Thursday, March 3, 2022

POCSO ACT: FINAL WORDS ON “SKIN TO SKIN CONTACT”

 


POCSO ACT: FINAL WORDS ON “SKIN TO SKIN CONTACT”

The Protection of Children from Sexual Offence Act, 2012 (POCSO) has been enacted to protect the children from the offences of sexual assault, sexual harassment and pornography and provide for establishment of special courts for trial of such offences and for the matters connected therewith or incidental thereto. Since the sexual offences against children were not adequately addressed to by the existing laws and a large number of such offences were neither specifically provided for nor were they adequately penalized. The POCSO Act was therefore enacted with a view to provide a comprehensive law to protect the children from the offences of sexual assault, sexual harassment and pornography and to provide for establishment of Special Courts for trial of such offences and for matters connected therewith and incidental thereto.

HISTORICAL PERSPECTIVE

Pertinently, the Article 15 of the Constitution empowers the State to make special provisions for children. The Convention on the Rights of the Child, adopted by the General Assembly of the United Nations, as acceded to by the Government of India in 1992, prescribes a set of standards to be followed by all the State parties in securing the best interest of the child. The POCSO Act kept in view the Convention on the Rights of Child when the POCSO Bill was introduced and it was intended to enforce the rights of all children to safety, security and protection from sexual abuse and exploitation, and also intended to define explicitly the offences against children countered through commensurate penalties as an effective deterrence.

The Law Commission's 146th  Report (1993), 156th Report (1997) and 172nd Report (2000) dealt with some of these and associated issues. The 172nd Report recommended changes to the definition of rape, expanding its scope, and also incorporating the expanded definition of sexual assault.

The ratification of the UN Convention on the Rights of Children, 1992 by India entailing requirement to the nation states to adopt suitable legislation to combat coercion of children in sexual activity, exploitative use of children and children's exploitation for pornography and that formed the background of enacting POCSO. The Statement of Objects and Reasons for POCSO, cites the UN Convention, and further states that:

"The data collected by the National Crime Records Bureau shows that there has been increase in cases of sexual offences against children. This is corroborated by the "study on child abuse: India 2007" conducted by the Ministry of Women and Child Department. Moreover, sexual offences against children are not adequately addressed by the extent laws. A large number of such offences are neither specifically provided for nor are they adequately penalized. The interests of the child, both as a victim as well as a witness, need to be protected”.

It is felt that offences against children need to be defined explicitly and countered through commensurate penalties as an effective deterrence. A self-contained comprehensive legislation was felt necessary inter alia to provide for protection of children from the sexual offences and pornography with due regard for safeguarding the interest and well-being of the child at every stage of the Judicial process, incorporating child friendly procedures for reporting, recording of evidence, investigation and trial of offences and provision for establishment of Special Courts for speedy trial of such offences.

What is noteworthy to notice that the Indian Penal Code (IPC) at one stage was sought to be amended; through the introduction of a Bill in 2012. However, the said bill could not see the light of the day, and instead, the amendments were made, through an Ordinance which was later replaced by a Parliamentary Act. These amendments prescribed the enhanced punishment for certain offences (including Section 354). A new set of offences are also introduced into the IPC, such as:

Section 354 A:

sexual harassment, which is an offence involving unwelcome sexual advances or physical contact, demand or request for sexual favours, forceful exhibition of pornography to women or making sexually coloured remarks;

Section 354 B:

assault or use of criminal force to woman with intent to disrobe, or abets the doing of such act; voyeurism

Section 354 C:

Relating to the act of a man watching or capturing the image of a woman engaged in private activities (e.g. undressing), when the woman presumes she is assured of privacy and does not expect anyone to be watching;

Section 354D:

Stalking, which means following a woman and making or attempting to make contact (either physically or through electronic media) for personal interaction, despite a clear disinterest being displayed by the woman.

The backdrop of the present write up is the interpretation of Section 7, 8 and other provisions of POCSO Act 2012 while the Nagpur Bench of Bombay High Court has held that unless there is “skin to skin contact” POCSO Act shall have no applicability. High Court, while specifically accepting the consistent versions of the victim and her mother i.e. informant about the accused having taken the victim to his house, having pressed the breast of the victim, having attempted to remove her salwar and pressing her mouth, had committed gross error in holding that the act of pressing of breast of the child aged 12 years, in absence of any specific details as to whether the top was removed or whether he inserted his hands inside the top and pressed her breast, would not fall in the definition of sexual assault, and would fall within the definition of offence under Section 354 of the IPC. The High Court had further erred in holding that there was no offence since there was no direct physical contact i.e. "skin to skin" with sexual intent.

