Section 138 NI Act: AUTHORITY OF SPA IN PROSECUTING COMPLAINT U/s 138 of Negotiable Instruments Act & EFFECT

In the light of M/s Naresh Potteries Vs M/s Aarti Industries & Anr Criminal Appeal of 2025 (Arising out of SLP (Crl) No. 8659 of 2023

                                        PART II

The parameter and the circumstances under that a complaint u/s 138 of Negotiable Instruments Act instituted through Special Power of Attorney (SPA) has already been discussed in Part I, however, in the light of recent Supreme Court judgment as shall be delineated below, it is imperative to further discuss the aspect, particularly revolving around the fact that inadequate SPA could also lead to quashing of complaint itself.   It is, thus, worthwhile to refer to a situation as to if Special Power of Attorney, through whom the complaint is instituted shall in itself be suffice or there shall have to be some pre-requisites in order to maintain a complaint by a Special Power of Attorney (SPA) and still, whether the criteria or pre-requisites of SPA shall be the same in the case of a SPA authorised by an individual or a firm or shall it be in any manner different in such cases. Moreover, in case, the complaint filed by the power of attorney is found to be inadequate in not containing some particulars in a complaint or affidavit, whether due to that reason, a complaint so filed could be quashed or not shall be the aspect of deliberation and inference shall be culled out in this context. As stated, the diverse parameter in orde3r to qualify a complaint or summoning order to be quashed has already been discussed in greater length before, therefore, the discussion herein shall revolve around the ambit as narrated. The significance of the discussion herein therefore cannot be overstated.

          M/s Naresh Potteries Vs M/s Aarti Industries & Anr

                        FACTUAL MATRIX

That said, a recent judgment of Supreme Court in this regard captioned as M/s Naresh Potteries Vs M/s Aarti Industries & Anr Criminal Appeal of 2025 (Arising out of SLP (Crl) No. 8659 of 2023 shall be of utmost significance.

Shorn of unnecessary details, the complaint u/s 138 of Negotiable Instruments act was filed by the complainant, a proprietor firm through its SPA, who was the Manager in the firm. The gravamen of the case was that the complainant firm had purchased polymer insulators scrap rejected material, worth Rs. 1,70,46,314/- from the complainant and after the materials were supplied to Respondent the complainant had raised several bills/invoices seeking payment for the supplied goods. Towards the supply, cheque was issued in favour of complainant, but the said cheque issued by the respondent firm, when deposited in its account by the complainant for its encashment, the cheque came to be dishonoured and returned to the complainant with a return memo which stated that the cheque amount ‘exceeds arrangement’.

Thus, the legal notice was issued to the Respondent No.1 through its sole proprietor, Sunita Devi under the NI Act. According to the legal notice, Respondent No.1 was to pay the cheque amount of Rs. 1,70,46,314/- within a period of 15 days of receiving the notice, failing which the offence punishable under Section 138 of the NI Act was liable to be attracted.

As a counterblast to the legal notice a First Information Report under 3 Sections 420, 467, 468 and 471 of the Indian Penal Code, 1860 against several accused alleging inter alia that the complainant and their staff and the branch manager of the Central Bank of India, had colluded together to obtain a cheque book in the name of M/s Aarti Industries by forging the signature of Sunita Devi. Subsequently, the complainant i.e sole proprietor had issued a Letter of Authority thereby authorizing Sh. Neeraj Kumar, the Manager and caretaker of the complainant firm to file a complaint and take all such necessary steps in the matter of the dishonour of the cheque. The complaint was accordingly filed u/s 138 of Negotiable Instruments Act. Being the deponent, in the aforesaid complaint, Sh. Neeraj Kumar also filed an affidavit solemnly affirming that he was well conversant with the facts and circumstances of the facts leading to the complaint and as such was competent to file the said affidavit.

