[138 NI Act ] Complainant Must State That Power Of Attorney Holder Has Knowledge Of Impugned Transaction - Kerala High Court

A complaint submitted under Section 138 of the Negotiable Instruments Act through the holder of a power of attorney is entirely valid and competent, the Kerala High Court observed on Friday. To substantiate the contents of a complaint, the power of attorney holder must, however, either have observed the transaction as the payee/representative holder's in good faith or have sufficient knowledge of the stated transactions in order to testify and verify under oath before the court.

Justice A. Badharudeen added that the complainant must make precise claims in the complaint regarding their knowledge of the power of attorney in the aforementioned transaction.

It is accurate to say that the complaint submitted under Section 138 of the Negotiable Instruments Act through a power of attorney holder is entirely legal and competent, according to the ruling in A.C. Narayanan's first case (A.C. Narayanan v. State of Maharashtra &anr). However, the power of attorney holder could testify and confirm under oath before the court in order to prove the contents of the complaint only if the power of attorney holder had witnessed the transaction as the payee/agent holder's in good faith or otherwise had sufficient knowledge of the said transactions. The complainant was also required to make a specific assertion regarding the knowledge of the power of attorney holder in the said transaction explicitly in the complaint. The power of attorney cannot testify and verify under oath if the aforementioned requirements are not met.

The power of attorney cannot testify and provide evidence under oath before the court if the aforementioned criteria are not met.

The complaint and petition were both dismissed in an order issued under Section 482 of the Criminal Procedure Code. The petitioner argued that while it was alleged in the complaint's address section that the complainant was represented by the holder of his power of attorney, there was no reference to this fact in the complaint's body. Additionally, the person with the power of attorney had to confirm the complaint as though he were the complainant.

The petitioner's attorney claimed that the complaint was submitted in violation of the rules established by the Supreme Court in A.C. Narayanan v. State of Maharashtra & Anr.

The attorney also stated that the Affidavit submitted with the complaint does not mention anything about the power of attorney holder having direct knowledge of the transaction and having witnessed it.

The attorney representing the second respondent asserted that the petitioner's claims were unfounded and urged that the Trial Court should have withheld some important documents. Additionally, it was claimed that the complaint had submitted a proof affidavit in accordance with Section 145 of the Negotiable Instruments Act because he intended to provide testimony regarding the event that resulted in the execution of the check.

The Court noted that even though the complaint submitted under Section 138 of the Negotiable Instruments Act by the power of attorney holder is entirely legal and competent, the power of attorney holder can testify and provide evidence under oath before the court only when the power of attorney holder must have actually participated in the transaction as an agent of the payee/holder in good faith or possess certain property.

The Court further noted that the Lower Court had taken cognizance of the matter and had filed the case with the intention of using the summary trial procedure. Section 264 of the Criminal Procedure Code (Cr.P.C.) deals with judgement in cases tried summarily, and it has been stipulated that in every case tried summarily in which the accused does not enter a plea of guilty, the Magistrate shall record the substance of the evidence and a judgement containing a succinct statement of the reasons for

In actuality, Section 264 does not allow for an accused person's release prior to trial. As a result, the Court continued, the petition was deemed to be flawed right away.

However, after reviewing the complaint's filing procedure, the court discovered that the Lower Court had taken the case into its purview based on the affidavit submitted by the person holding the power of attorney in accordance with Section 145 of the NI Act. The Court drew attention to the fact that the complaint makes no claims regarding the power of attorney's attendance at transactions as the payee's agent or his or her possession of necessary knowledge regarding the alleged transaction, nor does it make any explicit claims regarding the power of attorney's holder's knowledge of the alleged transaction.

The Court noted that in light of the foregoing, the cognizance taken by the Magistrate acting on the power of attorney holder's affidavit is determined to be unconstitutional and shall be set aside.

By returning the complaint to the pre-cognizance stage and granting the original complainant the right to make an affidavit pursuant to Section 145 of the N.I Act in his capacity, the Court effectively approved the Criminal Miscellaneous Case.

Razak Mether vs State of Kerala and Anr.