The interpretation of Section 7 at the instance of the High Court on the premise of the principle of "ejusdem generis" is also thoroughly misconceived. The word ejusdem generis has Latin origin mean "of the same kind," It is used to interpret loosely written statutes. It may be noted that the principle of "ejusdem generis" should be applied only as an aid to the construction of the statute. It should not be applied where it would defeat the very legislative intent.

The observations/findings made by the High Court, have caused furor, all over the country and the Attorney General for India has raised the plea against the judgment of high court, the National Commission for Women and the State of Maharashtra also files the appeals before this Court. The accused has also filed the appeal challenging his conviction for the offences under Section 354 and 342 of the IPC. The bunch of appeal was therefore considered by the hon’ble Supreme Court and a common judgment is passed, thereby setting aside the judgment of high court whereby the high court had held that no offence was made under POCSO Act.  



The Attorney General for India expressed grave concern about the manner in which the provisions contained in the POCSO Act were interpreted by the High Court, vehemently submitted that such interpretation would lead to devastating effect in the society at large. According to him, the High Court could not have acquitted the accused-Satish misinterpreting the provisions contained in Section 7 on the ground that there was no direct physical contact i.e. skin to skin contact made by the accused with the victim. It was submitted by him that the act by the accused clearly fell within the meaning of Section 7 punishable with Section 8 of the POCSO Act.

The POCSO Act and interpretation of its provisions has drawn much attention recently, more particularly whether “skin to skin contact” is a sine qua non for attracting provision of POCSO. The Nagpur bench judgment of Bombay High Court was much debated and the matter had reached before hon’ble Supreme Court. The Supreme Court has thus settled the issue in bunch of appeals/ and cross appeals captioned as under:

(1)    Attorney General for India Vs. Satish and Another [Criminal Appeal No. 1410 of 2021 @ Special Leave Petition (Crl) No. 925 of 2021]

(2)    National Commission for Women Vs. State of Maharashtra and Anr. [Criminal Appeal No. 1411 of 2021 @ Special Leave Petition (Crl) No. 1339 of 2021]

(3)    State of Maharashtra Vs. Satish [Criminal Appeal No. 1412 of 2021 @ Special Leave Petition (Crl) No. 1159 of 2021]

(4)    State of Maharashtra Vs. Libnus [Criminal Appeal No. 1413 of 2021 @ Special Leave Petition (Crl) No. 5071 of 2021] 

(5)    Satish Vs. State of Maharashtra, [Criminal Appeal No. 1414 of 2021 @ Special Leave Petition (Crl) No. 7472 of 2021].



PROVISIONS OF POCSO ACT & ITS INTERPRETATION

As per the definition of 'sexual assault' a 'physical contact with sexual intent without penetration' is essential ingredient for the offence. The definition starts with the words - "whoever with sexual intent touches the vagina, penis, anus or breast of the child or makes the child touch the vagina, penis, anus or breast of such person or any other person or does any other act with 'sexual intent.'

In other words, whoever, with sexual intent touches the vagina, penis, anus or breast of the child or makes the child touch the vagina, penis, anus or breast of such person or any other person, would be committing an offence of "sexual assault". Similarly, whoever does any other act with sexual intent which involves physical contact without penetration, would also be committing the offence of "sexual assault" under Section 7 of the POCSO Act. The prosecution was not required to prove a "skin to skin" contact for the purpose of proving the charge of sexual assault under Section 7 of the Act.

Section 7 pertaining to "sexual assault" reads as under:

"7. Whoever, with sexual intent touches the vagina, penis, anus or breast of the child or makes the child touch the vagina, penis, anus or breast of such person or any other person, or does any other act with sexual intent which involves physical contact without penetration is said to commit sexual assault”.

Section 8 providing for the punishment for sexual assault, reads as under :

"8 - Whoever, commits sexual assault, shall be punished with imprisonment of either description for a term which shall not be less than three years but which may extend to five years, and shall also be liable to fine.

Section 9 of the Act enumerates as to what is said to commit aggravated sexual assault. Clause (m) of the said provision being relevant is reproduced as under: 9(m)- whoever commits sexual assault on a child below twelve years;

Section 10 for providing Punishment for aggravated sexual assault -

"10- whoever, commits aggravated sexual assault shall be punished with imprisonment of either description for a term which shall not be less than five years but which may extend to seven years, and shall also be liable to fine".

