Moideenkunhi @ Moidu S/O Pakru v M/S I.C.D.S.Ltd., Kasaragod & State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE P.D.RAJAN** **FRIDAY, THE 2ND DAY OF DECEMBER 2016/11TH AGRAHAYANA, 1938** **CRL.REV.PET.NO. 1098 OF 2006 ( ) ---------------------------------** **AGAINST THE JUDGMENT IN CRA NO.45/2002 OF ADDITIONAL SESSIONS JUDGE (ADHOC-II), KASARAGODE DATED 20-01-2006** **AGAINST THE JUDGMENT IN CC NO.566/1998 OF CHIEF JUDICIAL MAGISTRATE, KASARAGOD DATED 23-03-2002** **-----------------------** ## **REVISION PETITIONER(S)/APPELLANT/ACCUSED::** **-----------------------------------------** **MOIDEENKUNHI @ MOIDU S/O.PAKRU, K.K. HOUSE, KANIYANKUNDU, BENDICHAL, P.O. THEKKIL, VIA. CHENGALA, KASARAGOD DISTRICT.** **BY ADV. SRI.T.K.VIPINDAS** **RESPONDENT(S)/COMPLAINANT & STATE::** **-----------------------------------** **1. M/S.I.C.D.S.LTD.,KASARAGOD RAGHUVEERA KAMATH, POWER OF ATTORNEY HOLDER OF COMPLAINANT.** **2. STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM.** **BY PUBLIC PROSECUTOR SRI.C.N.PRABHAKARAN** **THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 02-12-2016, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **NS** ## **P.D. RAJAN, J. --------------------------Crl. R.P. No.1098 of 2006 ---------------------------------Dated this the 2[nd] day of December, 2016** ## **O R D E R** This revision petition is preferred by the accused against the judgment in Criminal Appeal No.45 of 2002 of the Additional Sessions Judge, Adhoc-II, Kasaragod. He was the accused in C.C. No.566 of 1998 of the Chief Judicial Magistrate, Kasaragod which was filed under Sec.138 of the Negotiable Instruments Act (for short, the NI Act). The learned Magistrate convicted the accused and sentenced him to undergo simple imprisonment for six months. Against that, he preferred the above Criminal Appeal where the learned Sessions Judge dismissed the appeal. Being aggrieved by that, the accused preferred this revision petition. 2. The complainant is a company represented by its power of attorney holder. The complainant's case in the trial court is that under hire purchase scheme, the accused issued Ext.P2 cheque for Rs.2,72,291/-. When it was presented for encashment, it was dishonoured for the Crl. R.P. No.1098 of 2006 2 reason of funds insufficient. The complainant demanded the amount by giving a notice in writing, there was no repayment, hence the complaint. During trial, the power of attorney holder of the complainant was examined as PW1 and his documents were marked as Exts.P1 to P5. Incriminating circumstances brought out in evidence were denied by the accused while questioning him. He examined DW1 and DW2 and marked Exts. D1 to D4. 3. Learned counsel appearing for the revision petitioner contended that no pleadings in the complaint to prove the transaction between the revision petitioner and 1[st] respondent. The complaint was filed by one Prakashan, the power of attorney holder and the evidence was given by another power of attorney holder Sri.Raghuveer Kamath, who had no knowledge about the transaction. No documents were produced in the trial court to show that there was a hire purchase agreement between the revision petitioner and the 1[st] respondent. In the absence of sufficient pleading in the complaint, no offence will attract against the revision petitioner. 4. The functions of the power of attorney has Crl. R.P. No.1098 of 2006 3 been explained by the Apex Court in **A.C. Narayanan** v. **State of Maharashtra** [2013 (4) KLT 21 (SC), held the principle as follows: "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 in MMTC (supra) and Janki Vashdeo Bhojwani (supra), we clarify the position and ## Crl. R.P. No.1098 of 2006 4 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 Crl. R.P. No.1098 of 2006 5 attorney. Nevertheless, the general power of attorney itself can be cancelled and be given to another person. 