consideration of the evidence available on record, the learned Magistrate found the accused guilty of the offence punishable under Section 138 read with Section 142 of the Act and convicted them for the

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same and imposed sentence of simple imprisonment for six months and to pay fine of Rs.5,000/-. Aggrieved by the same, the accused preferred an appeal in Crl.A.No.207 of 2000 before the V-Additional Sessions Judge, Guntur. By the impugned judgment, dated 20.09.2002, the learned Sessions Judge set aside the conviction and sentence imposed against the accused in C.C.No.123 of 1997 and allowed the appeal. Hence, the present appeal by the complainant.

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7. As seen from the impugned judgment of the learned Sessions Judge, the main contention raised by the accused was that PW.1 had no locus standi to file the case, as he is not a proper person to represent under the General Power of Attorney, marked as Ex.P-1. In respect of the same, the accused relied on a Division Bench decision of this Court i n S.P. Sampathy Vs. Smt. Manju Gupta and anothe r^[1] , wherein it was held that when law demands that complaint should be in writing of payee, it means that it should be made and signed by payee or ‘holder in due course’ and the Power of Attorney holder in due course of the cheque and hence the complaint cannot be filed by Power of Attorney holder on behalf of payee under Section 138 of the Act. PW.1 was stated to be the General Power of Attorney holder for the complainant company by virtue of Ex.P-1. The learned Sessions Judge relied on another Division Bench decision of this Court and held that the complaint signed and filed by PW.1 is not maintainable.

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8. Ex.P-1 was executed by the Managing Director and Joint Director of the complainant company in the name of S. Mallikharjuna Rao to look after the day-to-day affairs of the company and also to look after the legal matters of the company. Subsequently, Ex.P-1 was revoked by means of revocation deed Ex.P-9, dated 15.03.1997, and another General Power of Attorney was executed by the Managing Director and the Joint Managing Director in favour of PW.1 on 17.03.1997 under Ex.P-10. The learned Sessions Judge held that the Power of Attorney was executed in favour of PW.1. The learned

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Sessions Judge relied on a decision of this Court in S.P. Sampathy’s case (1 supra) and held that the complaint cannot be filed by a Power of Attorney holder on behalf of the payee and it can only be filed in writing by the payee or the holder in due course and on that ground itself the judgment of the trial Court is liable to be set aside. Subsequently, the decision referred above in S.P. Sampathy’s case (1 supra) came up for consideration before a Full Bench of this Court in K.S. Ramachander Rao Vs. State of A.P. and anothe r^[2] , and the decision in S.P. Sampathy’s case (1 supra) was overruled. In the subsequent decision in K.S. Ramachander Rao’s case (2 supra) it was held as follows:

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“ “Complainant” is not defined either in the Cr.P.C. or in the General Clauses Act. Therefore, for the purpose of Section 200 Cr.P.C. ‘complainant’ should be taken to mean a person who presents the complaint to the Court or who makes the complaint to the Court. That should be so would be clear from the fact that if a company or other juristic person gives the complaint, it cannot be examined. Somebody on its behalf who can speak about the facts of the case would be examined when he presents the complaint on behalf of a juristic person. The same analogy applies to a power of attorney also. If the complainant himself is able to come to Court and present the complaint in person, why should be or where is the need or necessity for him to file the complaint through his power of attorney? In fact, in Nirmaljit Singh Hoon v. State of West Bengal, MANU/SC/0196/1972 : [1973] 2SCR66, it is held that the object of examination of the complainant under Section 200 Cr.P.C. is to ascertain if there is prima facie case and sufficient grounds for proceeding against the accused. So, the power of attorney who presented the complaint on behalf of the ‘payee’ or the ‘holder in due course’ of a dishonoured cheque can be examined on behalf of the complainant to find out if there is prima facie case against the accused. In view of Section 139 read with 146 of the Act for finding out prima facie case against the accused, the only other requirement would be about the issuance of statutory notice under Section 138 (b) of the Act to the accused, which also would be

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evidenced by documents. In view of the above, Section 60 of Evidence Act is of no help in deciding the point for consideration. Similarly, A.K.Gupta case (supra) has no relevance for deciding this point.”

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9. It was further held thus:

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“In Ram Chandra case (supra) it is clearly held that complaint filed through the power of attorney of a person aggrieved, tantamounts to filing of the complaint by the person aggrieved. For that reason, and since the right accrued to the payee or the holder in due course of a dishonoured cheque does not fall within the three exceptions to the rule Qui Facit Per Alium Facit Per Se recognized by Section 138 of the Contract Act i.e., since the act to be performed (i) is not personal in its character, or (ii) is not annexed to any public office, and (iii) does not involve any fiduciary obligations, we hold that the power of attorney of a payee or a holder in due course of a dishonoured cheque can file a complaint for an offence under Section 138 of the Act after obtaining permission from the Court, either before or after filing of the complaint. The reference is answered accordingly. In view thereof, the decision in S.P. Sampathy case (supra) stands overruled.”

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10. In view of the fact that the decision referred in

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S.P. Sampathy’s case (1 supra) came to be overruled by a Full Bench decision of this Court in K.S. Ramachander Rao’s case (2 supra), the finding recorded by the learned Sessions Judge to the effect that the complaint filed by the General Power of Attorney holder is not maintainable, following the decision referred in S.P. Sampathy’s case (1 supra), is no longer sustainable and the same is accordingly set aside in view of the subsequent Full Bench decision of this Court in K.S. Ramachander Rao’s case (2 supra). As the criminal appeal was mainly disposed of on the ground of maintainability of the complaint by the Power of Attorney holder and without going into the other merits of the case in detail, it is held to be a fit case to remit the matter to the learned Sessions Judge for fresh disposal in accordance with law.

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11. In the circumstances, the Criminal Appeal is allowed and the matter is remitted to the learned V-Additional Sessions Judge, Guntur, for fresh disposal according to the law and the impugned judgment, dated 20.09.2002, passed in Crl.A.No.207 of 2000 is set aside in the light of the observations made hereinabove. Having regard to the fact that the Criminal Appeal is of the year 2000, the learned Sessions Judge is directed to dispose of the same within a period of three months from the date of receipt of a copy of this order.

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____________________ G.V.SEETHAPATHY, J

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15.04.2010 MD

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[1] 2002 (1) ALT (Cri) 497 [2] 2005 (2) ALD 572

United Phosphorus Ltd., Guntur, rep. by its Accountant and v. M/s. Jaikisan Seeds, rep. by its Prop. Pothureddy Krishna

Case brief

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United Phosphorus Ltd., Guntur, rep. by its Accountant and v. M/s. Jaikisan Seeds, rep. by its Prop. Pothureddy Krishna

Case brief

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What did the court decide?

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