Section 11 pertains to "sexual harassment" - A person said to commit sexual harassment upon a child when such person with sexual intent -

"(i) - utters any word or makes any sound, or makes any gesture or exhibits any object or part of body with the intention that such word or sound shall be heard, or such gesture or object or part of body shall be seen by the child; or

(ii) makes a child exhibit his body or any part of his body so as it is seen by such person or any other person;

(iii) to (vi)......

Explanation - Any question which involves "sexual intent" shall be a question of fact.

Section 12 for providing punishment for sexual harassment

"12 - whoever, commits sexual harassment upon a child shall be punished with imprisonment of either description for a term which may extend to three years and shall also liable to fine."

 Sections 29 and 30 pertaining to the statutory presumptions read as under:

"29 -When a person is prosecuted for committing or abetting or attempting to commit any offence under Section 3, 5, 7 and Section 9 of this Act, the Special Court shall presume, that such person has committed or abetted or attempted to commit the offence, as the case may be, unless the contrary is proved."

"30 - (1) In any prosecution for any offence under this Act which requires a culpable mental state on the part of the accused, the Special Court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he had no such mental state with respect to the act charged as an offence in that prosecution.

(2) For the purposes of this section, a fact is said to be proved only when the Special Court believes it to exist beyond reasonable doubt and not merely when its existence is established by a preponderance of probability".

Explanation - In this section, "culpable mental state" includes intention, motive, knowledge of a fact and the belief in, or reason to believe, a fact.                            

The main controversy centers around the interpretation of Section 7 of the POCSO Act. It is trite saying that while interpreting a statute, the courts should strive to ascertain the intention of the Legislature enacting it, and it is the duty of the Courts to accept an interpretation or construction which promotes the object of the legislation and prevents its possible abuse. As observed by the Supreme Court in the case of J.P. Bansal vs. State of Rajasthan & Anr, reported in AIR (2003) SC 1405, a statute is an edict of the legislature. The elementary principle of interpreting or construing a statute is to gather the meaning or sententia legis, To amplify it further, Sententia legis  means that the essence of the law lies in the spirit, and not in its letter, the letters are just the way to express the intentions of the law makers. The words are the external manifestation of intention that it involves. It has been observed therein that :

"12. Interpretation postulates the search for the true meaning of the words used in the statute as a medium of expression to communicate a particular thought. The task is not easy as the "language" is often misunderstood even in ordinary conversation or correspondence.

The tragedy is that although in the matter of correspondence or conversation the person who has spoken the words or used the language can be approached for clarification, the legislature cannot be approached as the legislature, after enacting a law or Act, becomes functus officio so far as that particular Act is concerned and it cannot itself interpret it. No doubt, the legislature retains the power to amend or repeal the law so made and can also declare its meaning, but that can be done only by making another law or statute after undertaking the whole process of law-making.

Where, therefore, the "language" is clear, the intention of the legislature is to be gathered from the language used. What is to be borne in mind is as to what has been said in the statute as also what has not been said.

In the case of Balaram Kumawat Vs. Union of India & Ors. reported in (2003) 7 SCC 628, the Supreme Court while elaborately discussing the basic rules of interpretation observed as under:

" Contextual reading is a well-known proposition of interpretation of statute. The clauses of a statute should be construed with reference to the context vis-à-vis the other provisions so as to make a consistent enactment of the whole statute relating to the subject-matter. The rule of "ex visceribus actus" should be resorted to in a situation of this nature.

In State of W.B. Vs Union of India (AIR at p. 1265, para 68), the learned Chief Justice stated the law thus:

"The Court must ascertain the intention of the legislature by directing its attention not merely to the clauses to be construed but to the entire statute; it must compare the clause with the other parts of the law, and the setting in which the clause to be interpreted occurs."

The said principle has been reiterated in R.S. Raghunath v. State of Karnataka [(1992) 1 SCC 335 : 1992 SCC (L&S) 286 : (1992) 19 ATC 507 : AIR 1992 SC 81] (AIR at p. 89).

Furthermore, even in relation to a penal statute any narrow and pedantic, literal and lexical construction may not always be given effect to. The law would have to be interpreted having regard to the subject matter of the offence and the object of the law it seeks to achieve. The purpose of the law is not to allow the offender to extricate itself from their act and taking recourse to mosaic of law to their advantage. Criminal law as per criminal jurisprudence has to be construed strictly.