Subsequently, Sh. Neeraj Kumar had filed an Affidavit of Evidence under Section 200 of the Code of Criminal Procedure, 1973, before the trial court and therein he reiterated the facts of the complaint case and once again, affirmed that he was well-conversant with the facts and circumstances of the case, being the Manager of the complainant firm. The evidence affidavit was tendered under Section 200 of the Cr.P.C and the documentary evidence adduced. As the trial court found that there was sufficient ground to issue summons to accused to the sole owner/proprietor of Respondent No.1 firm, for the offence punishable under Section 138 of the Negotiable Instruments Act, accordingly, an order was passed, thereby summoning the accused to face trial for the aforesaid offence.

In the face of above, the aggrieved respondent had preferred a petition under Section 482 of the Cr.P.C seeking thereby quashing of the aforesaid summoning order as well as the entire proceedings of the complaint case pending before the trial court. The High Court was pleased to quash the complaint and allowed the petition field by the respondent no.1 u/s 482 of Cr.PC.

The complainant had approached the Supreme Court by way of a Special leave Petition by impugning the order passed by the High Court, whereby, the complaint was quashed by the High Court.

                          Pleas opf appEllAnt /Complainant

(i) The impugned order passed by the high court was based on an incorrect assumption of fact as well as an incorrect interpretation of the law laid down by the Supreme Court in TRL Krosaki Refractories Limited v. SMS Asia Private Limited and Another (2022)7 SCC 612 .

(ii) The impugned order was bad in law, since, the complaint was quashed merely on the premise that from a conjoint reading of the averments made in the Letter of Authority and the affidavit of evidence under Section 200 of the Cr.P.C, Sh. Neeraj Kumar, the power of attorney holder was found to have no personal knowledge of the facts and circumstances of the case.

(iii) The very reason of a sworn statement under Section 200 of the Cr.P.C. by the power of attorney holder is to ascertain that he has knowledge of the facts stated in the complaint and also to satisfy the court of the prima facie existence of an offence which is to be tried and the final outcome of the trial would be determined on the basis of the evidence. if necessary, the complainant could be called at a later stage for further examination and cross-examination. It is also a matter of record that the Power of Attorney holder in the present matter had on three separate occasions clearly stated that he had personal knowledge of the facts of the complaint case. Reliance was placed on the following judgments of Supreme Court:

(a) Shankar Finance and Investments v. State of Andhra Pradesh and Ors (2008) 8 SCC 536.

(b) Praveen v. Mohd. Tajuddin (2009) 12 SCC 706

(c) A.C. Narayanan v. State of Maharashtra and Another, (2014) 11 SCC 790, and

(d) Vinita S. Rao v. Essen Corporate Services Private Limited and Another (2015) 1 SCC 527.

(iv) Placing reliance on above, it was contended that the aforesaid precedents are clearly applicable in support of the complainant/appellant and appeal of the complainant deserved to be allowed and the order passed by the high court was required to be set aside.

The Supreme Court had therefore to adjudicate on a solitary question as to whether the complaint filed by the appellant(complainant) under Section 138 of the NI Act Was in accordance with the requirement under Section 142 of the Negotiable Instruments Act.

          SECTION 142 of NEGOTIABLE INSTRUMENTS ACT

The relevant provision of the NI Act that falls for our consideration is as follows:

“142. Cognizance of offences.—

(1) 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; …………….”

Ordinarily, a Magistrate is empowered under Section 190 of the Cr.P.C., to take cognizance of an offence upon receiving a complaint of facts which constitute such offence. However, prior to taking such cognizance, in accordance with and as provided by Section 200 of the Cr.P.C., the Magistrate is required to examine upon oath the complainant and witness present, if any. However, Section 142 of the Negotiable Instruments Act creates a legal bar on the court from taking cognizance of any offence punishable under Section 138 of the Negotiable Instruments Act, except upon a complaint, in writing, made by the payee, or as the case may be, the holder in due course of the cheque.

                             LEGAL PRECEDENTS

It need no reiteration that the Supreme Court in the case reported as National Small Industries Corporation Limited v. State (NCT of Delhi) and Others (2009) 1 SCC 407 had an occasion to consider the validity of a complaint under Section 138 of the NI Act and the satisfaction of the requirement under Section 142 thereof, as well as to determine as to who could be considered to be the complainant/representative in a case where the complaint is to be filed by an incorporated body.

