N.I.Act sect 138 read with 141 / dishonor of cheque by a company..

Head Note : That in this context your petitioner refers to the provisions of Section 141 of the Negotiable Instrument Act, where it has been specifically stated that if the offender is the company then the person who at the time of the offence was committed was in charge of and was responsible to the company for the conduct of the business of the company, other Directors, Manager, Secretary or other officers of the company shall be guilty of the offence, unless the persons referred to above prove otherwise, as per the saving clause of the said section. In section 5 of the Companies Act, also made those officers responsible for crime committed by the company.

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 213 OF 2006

Mannalal Chamaria & Anr.                                      ....Appellants

Versus

State of West Bengal and Anr.                          ...Respondents

WITH CRIMINAL APPEAL NO. 215 OF 2006

AND

CRIMINAL APPEAL NO. 217 OF 2006

J U D G M E N T: Madan B. Lokur, J.

1.       The question arising for consideration in these appeals relates to the alleged failure (and consequential effect) of Pradip Sarkar to specifically state in his complaint filed under Sections 138 and 141 of the Negotiable Instruments Act, 1881 that the appellants/accused persons were in charge of and responsible for the conduct of the business of M/s. Heritage Herbs Ltd. of which they were said to be Directors.

2.     In a complaint filed on 31st March, 2001, Pradip Sarkar alleged that Heritage Herbs had made an offer for collecting money from the market with a view to allot land to the intending investors. On the basis of the offer made, Pradip Sarkar invested an amount of Rs.1,50,000/- and Heritage Herbs issued three receipt-cum-allotment letters for three plots of land to Pradip Sarkar. At the time of handing over the receipt-cum-allotment letters, Pradip Sarkar was also handed over three cheques of Rs. 61,000/- each post dated to 29th October, 2000. These cheques were issued by Heritage Herbs and were signed by Raj Kumar Chamaria as Chairman of the said concern.

3.     All the three cheques were deposited by Pradip Sarkar but were dishonoured by the concerned bank. This led Pradip Sarkar to take steps to issue a notice to and initiate proceedings against Heritage Herbs and Raj Kumar Chamaria under the provisions of Section 138 read with Section 141 of the Negotiable Instruments Act, 1881.

4.     During the pendency of the proceedings Raj Kumar Chamaria died on 10th December, 2003.

5.      Thereafter, Pradip Sarkar moved an application for impleading the appellants as accused persons. The application was allowed and the appellants were impleaded as accused persons by the concerned Magistrate by an order dated 28th April, 2004 and summons issued to them.

6.     Feeling aggrieved by their impleadment and summons issued to them, the appellants preferred Criminal Revision Petitions in the Calcutta High Court, which dismissed the petitions.

7.      The appellants have challenged the order of the Calcutta High Court and the only contention urged is that no specific allegations were made against them either in the complaint as originally filed on 31st March, 2001 or in the amended complaint filed on 28th April 2004.

8.     We have been taken through both the complaints by learned counsel for the appellants and find that there is no allegation worth the name against any of the appellants in either of the complaints. Insofar as the first complaint is concerned, the appellants were not even made parties and therefore there is no question of any allegations being made against them in that complaint. As far as the second complaint is concerned, the only allegation made is to be found in paragraph 6 thereof which reads as follows:-

“That in this context your petitioner refers to the provisions of Section 141 of the Negotiable Instrument Act, where it has been specifically stated that if the offender is the company then the person who at the time of the offence was committed was in charge of and was responsible to the company for the conduct of the business of the company, other Directors, Manager, Secretary or other officers of the company shall be guilty of the offence, unless the persons referred to above prove otherwise, as per the saving clause of the said section. In section 5 of the Companies Act, also made those officers responsible for crime committed by the company.”

9.     The law on the subject is now very well-settled by a series of decisions rendered by this Court and it is not necessary to repeat the views expressed time and again. Suffice it to say, that the law has once again been stated in A.K.Singhania vs. Gujarat State Fertilizer Company Ltd.1 to the effect that it is necessary for a complainant to state in the complaint that the person accused was in charge of and responsible for the conduct of the business of the company. Although, no particular form for making such an allegation is prescribed, and it may not be necessary to reproduce the language of Section 138 of the Negotiable Instruments Act, 1881, but a reading of the complaint should show that the substance of the accusation discloses that the accused person was in charge of and responsible for the conduct of the business of the company at the relevant time. From the averment made in the complaint, which is reproduced above, it can safely be said that there is  no specific or even a general allegation made against the appellants.

10.             Under these circumstances, the complaint against the appellants deserves dismissal. A contrary view taken by the High Court cannot be accepted. Accordingly, the appeals are allowed and the order passed by the High Court is set aside.

……………………………………J

(Ranjana Prakash Desai)

……………………………………J

(Madan B. Lokur)

New Delhi;

March 25, 2014

Doctrine of Double Jeopardy — Negotiable Instruments Act, 1881 – Section 138 – Indian Penal Code, 1860 – Sections 406/420 read with Section 114 – Scope and application of doctrine of double jeopardy

Held: Negotiable Instruments Act, 1881 – Section 138 – Indian Penal Code, 1860 – Sections 406/420 read with Section 114 – Scope and application of doctrine of double jeopardy – Held, In the prosecution under Section 138 N.I. Act, the mens rea i.e. fraudulent or dishonest intention at the time of issuance of cheque is not required to be proved. However, in the case under IPC involved herein, the issue of mens rea may be relevant. The offence punishable under Section 420 IPC is a serious one as the sentence of 7 years can be imposed. In the case under N.I. Act, there is a legal presumption that the cheque had been issued for discharging the antecedent liability and that presumption can be rebutted only by the person who draws the cheque. Such a requirement is not there in the offences under IPC. In the case under N.I. Act, if a fine is imposed, it is to be adjusted to meet the legally enforceable liability. There cannot be such a requirement in the offences under IPC. The case under N.I. Act can only be initiated by filing a complaint. However, in a case under the IPC such a condition is not necessary. There may be some overlapping of facts in both the cases but ingredients of offences are entirely different. Thus, the subsequent case is not barred by any of the aforesaid statutory provisions. The appeal is devoid of any merit and accordingly dismissed.

Sangeetaben Mahendrabhai Patel Vs. State of Gujarat & Anr.

IN THE SUPREME COURT OF INDIA 

CRIMINAL APPELLATE JURISDICTION

Dr. B.S. CHAUHAN AND JAGDISH SINGH KHEHAR, JJ. On  April 23, 2012

CRIMINAL APPEAL NO. 645 of 2012  

J U D G M E N T  : Dr. B.S. CHAUHAN, J.

1. This appeal has been preferred against the impugned judgment and order dated 18.8.2011 passed by the High Court of Gujarat at Ahmedabad in Criminal Misc. Application No. 7807 of 2006, by which the High Court has dismissed the application filed by the present appellant under Section 482 of Criminal Procedure Code, 1973 (hereinafter referred as `Cr.P.C.’) for quashing the I.CR No. 18 of 2004 and Criminal Case No. 5 of 2004 pending before the Chief Judicial Magistrate, Patan, on the plea of double jeopardy for the reason that the  appellant has already been tried and dealt with under the provisions of Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred as `N.I. Act’) for the same offence.

