General Power Of Attorney Holder Can Sub-Delegate His Powers If There Is A Specific Clause Permitting Sub-Delegation : Supreme Court

The Supreme Court has held that a general power of attorney holder can sub-delegate his powers to another person if there is a specific clause authorising sub-delegation.

"The law is settled that though the general power of attorney holder cannot delegate his powers to another person but the same can be delegated when there is a specific clause permitting sub-delegation", the Court observed.

A bench comprising Justices V Ramasubramanian and Pankaj Mithal made this observation while deciding the issue whether a complaint filed by a company through its authorized representative was maintainable. There was a general power of attorney on behalf of the company in favour of one of its directors Kavindersingh Anand. 

The general power of attorney holder of the company, Kavindersingh Anand, authorized another person named Ripanjit Singh Kohli to file a complaint under Section 138 of the Negotiable Instruments Act on behalf of the company. The issue was whether the complaint filed through Kohli was maintainable, when the general power of attorney was issued in favour of Anand. The High Court held the complaint to be not maintainable and quashed it invoking powers under Section 482 CrPC.

The Supreme Court however disapproved of the High Court's approach. The Court noted that the general power of attorney had specifically authorized Anand to appoint counsels or special attorneys. On interpreting the clauses of the power of attorney, it was found that there was authorization to Anand to appoint not only lawyers but also special attorneys for related purposes. 

"The said power of attorney as discussed above do provide for the sub-delegation of the functions of the general power of attorney holder and thus the filing of the complaint on behalf of the appellant company through its authorised representative Ripanjit Singh Kohli is not at all illegal or bad in law", the Court held.

Power of attorney holder can give evidence about transactions of which he has direct knowledge

The second issue in the case was whether Anand was competent to depose on behalf of the company. Here, the Court noted that Anand was one of the directors and had filed an affidavit stating that he has direct knowledge about the transaction.

"As the power of attorney holder is said to be having due knowledge about the transactions, he has the capacity to depose and the trial court or the Revisional Court committed no error of law in rejecting the applications of the respondent", the Court noted.

Principles relating to power of attorney

The judgment authored by Justice Pankaj Mithal also referred to the principles laid down in A.C. Narayanan v. State of Maharashtra and Another  (2014) 11 SCC 790 :

(i)Filing of a complaint under Section 138 Negotiable Instruments Act, 1881 through power of attorney holder is perfectly legal provided he has due knowledge about the transaction (s) in question;

ii) Power of attorney holder can depose and verify on oath to prove the contents of the complaint if he has witnessed the transaction;

iii) The complaint filed through power of attorney holder must contain an assertion/ that he had the knowledge about transactions in question;

(iv) Functions under general power of attorney cannot be delegated to another person without a specific clause permitting the same in the general power of attorney.

v) The affidavits of complainant, his witnesses or his power of attorney holder are permissible and sufficient for taking cognizance on the complaint; and

vi) The complaint by power of attorney holder on behalf of the original complainant is maintainable though he cannot file a complaint in his own name.

Case Title : Mita India Pvt Ltd vs Mahendra Jain

Citation : 2023 LiveLaw (SC) 121

For Petitioner(s) Ms. Indra Sawhney, AOR; For Respondent(s) Mr. Nitin S. Tambwekar, Adv. Mr. Seshatalpa Sai Bandaru, AOR

Power of Attorney - The law is settled that though the general power of attorney holder cannot delegate his powers to another person but the same can be delegated when there is a specific clause permitting sub-delegation.

Power of Attorney - Power of Attorney holder can give evidence about facts of which he has knowledge - Followed A.C. Narayanan v. State of Maharashtra and Another (2014) 11 SCC 790 

Click here to read the judgment