It was held as under:

“14. The term “complainant” is not defined under the Code. Section 142 of the NI Act requires a complaint under Section 138 of that Act to be made by the payee (or by the holder in due course). It is thus evident that in a complaint relating to dishonour of a cheque (which has not been endorsed by the payee in favour of anyone), it is the payee alone who can be the complainant. The Negotiable Instruments Act only provides that dishonour of a cheque would be an offence and the manner of taking cognizance of offences punishable under Section 138 of the said Act. However, the procedure relating to initiation of proceedings, trial and disposal of such complaints, is governed by the Code of Criminal Procedure (Now BNSS).  Section 200 of the Code requires that the Magistrate, on taking cognizance of an offence on complaint, shall examine upon oath the complainant and the witnesses present and the substance of such examination shall be reduced to writing and shall be signed by the complainant and the witnesses. The requirement of Section 142 of the NI Act that the payee should be the complainant, is met if the complaint is in the name of the payee. If the payee is a company, necessarily the complaint should be filed in the name of the company. Section 142 of the Negotiable Instruments Act does not specify who should represent the company, if a company is the complainant. A company can be represented by an employee or even by a non-employee authorised and empowered to represent the company either by a resolution or by a power of attorney. ….. “

“19. Resultantly, when in a complaint in regard to dishonour of a cheque issued in favour of a company or corporation, for the purpose of Section 142 of the NI Act, the company will be the complainant, and for purposes of Section 200 of the Code, its employee who represents the company or corporation, will be the de facto complainant. In such a complaint, the de jure complainant, namely, the company or corporation will remain the same but the de facto complainant (employee) representing such de jure complainant can change, from time to time. And if the de facto complainant is a public servant, the benefit of exemption under clause (a) of the proviso to Section 200 of the Code will be available, even though the complaint is made in the name of a company or corporation.”

The Supreme Court had thus clarified that the requirement of Section 142 of the Negotiable Instruments Act, the payee should be the complainant if the complaint is in the name of the payee. Where the payee is a company, the complaint should necessarily be filed in the name of the company, if the company is the complainant. In such cases, a company can be represented by an employee or even a non-employee authorised and empowered to represent the company either by a resolution or by a power of attorney. The Supreme Court had thus concluded that for the purposes of Section 142 of the Negotiable Instruments act, the company will be the complainant and for the purposes of Section 200 of the Cr.P.C., its employee who represents the company, will be the de facto complainant while the company will remain the de jure complainant, regardless of any change in the de facto complainant.

                Observation of Supreme Court

The Supreme Court has further observed as under:

“17. Having discussed as to who could file a complaint on behalf of an incorporated body, it would be apposite to consider the legal validity of a complaint by the power of attorney holder of such an incorporated body. A three-Judge Bench of this Court in the case of A.C. Narayanan (supra) was called upon to answer a reference with regard to the conflicting decisions delivered by two Division Benches of this Court in M.M.T.C. Ltd. and Another v. Medchl Chemicals & Pharma P. Limited and Another (2002) 1 SCC 334 and Janki Vashdeo Bhojwani and Another v. IndusInd Bank Limited and Others (2005) 2 SCC 217. While answering the reference, what fell for consideration before this Court was the maintainability of a complaint under Section 138 of the NI Act filed by the power of attorney holder on behalf of the original complainant and the necessity of specific averments as to the knowledge of the power of attorney holder with respect to the facts and circumstances leading to the dishonour of the cheque(s) and the preference of the criminal proceedings. This Court held as follows:

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

·         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 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?

·         Whether a power-of-attorney holder can be verified on oath under Section 200 of the Code?

·         Whether specific averments as to the knowledge of the power-of-attorney holder in the impugned transaction must be explicitly asserted in the complaint?

·         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?

·         Whether the proceedings contemplated under Section 200 of the Code can be dispensed with in the light of Section 145 of the NI Act which was introduced by an amendment in the year 2002?