2. Facts and circumstances giving rise to this appeal are that:

A. Respondent No. 2 filed a complaint dated 22.10.2003 i.e. Criminal Case No. 1334 of 2003 under Section 138 of N.I. Act on the ground that the appellant had taken hypothecation loan of Rs. 20 lakhs and had not repaid the same. In order to meet the said liability, the appellant issued cheque bearing no. 59447 and on being presented, the cheque has been dishonoured.  

B. Subsequent thereto on 6.2.2004, the respondent no. 2 filed an FIR being I.C.R. No. 18 of 2004 under Sections 406/420 read with Section 114 of Indian Penal Code, 1860 (hereinafter referred as `IPC’) with the Sidhpur Police Station for committing the offence of criminal breach of trust, cheating and abetment etc.  

C. In the criminal case No.1334 of 2003 filed under Section 138 of N.I. Act, the trial court convicted the appellant. Aggrieved, appellant preferred Appeal No. 12 of 2006, before the District Judge wherein, he has been acquitted. Against the order of acquittal, respondent no. 2 has preferred Criminal Appeal No. 1997 of 2008 before the High Court of Gujarat which is still pending consideration.  

D. Appellant filed an application under Section 482 Cr.P.C., seeking quashing of ICR No. 18 of 2004 and Criminal Case No. 5 of 2004, pending before the Chief Judicial Magistrate, Patan, on the grounds, inter-alia, that it amounts to abuse of process of law. The appellant stood acquitted in criminal case under Section 138 of N.I. Act. Thus, he cannot be tried again for the same offence. In the facts of the case, doctrine of double jeopardy is attracted. The High Court dismissed the said application. Hence, this appeal.

3. Shri Abhishek Singh, learned counsel appearing for the appellant, has submitted that the ICR as well as the criminal case pending before the Chief Judicial Magistrate, Patan, is barred by the provisions of Section 300 Cr.P.C. and Section 26 of the General Clauses Act, 1897 (hereinafter called ‘General Clauses Act’) as the appellant has already been dealt with/tried under Section 138 of N.I. Act for the same offence. Thus, the High Court committed an error in not quashing the said ICR and the criminal case. It amounts to double jeopardy and, therefore, the appeal deserves to be allowed. 

4. On the contrary, Shri Rakesh Upadhyay, learned counsel appearing for the respondent no. 2 and Mr. S. Panda, learned counsel appearing for the State of Gujarat, have vehemently opposed the appeal contending that the provisions of Section 300 Cr.P.C. i.e. `Doctrine of Double Jeopardy’ are not attracted in the facts and circumstances of the case, for the reason, that the ingredients of the offences under Sections 406/420 read with Section 114 IPC are entirely distinct from the case under Section 138 of N.I. Act, and therefore, do not constitute the same offence. The appeal is devoid of any merit and liable to be dismissed.

5. We have considered the rival submissions made by learned counsel for the parties and perused the record. The sole issue raised in this appeal is regarding the scope and application of doctrine of double jeopardy. The rule against double jeopardy provides foundation for the pleas of autrefois acquit and autrefois convict. The manifestation of this rule is to be found contained in Section 300 Cr.P.C; Section 26 of the General Clauses Act; and Section 71 I.P.C. Section 300(1) Cr.P.C. reads:

“A person who has once been tried by a Court of competent jurisdiction for an offence and convicted or acquitted of such offence shall, whilesuch conviction or acquittal remains in force, not be liable to be tried again for the same offence, nor on the same facts for any other offence for which a different charge from the one made against him might have been made under subsection (1) of Section 221, or for which he might have been convicted under sub-section (2) thereof.” 

Section 26 of the General Clauses Act, 1897 reads:

“Provision as to offences punishable under two or more enactments. – Where an act or omission constitutes an offence under two or more enactments, then the offender shall be liable to be prosecuted and punished under either or any of those enactments, but shall not be liable to be punished twice for the same offence.” 

Section 71 of I.P.C. reads:

“Limit of punishment of offence made up of several offences. - Where anything which is an offence is made up of parts, any of which parts is itself an offence, the offender shall not be punished with the punishment of more than one of such his offences, unless it be so expressly provided. …………………………..” 

6. In Maqbool Hussain v. State of Bombay, AIR 1953 SC 325, the Constitution Bench of this Court dealt with the issue wherein the central issue arose in the context of the fact that a person who had arrived at an Indian airport from abroad on being searched was found in possession of gold in contravention of the relevant notification, prohibiting the import of gold. Action was taken against him by the customs authorities and the gold seized from his possession was confiscated. Later on, a prosecution was launched against him in the criminal court at Bombay charging him with having committed the offence under Section 8 of the Foreign Exchange Regulation Act, 1947 (hereinafter called `FERA’) read with the relevant notification. In the background of these facts, the plea of “autrefois acquit” was raised seeking protection under Article 20(2) of the Constitution of India, 1950 (hereinafter called the ‘Constitution’). This court held that the fundamental right which is guaranteed under Article 20 (2) enunciates the principle of “autrefois convict” or “double jeopardy” i.e. a person must not be put in peril twice for the same offence. The doctrine is based on the ancient maxim “nemo debet bis punire pro uno delicto“, that is to say that no one ought to be twice punished for one offence. The plea of “autrefois convict” or “autrefois acquit” avers that the person has been previously convicted or acquitted on a charge for the same offence as that in respect of which he is arraigned. The test is whether the former offence and the offence now charged have the same ingredients in the sense that the facts constituting the one are sufficient to justify a conviction of the other and not that the facts relied on by the prosecution are the same in the two trials. A plea of “autrefois acquit” is not provedunless it is shown that the verdict of acquittal of the previous charge necessarily involves an acquittal of the latter.

7. The Constitution Bench of this Court in S.A.Venkataraman v. Union of India & Anr.,AIR 1954 SC 375, explained the scope of doctrine of double jeopardy, observing that in order to attract the provisions of Article 20 (2) of the Constitution, there must have been both prosecution and punishment in respect of the same offence. The words ‘prosecuted’ and ‘punished’ are to be taken not distributively so as to mean prosecuted or punished. Both the factors must co-exist in order that the operation of the clause may be attractive.

8. In Om Prakash Gupta v. State of U.P., AIR 1957 SC 458; and State of Madhya Pradesh v. Veereshwar Rao Agnihotri, AIR 1957 SC 592, this Court has held that prosecution and conviction or acquittal under Section 409 IPC do not debar trial of the accused on a charge under Section 5(2) of the Prevention of Corruption Act, 1947 because the two offences are not identical in sense, import and content.

9. In Leo Roy Frey v. Superintendent, District Jail, Amritsar & Anr., AIR 1958 SC 119, proceedings were taken against certain persons in the first instance before the Customs Authorities under Section 167(8) of the Sea Customs Act and heavy personal penalties were imposed on them. Thereafter, they were charged for an offence under Section 120-B IPC. This Court held that an offence under Section 120-B is not the same offence as that under the Sea Customs Act:

“The offence of a conspiracy to commit a crime is a different offencefrom the crime that is the object of the conspiracy because the conspiracy precedes the commission of the crime and is complete before the crime is attempted or completed, equally the crime attempted or completed does not require the element of conspiracy as one of its ingredients. They are, therefore, quite separate offences.” 