5. The complainant's case in the trial court was that in connection with hire purchase agreement, revision petitioner entrusted Ext.P1 cheque to the company. During examination of PW1, the power of attorney holder, deposed that he had no knowledge about the date of executing the hire purchase agreement and when that amount was advanced to the revision petitioner. He had also not mentioned who executed the cheque and when exactly the transaction took place. In the complaint, it was contended that the cheque was issued in connection with a hire purchase agreement, but that agreement and other connected documents were not produced in the trial court. Ext.P1 is the certified copy of the power of attorney, Ext.P2 is the cheque, Ext.P3 is the discharge memo, Ext.P4 is the notice and Ext.P5 is the postal acknowledgment. Nothing has been stated in the complaint that the power of attorney holder Raghuveer Kamath has any direct knowledge with regard to the Crl. R.P. No.1098 of 2006 6 transaction. When power of attorney holder has no knowledge about the transaction the complainant has to prove the transaction through the witnesses who have direct knowledge about it. This is a serious lacuna in the evidence of the power of attorney holder which will affect the credibility of the complainant. 6. The Power of Attorney holder can depose before the Court in order to prove the contents of the complaint only when he saw the transaction or he has direct knowledge with the transaction. 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. In view of the decision in **A.C. Narayanan (Supra),** 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 if the power of attorney holder has no knowledge regarding the transactions he cannot be examined as a witness to prove the transaction in the Crl. R.P. No.1098 of 2006 7 case. 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. 7. However, if the execution of the cheque is admitted by the accused the position is different and the presumption under section 118(a) and 139 of the Act would arise that it is supported by consideration. The above presumptions are rebuttable and the accused can prove the non-existence of a consideration by raising a probable defence. If the accused denied the transaction and discharges initial onus of proof that the existence of consideration was improbable or doubtful or the same was illegal, then the onus would shift to the complainant who then obliged to prove it as a matter of fact and the failure to prove would disentitle him to get any relief on the basis of that negotiable instrument. Honourable Supreme Court in **Krishna Janardhan Bhat** v. **Dattatrayo G. Hegde** [(2008) 141 Comp Case 665 (SC)] held that Section 138 of the Act has three ingredients, viz:- (i) that there was a legally enforceable debt; (ii) that Crl. R.P. No.1098 of 2006 8 the cheque was drawn from the account of banker for discharge, in whole or in part, of any debt or other liability, which presupposes a legally enforceable debt, and (iii) that the cheque so issued had been returned due to insufficiency of funds. Therefore, the proposition that section 139 of the Act raises a presumption in regard to the second ingredient only. Existence of legally recoverable debt is not a mater of presumption. It merely raises presumption in favour of the holder of the cheque that the same has been issued for discharge of any debt or other liability. 7. From the oral evidence of the complainant and in the complaint filed in the trial court, nothing has been stated by PW1 to prove the basic fact of transaction. Moreover, the power of attorney, who had knowledge about the transaction was not examined in the trial court and the 2[nd] power of attorney holder had no direct knowledge with the above transaction. In common parlance with regard to burden of proof, when an amount is advanced in connection with a transaction it has to be proved by the complainant. There is a presumption that Crl. R.P. No.1098 of 2006 9 the holder of the cheque had received it in discharge of a debt or other liability. The existence of debt is not the subject matter of presumption under Sec.139 of the NI Act. Therefore, the drawee of the cheque has to prove the existence of debt or other liability and only upon such proof of the existence of debt, a presumption under Sec.139 of the Act can be drawn that the cheque was issued in discharge of a debt or other liability. In effect, the conclusion reached by the appellate court would also appear to be a perverse one. Therefore, the claim that the cheque was issued in discharge of a debt or other liability is not proved. In view of the above discussion, the conviction and sentence passed by the trial court under Sec.138 of the NI Act is set aside. The accused is acquitted and set at liberty. This Criminal Revision Petition is disposed of as above. Sd/- **P.D. RAJAN, JUDGE** NS/05/12/2016 /True Copy / P.A. To Judge