It was further held that:

28. The power-of-attorney holder is the agent of the grantor. When the grantor authorises 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.

29. From a conjoint reading of Sections 138, 142 and 145 of the NI 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 NI 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 NI Act. It is only if and where the Magistrate, after considering the complaint under Section 138 of the NI 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 NI Act.”

 

Thus, according to the Supreme Court, there is no serious conflict between the decisions in M.M.T.C. [M.M.T.C. Ltd. v. Medchl Chemicals and Pharma (P) Ltd., (2002) 1 SCC 234 : 2002 SCC (Cri) 121] and Janki Vashdeo Bhojwani [Janki Vashdeo Bhojwani v. IndusInd Bank Ltd., (2005) 2 SCC 217]. The questions were thus answered as under:

·         Filing of complaint petition under Section 138 of the NI Act through power of attorney is perfectly legal and competent.

·         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 15 witnessed the transaction as an agent of the payee/holder in due course or possess due knowledge regarding the said transactions.

·         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.

·         In the light of Section 145 of the NI 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 NI 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 NI Act.

·        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.

The matter was thus remanded back.

   

                    TAKEAWAYS

(1)     It is no more res integra that when in a complaint in regard to dishonour of a cheque issued in favour of a company or corporation, for the purpose of Section 142 of the Negotiable Instruments Act, the company will be the complainant, and for purposes of Section 200 of the Code, its employee who represents the company or corporation, will be the de facto complainant. In such a complaint, the de jure complainant, namely, the company or corporation will remain the same but the de facto complainant i.e employee, representing such de jure complainant can change, from time to time. And if the de facto complainant is a public servant, the benefit of exemption under clause (a) of the proviso to Section 200 of the Code will be available, even though the complaint is made in the name of a company or corporation.”

(2)     The requirement of Section 142 of the Negotiable Instruments Act is that the payee should be the complainant and where the payee is a company, the complaint should necessarily be filed in the name of the company. The company in such cases can be represented by an employee or even a non-employee authorised and empowered to represent the company either by a resolution or by a power of attorney. Thus, for the purposes of Section 142 of the Negotiable Instruments Act, the company will be the complainant, however, for the purposes of Section 200 of the Cr.P.C., its employee who represents the company, will be the de facto complainant, while the company will remain the de jure complainant, regardless of any change in the de facto complainant.

(3)  What is essential, though in a complaint under Section 138 of the Negotiable Instruments Act filed by the power of attorney holder on behalf of the original complainant that the necessity of specific averments as to the knowledge of the power of attorney holder with respect to the facts and circumstances leading to the dishonour of the cheque(s) and the preference of the criminal proceedings are evident.

(4)     The power-of-attorney holder is the agent of the grantor. When the grantor authorises 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.

(5)     From a conjoint reading of Sections 138, 142 and 145 of the NI 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.

(6)     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, 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, such 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.

(7)     For the purpose of issuing process under Section 200 of the Cr.PC, 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 Negotiable Instruments Act. It is only if and where the Magistrate, after considering the complaint under Section 138 of the Negotiable Instruments 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 NI Act.

 (8) 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.

(9)     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.

(10) 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 Negotiable Instruments Act.

(11)   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.

(12)   Where the power-of attorney holder of the complainant is in charge of the business of the complainant payee and the power of attorney holder alone is personally aware of the transactions, there is no reason why he cannot depose as a witness, however, such personal knowledge must be explicitly asserted in the complaint and a power-of-attorney holder, who has no personal knowledge of the transactions cannot be examined as a witness in the case.