(Emphasis added) 

10. In The State of Bombay v. S.L. Apte and Anr. AIR 1961 SC 578, the Constitution Bench of this Court while dealing with the issue of double jeopardy under Article 20(2), held:

“To operate as a bar the second prosecution and the consequential punishment thereunder, must be for “the same offence”. The crucial requirement therefore for attracting the Article is that the offences are the same i.e. they should be identical. If, however, the two offences are distinct, then notwithstanding that the allegations of facts in the two complaints might be substantially similar, the benefit of the ban cannot be invoked. It is, therefore, necessary to analyse and compare not the allegations in the two complaints but the ingredients of the two offences and see whether their identity is made out. 

xx xx xx xx xx xx xx 

The next point to be considered is as regards the scope of Section 26 of the General Clauses Act. Though Section 26 in its opening words refers to “the act or omission constituting an offence under two or more enactments”, the emphasis is not on the facts alleged in the two complaints but rather on the ingredients which constitute the two offences with which a person is charged. This is made clear by the concluding portion of the section which refers to “shall not be liable to be punished twice for the same offence”. If the offences are not the same but are distinct, the ban imposed by this provision also cannot be invoked.” 

(Emphasis added) 

11. In Roshan Lal & Ors. v. State of Punjab, AIR 1965 SC 1413, the accused had caused disappearance of the evidence of two offences under sections 330 and 348 IPC and, therefore, he was alleged to have committed two separate offences under section 201 IPC. It was held that neither section 71 IPC nor section 26 of the General Clauses Act came to the rescue of the accused and the accused was liable to be convicted for two sets of offences under section 201 IPC, though it would be appropriate not to pass two separate sentences. A similar view has been reiterated by this Court inKharkan & Ors. v. State of U.P., AIR 1965 SC 83.

12. In Bhagwan Swarup Lal Bishan Lal v. The State of Maharashtra, AIR 1965 SC 682, while dealing with the issue, held:

 “The previous case in which this accused was convicted was in regard to a conspiracy to commit criminal breach of trust in respect of the funds of the Jupiter and that case was finally disposed of by this Court inSardul Singh Caveeshar v. State of Bombay, AIR 1957 SC 747. Therein it was found that Caveeshar was a party to the conspiracy and also a party to the fraudulent transactions entered into by the Jupiter in his favour. The present case relates to a different conspiracy altogether. The conspiracy in question was to lift the funds of the Empire, though its object was to cover up the fraud committed in respect of the Jupiter. Therefore, it may be that the defalcations made in Jupiter may afford a motive for the new conspiracy, but the two offences are distinct ones. Some accused may be common to both of them, some of the facts proved to establish the Jupiter conspiracy may also have to be proved to support the motive for the second conspiracy. The question is whether that in itself would be sufficient to make the two conspiracies the one and the same offence…. The two conspiracies are distinct offences. It cannot even be said that some of the ingredients of both the conspiracies are the same. The facts constituting the Jupiter conspiracy are not the ingredients of the offence of the Empire conspiracy, but only afford a motive for the latter offence. Motive is not an ingredient of an offence. The proof of motive helps a court in coming to a correct conclusion when there is no direct evidence. Where there is direct evidence for implicating an accused in an offence, the absence of proof of motive is not material. The ingredients of both the offences are totally different and they do not form the same offence within the meaning of Article 20(2) of the Constitution and, therefore, that Article has no relevance to the present case.” 

(Emphasis added) 

13. In The State of A.P. v. Kokkiligada Meeraiah & Anr., AIR 1970 SC 771, this Court while having regard to Section 403 Cr.P.C., 1898, held:

“The following important rules emerge from the terms of Section 403 of the Code of Criminal Procedure: (1) An order of conviction or acquittal in respect of any offence constituted by any act against or in favour of a person does not prohibit a trial for any other offence constituted by the same act which he may have committed, if the court trying the first offence was incompetent to try that other offence. 

(2) If in the course of a transaction several offences are committed for which separate charges could have been made, but if a person is tried in respect of some of those charges, and not all, and is acquitted or convicted, he may be tried for any distinct offence for which at the former trial a separate charge may have been, but was not, made. 

(3) If a person is convicted of any offence constituted by any act, and that act together with the consequences which resulted therefrom constituted a different offence, he may again be tried for that different offence arising out of the consequences, if the consequences had not happened or were not known to the court to have happened, at the time when he was convicted. 

(4) A person who has once been tried by a Court of competent jurisdiction for an offence and has been either convicted or acquittedshall not be tried for the same offence or for any other offence arising out of the same facts, for which a different charge from the one made against him might have been made or for which he might havebeen convicted under the Code of Criminal Procedure.” 

(Emphasis added) 

14. The Constitution Bench of this Court in The Assistant Collector of the Customs, Bombay & Anr. v. L. R. Melwani & Anr. AIR 1970 SC 962, repelled the contention of the respondents therein that their criminal prosecution for alleged smuggling was barred because proceedings were earlier instituted against them before Collector of Customs. It was observed that neither the adjudication before the Collector of Customs was a prosecution, nor the Collector of Customs was a Court. Therefore, neither the rule of autrefois acquit can be invoked, nor the issue estoppel rule was attracted. The issue estoppel rule is a facet of doctrine of autrefois acquit.

15. This Court has time and again explained the principle of issue estoppel in a criminal trial observing that where an issue of fact has been tried by a competent court on an earlier occasion and a finding has been recorded in favour of the accused, such a finding would constitute an estoppel or res judicata against the prosecution, not as a bar to the trial and conviction of the accused for a different or distinct offence, but as precluding the acceptance/reception of evidence to disturb the finding of fact when the accused is tried subsequently for a different offence. This rule is distinct from the doctrine of double jeopardy as it does not prevent the trial of any offence but only precludes the evidence being led to prove a fact in issue as regards which evidence has already been led and a specific finding has been recorded at an earlier criminal trial. Thus, the rule relates only to the admissibility of evidence which is designed to upset a finding of fact recorded by a competent court in a previous trial on a factual issue. (Vide: Pritam Singh & Anr. v. The State of Punjab,AIR 1956 SC 415; Manipur Administration, Manipur v. Thokchom Bira Singh, AIR 1965 SC 87; Workmen of the Gujarat Electricity Board, Baroda v. Gujarat Electricity Board, Baroda, AIR 1970 SC 87; and Bhanu Kumar Jain v. Archana Kumar & Anr., AIR 2005 SC 626).

16. In V.K. Agarwal v. Vasantraj Bhagwanji Bhatia & Ors., AIR 1988 SC 1106, wherein the accused were prosecuted under Customs Act, 1962 (hereinafter referred to as `Customs Act’) and subsequently under Gold (Control) Act, 1968, (hereinafter called as `Gold (Control) Act’) it was held that the ingredients of the two offences are different in scope and content. The facts constituting the offence under the Customs Act are different and are not sufficient to justify the conviction under the Gold (Control) Act. It was held that what was necessary is to analyse the ingredients of the two offences and not the allegations made in the two complaints.

