S.138 NI Act | Production Of Original Power of Attorney Not Necessary At Time Of Taking Cognizance Of Complaint: J&K&L High Court

The Jammu and Kashmir and Ladakh High Court on Friday ruled that the production of original Power of Attorney is not necessary at the time of taking cognizance of the complaint under Section 138 of Negotiable Instruments Act.

The observations were made by Justice Sanjay Dhar while hearing a plea in which the petitioner had challenged a complaint filed by respondent bank against him for an offence under Section 138/142 of Negotiable Instruments Act which was pending before the Court of Chief Judicial Magistrate, Pulwama.

The plea challenged the order of Magistrate whereby process was issued against the petitioner as also the order passed by Additional Sessions Judge, Pulwama, whereby a revision petition against the order of the Magistrate was dismissed.

The petitioner's primary ground in the petition before high court was that the complaint has not been filed through a competent person as the original Power of Attorney in favour of Basharat Gul, through whom the complaint has been filed, has not been placed on record of the trial court.

The court was told that only a Xerox copy of the Power of Attorney has been produced before the trial court and the impugned complaint does not contain an averment that the Attorney Holder is conversant with the facts of the case, which, according to the petitioner, is a mandatory condition.

Justice Dhar said a perusal of the record reveals that the respondent Bank had filed the impugned complaint under Section 148 of the NI Act through Gul and in the complaint it was mentioned that he is its authorised Attorney Holder.

It was also averred in the complaint that Gul, being the Attorney Holder of respondent Bank, is competent to sign and verify the pleadings, file and prosecute the same and to do all acts, deeds in general for due prosecution of the complaint, noted the court.

Adjudicating upon the matter, Justice Dhar observed that in a case where the complainant is a company, an authorised employee can represent the said company and once an averment to this effect is made in the complaint, it is sufficient for the Magistrate to take cognizance and issue process.

Deliberating further on the subject, the bench observed that in case authority of a person filing complaint on behalf of the company is disputed by the accused, the same would be a matter of trial to be decided during the course of trial and it would not be a ground to dismiss the complaint at the threshold itself.

Referring to Delhi High Court's judgement in Taruna Batra vs. Shikha Batra and Madras High Court's decision in Mr. R. Shekar vs. Professional Circuit Boards Ltd. and another, the petitioner's counsel had argued that production of original Power of Attorney has to be insisted upon.

However, Justice Dhar relied upon the Supreme Court's recent judgement in M/S TRL Krosaki Refractories Ltd. vs. M/S SMS Asia Private Limited & anr, wherein SC observed:

"When the complainant/payee is a company, an authorised employee can represent the company. Such averment and prima facie material is sufficient for the learned Magistrate to take cognizance and issue process. If at all, there is any serious dispute with regard to the person prosecuting the complaint not being authorised or if it is to be demonstrated that the person who filed the complaint has no knowledge of the transaction and, as such that person could not have instituted and prosecuted the complaint, it would be open for the accused to dispute the position and establish the same during the course of the trial".

Observing that ratio laid down in the judgements of Supreme Court has not been taken note of either by Delhi High Court or by Madras High Court, Justice Dhar said:

"Thus, the ratio laid down in these judgments to the effect that production of original Power of Attorney is necessary at the time of taking cognizance of the complaint under Section 138 of NI Act, is not the correct position of law."

The court noted that complainant - the bank, has specifically pleaded that Gul is the duly constituted Attorney of the Bank who is authorised to institute the complaint and verify the pleadings.

"A copy of the Power of Attorney has been annexed to the complaint and therefore the Magistrate was justified in taking cognizance of the complaint and issuing process against the petitioner on the basis of the impugned complaint," Justice Dhar said.

Dealing with the contention of the petitioner that the statement of the Attorney of the complainant has not been recorded on oath, as is required under Section 200 of the Cr. P. C, the bench said the same is only an irregularity which would not vitiate the proceedings.

The court further said even if the statement of the Attorney Holder of the complainant were taken out of consideration, still then there is enough material on record of the trial court that would be sufficient for issuing process against the petitioner.

For the foregoing reasons the court found the petition devoid of any merit and accordingly dismissed the same.

Case Title : Ab Rasheed Bhat Vs HDFC Bank.