In the case of TRL Krosaki Refractories Limited (supra), a complaint came to be filed by the payee company through its General Manager (Accounting) under Sections 138 and 142 of the Negotiable Instruments Act. The complaint was registered based on the affidavit filed on behalf of the complainant, in lieu of an oral sworn statement. Upon being satisfied that there was sufficient material and the complaint under Section 138 of the Negotiable Instruments Act against the accused was in accordance with law, the SDJM took cognizance of the complaint and issued summons to the accused-firm therein. The High Court u/s 482 of Cr.PC, however, had set aside the summoning order on a premise that the complaint had been filed by an incompetent person, in as much as, the complainant neither had knowledge about the alleged transaction, nor had he witnessed the same, nor was there any averment in the complaint that the complainant had been duly authorized by the payee-firm to initiate criminal proceedings on its behalf. The matter was travelled to a three judge bench of Supreme Court and the appeal was allowed and order of the high court was set aside after a thorough consideration of the judgments of Supreme Court by which the law on the subject-matter at hand has been crystallised. In para 21 of TRL Krosaki Refractories Limited (supra) it was held:

 

“21. A meaningful reading of the above would indicate that the company having authorised the General Manager (Accounting) and the General Manager (Accounting) having personal knowledge had in fact been clearly averred. What can be treated as an explicit averment, cannot be put in a straitjacket but will have to be gathered from the circumstance and the manner in which it has been averred and conveyed, based on the facts of each case. The manner in which a complaint is drafted may vary from case to case and would also depend on the skills of the person drafting the same which by itself, cannot defeat a substantive right. However, what is necessary to be taken note of is as to whether the contents as available in the pleading would convey the meaning to the 19 effect that the person who has filed the complaint, is stated to be authorised and claims to have knowledge of the same. In addition, the supporting documents which were available on the record by themselves demonstrate the fact that an authorised person, being a witness to the transaction and having knowledge of the case had instituted the complaint on behalf of the “payee” company and therefore, the requirement of Section 142 of the NI Act was satisfied. In Vinita S. Rao v. Essen Corporate Services (P) Ltd. [Vinita S. Rao v. Essen Corporate Services (P) Ltd., (2015) 1 SCC 527  to which one of us (the Hon'ble CJI) was a member of the Bench has accepted the pleading of such a nature to indicate the power to prosecute the complaint and knowledge of the transaction as sufficient to maintain the complaint”.

It has also emerged that though, the case in A.C. Narayanan (Supra) the facts involved therein were in the background of the complainant being an individual and the complaint filed was based on the power of attorney issued by the “payee” who was also an individual. In such an event, the manner in which the power was being exercised was to be explicitly stated so as to establish the right of the person prosecuting the complaint, to represent the payee i.e. the complainant. The position that would emerge when the complainant is a company or a corporate entity will have to be viewed from a different standpoint.

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.

In M/s Naresh Potteries (Supra) it is thus held:

“26. A perusal of the complaint would reveal that Complaint has been filed in the name of M/s Naresh Potteries through Neeraj Kumar (Manager and Authority-letter holder). Further, a perusal of the cheque which is the subject-matter of the complaint would reveal that it has been issued in the name of Naresh Potteries. As aforementioned, Section 142 of the NI Act contemplates that the complaint filed under Section 138 of the NI Act should be in writing and should be filed by the payee or the holder of the cheque. Therefore, it is abundantly clear that the complaint in the present matter satisfies the requirements of Section 142 of the NI Act. 27. Further, a cumulative study of the relevant material being the Letter of Authority, the affidavit in support of the complaint and the affidavit of evidence under Section 200 of the Cr.P.C. would reveal that Sh. Neeraj Kumar, the power of attorney holder being the manager of the appellant-firm and the caretaker of its day-to-day business, was well-conversant with the transactions which led to the issuance of the cheque to the appellant-firm and which eventually led to the initiation of the criminal proceedings against Respondent No.1”.

It was further held in the above case that, Since, the High Court had quashed the summoning order on a categorical finding that the power of attorney holder did not have personal knowledge of the facts giving rise to the criminal proceedings as there was no specific pleading to that effect, in the letter of authority and the affidavit of the power of attorney holder under Section 200 of the Cr.P.C., however, the Supreme Court had noted that the relevant portions of the complaints and documents contained averments regarding authorisation in favour of and knowledge on the part of Sh. Neeraj Kumar and  The Letter of Authority issued by the sole proprietor of the appellant-firm reads as under:

“Certified that I,……..Aged about…. w/o ………of  M/s. Naresh Potteries, in the capacity of sole proprietor of the above firm, authorize Sh. NEERAJ KUMAR s/o ……..aged 42 years r/o ……………. who is manager of the above firm and takes care of general and day-to-day managerial business of the firm and is very well conversant with everyday affairs, financial transactions and sale purchase of the firm, to file a complaint in the matter of dishonouring of cheque No……/dated……… against M/s. Arti Industries, in a competent Hon'ble Court on behalf of M/s, Naresh Potteries. Sh, Neeraj is well aware of this case and is given necessary instructions also.”