17. In M/s. P.V. Mohammad Barmay Sons v. Director of Enforcement AIR 1993 SC 1188, it was held:

“The further contention that under the Sea Custom Act for the self same contravention, the penalty proceedings terminated in favour of the appellant, is of little avail to the appellant for the reasons that two Acts operate in different fields, one for contravention of FERA and the second for evasion of excise duty. The mere fact that the penalty proceedings for evasion of the excise duty had ended in favour of the appellant, does not take away the jurisdiction of the enforcement authorities under the Act to impose the penalty in question. The doctrine of double jeopardy has no application.” (See also: State of Bihar v. Murad Ali Khan & Ors., AIR 1989 SC 1; Union of India etc. etc. v. K.V. Jankiraman etc. etc., AIR 1991 SC 2010; State of Tamil Nadu v. Thiru K.S. Murugesan & Ors., (1995) 3 SCC 273; and State of Punjab & Anr. v. Dalbir Singh & Ors., (2001) 9 SCC 212).

18. In A.A. Mulla & Ors. v. State of Maharashtra & Anr., AIR 1997 SC 1441, the appellants were charged under Section 409 IPC and Section 5 of the Prevention of Corruption Act, 1947 for making false panchnama disclosing recovery of 90 gold biscuits on 21-9-1969 although according to the prosecution case the appellants had recovered 99 gold biscuits. The appellants were tried for the same and acquitted. The appellants were also tried for offence under Section 120-B IPC, Sections 135 and 136 of the Customs Act, Section 85 of the Gold (Control) Act and Section 23(1-A) of FERA and Section 5 of Import and Export (Control) Act, 1947. The appellants filed an application before the Judicial Magistrate contending that on the selfsame facts they could not be tried for the second time in view of Section 403 of the Code of Criminal Procedure, 1898 (corresponding to Section 300 Cr.P.C.). This Court held:

“After giving our careful consideration to the facts and circumstances of the case and the submissions made by the learned counsel for the respective parties, it appears to us that the ingredients of the offences for which the appellants were charged in the first trial are entirely different. The second trial with which we are concerned in this appeal, envisages a different fact-situation and the enquiry for finding out facts constituting offences under the Customs Act and the Gold (Control) Act in the second trial is of a different nature……. Not only the ingredients of offences in the previous and the second trial are different, the factual foundation of the first trial and such foundation for the second trial is also not indented (sic). Accordingly, the second trial was not barred under Section 403 CrPC of 1898 as alleged by the appellants.” 

(Emphasis added) 

19. In Union of India & Ors. v. Sunil Kumar Sarkar, AIR 2001 SC 1092, this Court considered the argument that if the punishment had already been imposed for Court Martial proceedings, the proceedings under the Central Rules dealing with disciplinary aspect and misconduct cannot be held as it would amount to double jeopardy violating the provisions of Article 20 (2) of the Constitution. The Court explained that the Court Martial proceedings deal with penal aspect of the misconduct while the proceedings under the Central Rules deal with the disciplinary aspect of the misconduct. The two proceedings do not over-lap at all and, therefore, there was no question of attracting the doctrine of double jeopardy. While deciding the said case, the court placed reliance upon its earlier judgment in R. Viswan & Ors. v. Union of India & Ors., AIR 1983 SC 658.

20. In Union of India & Anr. v. P.D. Yadav, (2002) 1 SCC 405, this Court dealt with the issue of double jeopardy in a case where the pension of the official, who stood convicted by a Court-Martial, had been forfeited. The Court held:

“This principle is embodied in the well-known maxim nemo debet bis vexari si constat curiae quod sit pro una et eadem causa, meaning no one ought to be vexed twice if it appears to the court that it is for one and the same cause. Doctrine of double jeopardy is a protection against prosecution twice for the same offence. Under Articles 20-22 of the Indian Constitution, provisions are made relating to personal liberty of citizens and others….. Offences such as criminal breach of trust, misappropriation, cheating, defamation etc., may give rise to prosecution on criminal side and also for action in civil court/ other forum for recovery of money by way of damages etc., unless there is a bar created by law. In the proceedings before General Court Martial, a person is tried for an offence of misconduct and whereas in passing order under Regulation 16 (a) for forfeiting pension, a person is not tried for the same offence of misconduct after the punishment is imposed for a proven misconduct by the General Court Martial resulting in cashiering, dismissing or removing from service. Only further action is taken under Regulation 16 (a) in relation to forfeiture of pension. Thus, punishing a person under Section 71 of the Army Act and making order under Regulation 16 (a) are entirely different. Hence, there is no question of applying principle of double jeopardy to the present cases.” 

21. In State of Rajasthan v. Hat Singh & Ors. AIR 2003 SC 791, this Court held that as the offence of glorification of Sati under Section 5 of the Rajasthan Sati (Prevention) Act, 1987, is different from the offence of violation of prohibitory order issued under Section 6 thereof, the doctrine of double jeopardy was not attracted for the reason that even if prohibitory order is promulgated, a subsequent criminal act even if falls under Section 5 could not be covered under Section 6(3) of the said Act. Doctrine of double jeopardy is enshrined in Section 300 Cr.P.C. and Section 26 of the General Clauses Act. Both the provisions employ the expression “same offence”. 

22. Similar view has been reiterated by this Court in State of Haryana v. Balwant Singh, AIR 2003 SC 1253, observing that there may be cases of misappropriation, cheating, defamation etc. which may give rise to prosecution on criminal side and also for action in civil court/other forum for recovery of money by way of damages etc. Therefore, it is not always necessary that in every such case the provision of Article 20(2) of the Constitution may be attracted.

23. In Hira Lal Hari Lal Bhagwati v. C.B.I., New Delhi, AIR 2003 SC 2545, this Court while considering the case for quashing the criminal prosecution for evading the customs duty, where the matter stood settled under the Kar Vivad Samadhan Scheme 1988, observed that once the tax matter was settled under the said Scheme, the offence stood compounded, and prosecution for evasion of duty, in such a circumstance, would amount to double jeopardy.

24. In view of the above, the law is well settled that in order to attract the provisions of Article 20(2) of the Constitution i.e. doctrine of autrefois acquit or Section 300 Cr.P.C. or Section 71 IPC or Section 26 of General Clauses Act, ingredients of the offences in the earlier case as well as in the latter case must be the same and not different. The test to ascertain whether the two offences are the same is not identity of the allegations but the identity of the ingredients of the offence. Motive for committing offence cannot be termed as ingredients of offences to determine the issue. The plea of autrefois acquit is not proved unless it is shown that the judgment of acquittal in the previous charge necessarily involves an acquittal of the latter charge.

25. In Radheshyam Kejriwal v. State of West Bengal & Anr., (2011) 3 SCC 581, while dealing with the proceedings under the provisions of Foreign Exchange Regulation Act, 1973, this Court quashed the proceedings (by a majority of 2: 1) under Section 56 of the said Act because adjudication under Section 51 stood finalised. The Court held :

“The ratio which can be culled out from these decisions can broadly be stated as follows:  

(i) Adjudication proceedings and criminal prosecution can be launched simultaneously; 

(ii) Decision in adjudication proceedings is not necessary before initiating criminal prosecution; 

(iii) Adjudication proceedings and criminal proceedings are independent in nature to each other; 

(iv) The finding against the person facing prosecution in the adjudication proceedings is not binding on the proceeding for criminal prosecution; 

(v) Adjudication proceedings by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of Article 20(2) of the Constitution or Section 300 of the Code of Criminal Procedure; 

(vi) The finding in the adjudication proceedings in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceedings is on technical ground and not on merit, prosecution may continue; and 

(vii) In case of exoneration, however, on merits where the allegation is found to be not sustainable at all and the person held innocent, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue, the underlying principle being the higher standard of proof in criminal cases.” 

The ratio of the aforesaid judgment is not applicable in this case for the reason that proceedings under Section 138 of N.I. Act are still sub judice as the appeal is pending and the matter has not attained finality.

26. Learned counsel for the appellant has further placed reliance on the judgment inG. Sagar Suri & Anr. v. State of U.P. & Ors., (2000) 2 SCC 636, wherein during the pendency of the proceedings under Section 138 N.I. Act, prosecution under Sections 406/420 IPC had been launched. This Court quashed the criminal proceedings under Sections 406/420 IPC, observing that it would amount to abuse of process of law. In fact, the issue as to whether the ingredients of both the offences were same, had neither been raised nor decided. Therefore, the ratio of that judgment does not have application on the facts of this case. Same remained the position so far as the judgment in Kolla Veera Raghav Rao v. Gorantla Venkateswara Rao & Anr., (2011) 2 SCC 703, is concerned. It has been held therein that once the conviction under Section 138 of N.I. Act has been recorded, the question of trying a same person under Section 420 IPC or any other provision of IPC or any other statute is not permissible being hit by Article 20(2) of the Constitution and Section 300(1) Cr.P.C.

27. Admittedly, the appellant had been tried earlier for the offences punishable under the provisions of Section 138 N.I. Act and the case is sub judice before the High Court. In the instant case, he is involved under Sections 406/420 read with Section 114 IPC. In the prosecution under Section 138 N.I. Act, the mens rea i.e. fraudulent or dishonest intention at the time of issuance of cheque is not required to be proved. However, in the case under IPC involved herein, the issue of mens rea may be relevant. The offence punishable under Section 420 IPC is a serious one as the sentence of 7 years can be imposed. In the case under N.I. Act, there is a legal presumption that the cheque had been issued for discharging the antecedent liability and that presumption can be rebutted only by the person who draws the cheque. Such a requirement is not there in the offences under IPC. In the case under N.I. Act, if a fine is imposed, it is to be adjusted to meet the legally enforceable liability. There cannot be such a requirement in the offences under IPC. The case under N.I. Act can only be initiated by filing a complaint. However, in a case under the IPC such a condition is not necessary.

28. There may be some overlapping of facts in both the cases but ingredients of offences are entirely different. Thus, the subsequent case is not barred by any of the aforesaid statutory provisions. The appeal is devoid of any merit and accordingly dismissed. 

Power of Attorney holder can also file cheque bounce cases: Apex court

Held: Filing of complaint petition under Section 138 of Negotiable Instruments Act through PoA holder is perfectly legal and competent.” The PoA holder, however, cannot file the cheque bounce case under his own name and such cases can be filed by the complainants through the PoA holders.“However, the PoA holder must have witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the transactions.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 73 OF 2007

A.C. Narayanan                                                                     …. Appellant(s)

Versus

State of Maharashtra & Anr                                             . …. Respondent(s)

WITH CRIMINAL APPEAL NO. OF 2013

(Arising out of S.L.P. (Crl.) No.2724 of 2008)

Shri G. Kamalakar                                                                 …. Appellant(s)

Versus

M/s. Surana Securities Ltd. & Anr                                   . …. Respondent(s)

J U D G M E N T : P.Sathasivam,CJI.

Criminal Appeal No. 73 of 2007

1)      This appeal is filed against the final common judgment and order dated 12.08.2005 passed by the High Court of Judicature at Bombay in Criminal Application Nos. 797, 798, 799, 801, 802 and 803 of 2002 whereby the High Court dismissed the applications filed by the appellant herein against the order of issuance of process against him for the offence punishable under Sections 138 and 142 of the Negotiable Instruments Act, 1881 (in short ‘the N.I. Act) by the IXth Additional Chief Metropolitan Magistrate at Bandra, Mumbai in Complaint Case Nos. 292/S/1998, 293/S/1998, 297/S/1998, 298/S/1998, 299/S/1998 and 300/S/1998.

 2)    Brief facts :

  (a).            The appellant is the Vice-Chairman and Managing Director of the Company by name M/s Harvest Financials Ltd. having its registered office at Bombay. Under a scheme of investment, the appellant collected various amounts from various persons in the form of loans and in consideration thereof issued post-dated cheques either in his personal capacity or as the signatory of the Company which got dishonoured.

  (b).             On 16.12.1997, Mrs. Doreen Shaikh, Respondent No.2 herein, the Power of Attorney Holder of six complainants, namely, Mr. Yunus A. Cementwalla, Smt. Fay Pinto, Mr. Mary Knoll Drego, Smt. Evelyn Drego, Mr. Shaikh Anwar Karim Bux and Smt. Gwen Piedade filed Complaint Case Nos. 292/S/1998, 293/S/1998, 297/S/1998, 298/S/1998, 299/S/1998 and 300/S/1998 respectively against the appellant herein under Sections 138 and 142 of the N.I. Act before the IXth Metropolitan Magistrate at Bandra, Mumbai. On 20.02.1998, Respondent No. 2 herein verified the complaint in each of these cases as Power of Attorney Holder of the complainants. Vide order dated 04.04.1998, the Additional Chief Metropolitan Magistrate, issued process against the appellant under Section 204 of the Code of Criminal Procedure, 1973 (in short ‘the Code’) for the offences punishable under Sections 138 and 142 of the N.I. Act. 

   (c).             Being aggrieved of the issuance of the process, on 13.01.2000, the appellant herein moved an application for discharge/recall of process in each of the complaints. Vide common order dated 29.11.2000, the Additional Chief Metropolitan Magistrate, IXth Court, Bandra, Mumbai dismissed the applications filed by the appellant herein.

  (d).             Being aggrieved of the said order, the appellant herein preferred applications being Criminal Application Nos. 797, 798, 799, 801, 802 and 803 of 2002 before the High Court for quashing of the complaints. By impugned order dated 12.08.2005, the said applications were dismissed by the High Court.

   (e).             Against the said order, the appellant has preferred this appeal by way of special leave before this Court.

 Criminal Appeal ………./2013 @ S.L.P.(Crl.) No. 2724 of  2008:

 3)     Leave granted.

4)     This appeal is directed against the judgment and order dated 19.09.2007 passed by the High Court of Judicature, Andhra Pradesh at Hyderabad in Criminal Appeal No. 578 of 2002 whereby the High Court allowed the appeal filed by M/s Surana Securities Ltd.-Respondent No.1 herein (the complainant) against the judgment and order dated 30.10.2001 passed by the Court of XVIII Metropolitan Magistrate, Hyderabad in C.C. No. 18 of 2000 dismissing the complaint and acquitting the accused for the offence under Section 138 of the N.I. Act.

5)     Brief facts

   (a).            Respondent No.1 herein-the complainant is a limited company carrying on the business of trading in shares. The appellant herein is a client of the respondent-Company and used to trade in shares. During the course of business, the appellant became liable to pay an amount of Rs. 7,21,174/- towards the respondent-Company. The appellant, in order to discharge the said liability, issued six cheques amounting to Rs.1,00,000/- each and another cheque for Rs.1,21,174/- drawn on Andhra Bank on different dates. When the first six cheques were presented for encashment on 18.09.1997, the same got dishonoured with an endorsement ‘funds insufficient’. Upon receiving the said information, the respondent-Company issued a legal notice to the appellant calling upon him to pay the amounts due but he did not pay the same.