Even while verifying affidavit filed on behalf of Sh. Neeraj Kumar in support of his complaint reads as under:

“ Deponent is applicant in this case who is posted as manager in complainant firm M/s. Naresh Potteries, and holds authority letter of the firm issued by the owner/proprietor Smt. ……………… and is well conversant with the facts and circumstances of the case. Thus, deponent is competent to file this affidavit.”

Further, the affidavit of evidence under Section 200 of the Cr.P.C. filed by Sh. Neeraj Kumar in lieu of the oral sworn statement before the trial court on the basis of which the trial court took cognizance of the complaint, reads thus:

“ Deponent is applicant in this case who is posted as manager in complainant firm M/s. Naresh Potteries, GT Road, Khurja and holds authority letter of the firm issued by the owner Smt. Shakti Khanna and is well conversant with the facts and circumstance of the case. Thus, deponent is competent to file this affidavit.”

It was therefore held by the Supreme Court that conjoint reading of the above would make it clear that it had been categorically averred that the sole proprietor of the appellant-firm had duly authorized Sh. Neeraj Kumar to act on its behalf in view of the fact that Sh. Neeraj Kumar was in charge of the day-to-day affairs of the appellant-firm and as such had personal knowledge of the facts of the matter.

In para no. 33 of Naresh Potteries (Supra) thus, it is held :

 

“33. As referred to above, this Court in TRL Krosaki Refractories Limited (supra) had come to a categorical finding that what can be treated as an explicit averment, cannot be put in a straightjacket but will have to be gathered from the circumstance and manner in which it has been averred and conveyed, based on the facts of each case. The relevant portion of the said decision has already been extracted above. In the instant matter, the averments made in the documents referred to above, make it wholly clear that Sh. Neeraj Kumar possessed personal knowledge of the facts of the matter at hand and was well-equipped and duly authorised to initiate criminal proceedings against Respondent No.1. That beside the fact that it would always be open for the trial court to call upon the complainant for examination and cross examination, if and when necessary, during the course of the trial. As such, a peremptory quashing of the complaint case by the High Court is completely unwarranted and that too on an incorrect factual basis”.

 

34. Apart from that, this Court has repeatedly cautioned that the inherent powers under Section 482 of the Cr.P.C. should be exercised sparingly and with great caution and further that inherent powers should not be used to interfere with the jurisdiction of the lower courts or to scuttle a fair investigation or prosecution. In light of the well-settled law on the subject, we do not find that the instant matter called for any interference by the High Court in exercise of its discretionary powers under Section 482 of the Cr.P.C. 35. In that view of the matter, we are of the considered view that the High Court has passed the impugned judgment and order on a completely perfunctory and erroneous reasoning which depicts absence of careful consideration.

the appeal was thus allowed.

                        REMARK

The aforesaid discussion based on judicial precedents has categorically and conclusive adjudicated the legal aspect relating to the authority of Special Power of Attorney (SPA), limitation of it, if any whether in respect of SPA of individual or a firm or company/ The fetter attached to it, if any has also been discussed, deliberated and conclusion has been arrived at. The ambit is now well settled. There cannot be a straight jacket formula laid down in this regard, whether as regards personal knowledge of SPA that may be averred in the complaint or documents and the inference of authority and personal knowledge should be evident from the conjoint reading of the pleading averments contained therein, evidence, and in documents. Moreover, in the event of any doubt relating to SPA, the proper stage shall be to ascertain the same during trial and not to circumvent the process of trial, by quashing the complaint on the premise of alleged lack of authority or lack of personal knowledge.

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