   (b).             The Board of Directors of the respondent-Company, by a resolution, authorized its Managing Director to appoint an agent to represent the Company. Pursuant thereto, one Shri V. Shankar Prasad was appointed as an agent by executing a General Power of Attorney. Later, he was substituted by one Shri Ravinder Singh under another General Power of Attorney.

    (c).             Respondent-company filed a complaint under Section 138 of the N.I. Act being CC No. 1098 of 1997 in the Court of XIth Metropolitan Magistrate, Secunderabad. Subsequently, vide order dated 03.05.2000, the said complaint was transferred to the Court of XVIII Metropolitan Magistrate, Hyderabad and was registered as C.C. No. 18 of 2000. By order dated 30.10.2001, the Metropolitan Magistrate dismissed the complaint filed by the respondent- Company under Section 138 of the N.I. Act.

   (d).            Aggrieved by the said order, respondent-company filed an appeal being Criminal Appeal No. 578 of 2002 before the High Court of Judicature, Andhra Pradesh at Hyderabad. By impugned order dated 10.09.2007, learned single Judge of the High Court allowed the appeal and set aside the order dated 30.10.2001 passed by the XVIII Metropolitan Magistrate, Hyderabad and convicted the appellant herein under Section 138 of the N.I. Act.

   (e).            Being aggrieved by the order passed by the High Court, the appellant has filed this appeal by way of special leave.

     (f).            By order of this Court dated 07.04.2008, this appeal was tagged with the Criminal Appeal No. 73 of 2007 arising out of S.L.P. (Crl.) Nos. 6703-6708 of 2005. Hence, we heard both the appeals together.

 6)      Heard Ms. Indu Malhotra, learned senior counsel and Mr. Annam D.N. Rao, learned counsel for the appellants and Mr. Shankar Chillarge, Mr. Saurabh Kumar Tuteja, and Mr. Mayur R. Shah, learned counsel for the respondents.

 7)     On 04.01.2007, a Division Bench of this Court, on 04.01.2007, while considering Criminal Appeal No. 73 of 2007 (arising out of Special Leave Petition (Crl.) Nos. 6703-6708 of 2005) with regard to the interpretation of Section 142(a) of the N.I. Act observed that in view of the difference of opinion among various High Courts as also the decisions of this Court in M.M.T.C. Ltd. and Anr. vs. Medchl Chemicals and Pharma (P) Ltd. and Anr.,(2002) 1 SCC 234 and Janki Vashdeo Bhojwani and Anr. vs. Indusind Bank Ltd. and Ors., (2005) 2 SCC 217, the matter should be considered by a larger Bench in order to render an authoritative pronouncement. In view of the same, it is desirable to extract the entire order of reference which reads as under:-

 “Delay in filing counter affidavit is condoned.

 Leave granted.

 Interpretation and/or application of Section 142(a) of the Negotiable Instruments Act, 1881, (“NI Act”) is in question in this appeal which arises out of a judgment and order dated 12.8.2005 passed by a learned Single Judge of the High Court of Judicature at Bombay. 

 The basic fact of the matter is not in dispute.

 Several cheques on different dates were issued by the appellant herein which were dishonoured. The complainant executed a Special Power of Attorney on or about 28.11.1997, in favour of one Smt. Doreen Shaikh. She filed complaint petitions in the Court of Additional Chief Metropolitan Magistrate, Bandra, Mumbai. The complaint petitions were filed in the name of the respective payees of the cheques. She also filed affidavits in support of the averments made in the said complaint petitions. Cognizance of offence under Section 138 of the NI Act was taken against the appellant. Summons were issued. Questioning the order issuing summons by the learned Magistrate in exercise of his power under Section 204 of the Code of Criminal Procedure, appellant herein filed criminal application before the High Court of Judicature at Bombay, inter alia contending that the complaint petitions filed by the Power of Attorney Holder was not maintainable and relying thereupon or on the basis thereof the learned Magistrate could not have issued summons. The said contention has been negatived by the High Court in its impugned judgment.

 In the aforementioned premises interpretation of Section 142 (a) of the NI Act comes up for consideration before us. We may notice that in M.M.T.C. and Anr. vs. Medchl Chemicals & Pharma (P) Ltd. and Anr. [2002 (1) SCC 234], a Division Bench of this Court has opined:

“This Court has, as far back as, in the case of Vishwa Mitter v. O.P. Poddar (1983 4 SCC 701) held that it is clear that anyone can set the criminal law in motion by filing a complaint of facts constituting an offence before a Magistrate entitled to take cognizance. It has been held that no court can decline to take cognizance on the sole ground that the complainant was not competent to file the complaint. It has been held that if any special statute prescribes offences and makes any special provision for taking cognizance of such offences under the statute, then the complainant requesting the Magistrate to take cognizance of the offence must satisfy the eligibility criterion prescribed by the statute. 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.”

 However, in a later judgment in Janki Vashdeo Bhojwani and Anr. vs.Indusind Bank Ltd. and Ors. [2005 (2) SCC 217], albeit in a different context, another Division Bench of this Court overruled the judgment of the Bombay High Court in Pradeep Mohanbay vs. Minguel Carlos Dias [2000 (1) Bom. L.R. 908], inter alia opining as follows:

 ”Order 3 Rules 1 and 2 CPC empowers the holder of power of attorney to ‘act’ on behalf of the principal. In our view the word ‘acts’ employed in Order 3 Rules 1 and 2 CPC confines only to in respect of ‘acts’ done by the power-of-attorney holder in exercise of power granted by the instrument. The term ‘acts’ would not include deposing in place and instead of the principal. In other words, 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 depose for the principal in respect of the matter of which only the principal is entitled to be crossexamined.”

 ”On the question of power of attorney, the High Courts have divergent views. In the case of Shambhu Dutt Shastri v. State of Rajasthan (1986 2 WLN 713 (Raj.) it was held that a general power-or-attorney holder can appear, plead and act on behalf of the party but he cannot become a witness on behalf of the party. He can only appear in his own capacity. No one can delegate the power to appear in the witness box on behalf of himself. To appear in a witness box is altogether a different act. A general power-of-attorney holder cannot be allowed to appear as a witness on behalf of the plaintiff in the capacity of the plaintiff.”

 ”However, in the case of Humberto Luis v. Floriano Armado Luis (2002 2 Bom. CR 754) on which reliance has been placed by the Tribunal in the present case, the High Court took a dissenting view and held that the provisions contained in Order 3 Rule 2 CPC cannot be construed to disentitle the power-of-attorney holder to depose on behalf of his principal. The High Court further held that the word ‘act’ appearing in Order 3 Rule 2 CPC takes within its sweep ‘depose’. We are unable to agree with this view taken by the Bombay High Court in Floriano Armando.”

 It is not in dispute that there is a conflict of opinion on this issue amongst various High Courts, including the decision of Bombay High Court inMamatadevi Prafullakumar Bhansali vs. Pushpadevi Kailashkumar Agrawal & Anr. [2005 (2) Mah. L.J. 1003] on the one hand and a decision of the Andhra Pradesh High Court in S.P. Sampathy vs. Manju Gupta and Anr. (2002 Crl.L.J. 2621), on the other. One of  the questions which would arise for consideration is as to whether the eligibility criteria prescribed by Section 142(a) of the NI Act would stand satisfied if the complaint petition itself is filed in the name of the payee or the holder in due course of the cheque and/or whether a complaint petition has to be presented before the Court by the payee or the holder of the cheque himself.

 Another issue which would arise for consideration is as to whether the payee must examine himself in support of the complaint petition keeping in view the insertion of Section 145 of the said Act (Act No.55 of 2002).

 In our opinion, in view of difference of opinion amongst various High Courts as also the decisions of this Court in M.M.T.C. Ltd. (supra) and Janki Vashdeo Bhojwani (supra), particularly in view of the fact that in the later case the earlier one was not noticed, an authoritative pronouncement is necessary to be given in this regard. We, therefore, are of the opinion that the matter should be considered by a larger Bench.”

 Before going into the factual details, rival contentions and the legal issues, it is useful to refer Sections 138 and 142(a) of the N.I. Act which read as under:

“138. Dishonour of cheque for insufficiency, etc., of funds in the account.- Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both:

 Provided that nothing contained in this section shall apply unless-

  (a).        the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier;

 (b).        the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within thirty days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and

 (c).        the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice.

 Explanation.- For the purposes of this section, “debt or other liability” means a legally enforceable debt or other liability.”

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

  (a).        no court shall take cognizance of any offence punishable under section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;

Xxxx xxx xxx”

8)    In terms of Section 142 of the N.I. Act, no Court shall take cognizance of any offence punishable under Section 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque. Learned senior counsel appearing for the appellant pointed out that with a non obstante clause, Section 142 provides that only two categories of persons, namely, the payee or the holder in due course of the cheque is entitled to file a complaint under Section 138 of the N.I. Act. According to learned senior counsel for the appellant, in the first case, the verification statement of solemn affirmation has been made by the constituted attorney and not by the complainant. It is further pointed out that the verification affidavit made by the constituted attorney is not on the basis of her personal knowledge and hence, it would squarely fall within the ambit of hearsay evidence and cannot be read in evidence in a court of law. By pointing out the same, learned senior counsel for the appellant submitted that the constituted attorney is incompetent to depose on behalf of the complainants. In other words, according to the appellant, the Power of Attorney holder is not competent to depose about the transaction that took place between the payee and the drawer of the cheque. Learned senior counsel also pointed out that Section 2 of the Power of Attorney Act, 1882 cannot override the specific provisions of the Statute which require that a particular act should be done in a particular manner (vide Nazir Ahmed vs.King Emperor, AIR 1936 PC 253, Rao Bahasur Ravula Subba Rao & Ors. vs. Commissioner of Income Tax, AIR 1956 SC 604 at 612-613). It was further pointed by learned senior counsel for the appellant that the decision in Rao Bahasur Ravula Subba Rao (supra) was followed in Jimmy Jahangir Madan vs. Bolly Cariyappa Hindley (dead) by LRs, (2004) 12 SCC 509.

 9)      In view of the above, learned senior counsel for the appellant relied on a decision of this Court in Janki Vashdeo Bhojwani (supra) wherein this Court held that Power of Attorney cannot depose for the acts done by the principal. Likewise, it was further held that he cannot depose for principal in respect of matters of which only the principal can have personal knowledge and in respect of which the principal is liable to be cross-examined. It was further held that the Power of Attorney can appear only as a witness in respect of facts, which are within his personal knowledge.

 10)  In the case on hand, it is pointed out by learned senior counsel for the appellant that the constituted attorney did not even file the Power of Attorney along with the complaint or with the verifying statement and in view of the same, the Magistrate could not have issued process on the basis of such a complaint. No doubt, it is true that the Power of Attorney was produced along with the reply to the application for discharge filed by the complainant after two years of the order passed by the Additional Chief Metropolitan Magistrate issuing summons. In other words, the Power of Attorney holder is at best a witness to the execution of the Power of Attorney and not to the contents of the complaint.

 11)  Learned senior counsel for the appellant also pointed out that the provision under Section 200 of the Code is mandatory and obligatory on the part of the Magistrate to examine the complainant. However, a perusal of the Section makes it clear that examination of witnesses present, if any, is optional.

 12)  Learned senior counsel for the appellant further contended that the object of such examination is to ascertain whether there is a prima facie case against the accused of the commission of an offence as mentioned in the complaint and also to prevent the issuance of a process on a complaint which is either false or vexatious or intended to harass a person.  

 13)  Learned senior counsel for the appellant further contended, by drawing our attention to the language of Section 200 of the Code, that the Magistrate taking cognizance of an offence on complaint shall examine upon oath the complainant. She further pointed out that where the language of an Act is clear and explicit, it must be given effect to, whatever may be the consequences, as has been held by this Court in Vishwa Mitter of M/s Vijay Bharat Cigarette Stores, Dalhousie Road, Pathankot vs. O.P. Poddar and Ors., (1983) 4 SCC 701. In the said decision, this Court has held that if a special enactment provides for a specific procedure then that particular procedure has to be followed and hence, learned senior counsel for the appellant contended that the provisions of Section 142 of the N.I. Act regarding cognizance on the basis of a complaint filed by the payee or the holder in due course will prevail.

 14)  Learned counsel for the respondents met all the contentions which we will discuss hereunder.

 15)   In terms of the reference order, the following questions have to be decided by this Bench:

    (i).            Whether a Power of Attorney holder can sign and file a complaint petition on behalf of the complainant?/ Whether the eligibility criteria prescribed by Section 142(a) of NI Act would stand satisfied if the complaint petition itself is filed in the name of the payee or the holder in due course of the cheque?

 (ii).             Whether a Power of Attorney holder can be verified on oath under Section 200 of the Code?  

(iii).            Whether specific averments as to the knowledge of the Power of Attorney holder in the impugned transaction must be explicitly asserted in the complaint?

(iv).            If the Power of Attorney holder fails to assert explicitly his knowledge in the complaint then can the Power of Attorney holder verify the complaint on oath on such presumption of knowledge?

  (v).             Whether the proceedings contemplated under Section 200 of the Code can be dispensed with in the light of Section 145 of the N.I. Act which was introduced by an amendment in the year 2002?

 16) In order to find out the answers to the above and also to ascertain whether there is any conflict between the two decisions as pointed out in the referral order, let us consider the factual details and the ultimate dictum laid down in both the decisions.

 17)   In MMTC (supra), the appellant is a Government of India company. Respondent No. 1 therein is also a company and Respondent Nos. 2 and 3 were the Directors of the respondent- Company. The appellant-Company and the respondent-Company entered into a Memorandum of Understanding (MoU) dated 01.06.1994 and the same was slightly altered on 19.09.1994. Pursuant to the MoU, two cheques were issued by the respondent- Company in favour of the appellant-Company. When both the cheques were presented for payment, the same got returned with an endorsement “payment stopped by drawer”. Two notices were served by the appellant-Company on the respondent-Company. As the amounts under the cheques were not paid, the appellant- Company lodged two complaints through one Lakshman Goel, the Manager of the Regional Office (RO) of the appellant-Company. Respondents therein also filed two petitions for quashing of the complaints. By the impugned order, both the complaints were quashed. In the said case as well as in the cases filed subsequently, the respondents took identical contentions in their petitions in order to quash the complaints, viz., that the complaints filed by Mr Lakshman Goel were not maintainable and that the cheques were not given for any debt or liability. In the impugned judgment, it was held that the complaints filed by Mr Lakshman Goel were not maintainable. The High Court held that it is only an Executive Director of the Company who has the authority to institute legal proceedings. While holding that the reasoning given by the High Court cannot be sustained, this Court held that Section 142 of the N.I. Act provides that a complaint under Section 138 can be made by the payee or the holder in due course of the said cheque. This Court further held that the complaints in question were by the appellant-company who is the payee of the two cheques. After finding that the Court cannot quash a complaint as stated by the High Court, this Court set aside the same and directed the trial Court to proceed with the complaints against Respondent Nos. 1 and 3 therein in accordance with law.

18)  Now, let us consider the later decision of this Court in Janki Vashdeo Bhojwani (supra). This case relates to powers of Power of Attorney under the Code of Civil Procedure, 1908 and it was concluded that a complaint by a power of attorney holder on behalf of original plaintiff is maintainable provided he has personal knowledge of the transaction in question. This Court further held as under:

 “12. In the context of the directions given by this Court, shifting the burden of proving on to the appellants that they have a share in the property, it was obligatory on the appellants to have entered the box and discharged the burden by themselves. The question whether the appellants have any independent source of income and have contributed towards the purchase of the property from their own independent income can be only answered by the appellants themselves and not by a mere holder of power of attorney from them. The power-of-attorney holder does not have personal knowledge of the matter of the appellants and therefore he can neither depose on his personal knowledge nor can he be cross-examined on those facts which are to the personal knowledge of the principal.

 13. Order 3 Rules 1 and 2 CPC empower the holder of power of attorney to “act” on behalf of the principal. In our view the word “acts” employed in Order 3 Rules 1 and 2 CPC confines only to in respect of “acts” done by the power-of-attorney holder in exercise of power granted by the instrument. The term “acts” would not include deposing in place and instead of the principal. In other words, 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 depose for the principal in respect of the matter of which only the principal can have a personal knowledge and in respect of which the principal is entitled to becross-examined.”

 This Court further held thus:

 “17. On the question of power of attorney, the High Courts have divergent views. In the case of Shambhu Dutt Shastri v. State of Rajasthan it was held that a general power-of-attorney holder can appear, plead and act on behalf of the party but he cannot become a witness on behalf of the party. He can only appear in his own capacity. No one can delegate the power to appear in the witness box on behalf of himself To appear in a witness box is altogether a different act. A general power-of-attorney holder cannot be allowed to appear as a witness on behalf of the plaintiff in the capacity of the plaintiff.

 18. The aforesaid judgment was quoted with approval in the case of Ram Prasad v. Hari Narain. It was held that the word “acts” used in Rule 2 of Order 3 CPC does not include the act of power-of-attorney holder to appear as a witness on behalf of a party. Power-of-attorney holder of a party can appear only as a witness in his personal capacity and whatever knowledge he has about the case he can state on oath but he cannot appear as a witness on behalf of the party in the capacity of that party. If the plaintiff is unable to appear in the court, a commission for recording his evidence may be issued under the relevant provisions of CPC.

 19. In the case of Pradeep Mohanbay (Dr.) v. Minguel Carlos Dias the Goa Bench of the Bombay High Court held that a power of attorney can file a complaint under Section 138 but cannot depose on behalf of the complainant. He can only appear as a witness.

 20. However, in the case of Humberto Luis v. Floriano Armando Luis on which reliance has been placed by the Tribunal in the present case, the High Court took a dissenting view and held that the provisions contained in Order 3 Rule 2 CPC cannot be

construed to disentitle the power-of-attorney holder to depose on behalf of his principal. The High Court further held that the word “act” appearing in Order 3 Rule 2 CPC takes within its sweep “depose”. We are unable to agree with this view taken by the Bombay High Court in Floriano Armando.

 21. We hold that the view taken by the Rajasthan High Court in the case of Shambhu Dutt Shastri followed and reiterated in the case of Ram Prasad is the correct view. The view taken in the case of Floriano Armando Luis cannot be said to have laid down a correct law and is accordingly overruled.”

 19)      As noticed herein above, though Janki Vashdeo Bhojwani (supra), relates to powers of Power of Attorney holder under CPC but it was concluded therein that a plaint by a Power of Attorney holder on behalf of the original plaintiff is maintainable provided he has personal knowledge of the transaction in question. In a way, it is an exception to a well settled position that criminal law can be put in motion by anyone [vide Vishwa Mitter (supra)] and under the Statute, one stranger to transaction in question, namely, legal heir etc., can also carry forward the pending criminal complaint or initiate the criminal action if the original complainant dies [Vide Ashwin Nanubhai Vyas vs. State of Maharashtra (1967) 1 SCR 807]. Keeping in mind various situations like inability as a result of sickness, old age or death or staying abroad of the payee or holder in due course to appear and depose before the Court in order to prove the complaint, it is permissible for the Power of Attorney holder or for the legal representative(s) to file a complaint and/or continue with the pending criminal complaint for and on behalf of payee or holder in due course. However, it is expected that such power of attorney holder or legal representative(s) should have knowledge about the transaction in question so as to able to bring on record the truth of the grievance/offence, otherwise, no criminal justice could be achieved in case payee or holder in due course, is unable to sign, appear or depose as complainant due to above quoted reasons. Keeping these aspects in mind, in MMTC (supra), this Court had taken the view that if complaint is filed for and on behalf of payee or holder in due course, that is good enough compliance with Section 142 of N.I. Act.

 20)      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.

 21)      The power of attorney holder is the agent of the grantor. When the grantor authorizes the attorney holder to initiate legal proceedings and the attorney holder accordingly initiates such legal proceedings, he does so as the agent of the grantor and the initiation is by the grantor represented by his attorney holder and not by the attorney holder in his personal capacity. Therefore, where the payee is a proprietary concern, the complaint can be filed by the proprietor of the proprietary concern, describing himself as the sole proprietor of the payee, the proprietary concern, describing itself as a sole proprietary concern, represented by its sole proprietor, and the proprietor or the proprietary concern represented by the attorney holder under a power of attorney executed by the sole proprietor. However, we make it clear that the power of attorney holder cannot file a complaint in his own name as if he was the complainant. In other words, he can initiate criminal proceedings on behalf of the principal.

 22)      From a conjoint reading of Sections 138, 142 and 145 of the N.I. 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 N.I. 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 N.I. Act. It is only if and where the Magistrate, after considering the complaint under Section 138 of the N.I. 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 N.I. Act.

 23)      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 N.I. 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.

 24)      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.

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

 26)     While holding that there is no serious conflict between the decisions inMMTC (supra) and Janki Vashdeo Bhojwani (supra), we clarify the position and answer the questions in the following manner:

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

 (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.

(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.

(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.

  (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.

27)    We answer the reference on the above terms and remit the matter to the appropriate Bench for deciding the case on merits.

………….………………………CJI.

(P. SATHASIVAM)

………….…………………………J.

(RANJANA PRAKASH DESAI)

………….…………………………J.

(RANJAN GOGOI)

NEW DELHI;

SEPTEMBER 13, 2013.