The contentions of accused & RULE OF LENITY

On behalf of the accused it was contended that the phrases 'sexual intent', 'touches' and 'physical contact' have not been defined in the POCSO Act, however the explanation to Section 11 states that any question which involves 'sexual intent' shall be a question of fact. The accused had put reliance on the decision of the Bombay High Court in case of Bandu Vithalrao Borwar v/s State of Maharashtra, in Criminal Appeal No. 50 of 2016, decided on 17.10.2016, and contended that the expression "sexual intent" cannot be confined to any predetermined format or structure and that unlike POCSO Act, the IPC offence under section 354 uses the terms 'assault' and 'criminal force'. The accused further contended that Rule of Lenity shall be applicable.

As per the settled legal position, if the specific words used in the section exhaust a class, it has to be construed that the legislative intent was to use the general word beyond the class denoted by the specific words. So far as Section 7 of the POCSO Act is concerned, the first part thereof exhausts a class of act of sexual assault using specific words, and the other part uses the general act beyond the class denoted by the specific words.

Invoking the Rule of Lenity, that this rule of statutory construction requires a court to resolve statutory ambiguity in a criminal statute in favour of the accused or to strictly construe the statute against the State. In this regard, he has relied upon the decisions of the United States Supreme Court in the case of "The United States vs. Wilt Berger 4; Connally v. General Construction Co.5 and in case of United States vs. Kozminski .

The accused in the case had invoked Rule of Lenity.

Before going further, it may be worthwhile to know about Rule of Lenity. This is a rule requiring that any ambiguities in a criminal statute relating to prohibitions and penalties should be resolved in favor of the accused , when doing so may not be contrary to legislative intent.

The invocation of "Rule of lenity" is inapplicable in the context of the case Attorney General for India Vs. Satish and Another (Supra). The various judgments of the United States Supreme Court in case of Ladner vs. United States, 358 US 169; United States vs. Kozminski, 487 US 931; United States vs. Wiltberger, 18 US 76, relates to "Rule of Lenity" wherein it is required that a court shall have to resolve statutory ambiguity in a criminal statute in favour of the accused, or to strictly construe the statute against the State. This runs contrary to the settled proposition of law that the statutory ambiguity should be invoked as a last resort of interpretation. Where the Legislature has manifested its intention, courts may not manufacture ambiguity in order to defeat that intent. In this regard. In this context supreme court had accepted the contention of National Commission for Women as regards relying upon the precise observations made by the Court of Appeal, California, in case of The People vs. REID II, 246 Cal. App. 4Th, 822 as follows:

"[T]he 'touchstone' of the rule of lenity 'is statutory ambiguity.' [Citation.]" (Bifulco v. United States (1980) 447 U.S. 381, 387, 100 S. Ct. 2247, 65 L.ED.2d 205.) " 'the rule applies only if the court can do no more than guess what the legislative body intended; there must be an egregious ambiguity and uncertainty to justify invoking the rule.' "(People v. Avery (2002) 27 Cal. 4Th 49, 58, 115 Cal. Rptr.2d 403, 38 P.3d 1.) "Where the Legislature has manifested its intention, courts may not manufacture ambiguity in order to defeat that intent." (Bifulco v. United States supra, at p. 387, 100 S. Ct. 2247.) Additionally, "ambiguities are not interpreted in the defendant's favor if such an interpretation would provide an absurd result, or a result inconsistent with apparent legislative intent. (People v. Cruz (1996) 13 Cal. 4Th 764, 783, 55 Cal. Rptr. 2D 117, 919 P. 2d 731.)"

It is submitted by the accused that the expression "sexual intent" cannot be confined to any predetermined format or structure. It is submitted that unlike POCSO Act, the IPC offence under section 354 uses the terms 'assault' and 'criminal force'. However, since 'sexual assault' is defined under the POCSO Act, the definition of the words 'assault' or 'criminal force' contained in IPC cannot be imported into the POCSO Act, though permitted under section 2(2) of the POCSO Act. While fairly conceding that the first part of Section 7 of the POCSO Act, which pertains to the act of touching the private parts of the child, may not require 'skin to skin contact', though, so far as, the second part i.e. " the other act with sexual intent which involves physical contact without penetration" is concerned, 'the skin to skin contact' is required to be proved by the prosecution. Thus, by invoking the Rule of Lenity that this rule of statutory construction requires a court to resolve statutory ambiguity in a criminal statute in favour of the accused or to strictly construe the statute against the State, according to the accused.



ANALYSIS

In both the cases, the main controversy centers around the interpretation of Section 7 of the POCSO Act. It is trite saying that while interpreting a statute, the courts should strive to ascertain the intention of the Legislature enacting it, and it is the duty of the Courts to accept an interpretation or construction which promotes the object of the legislation and prevents its possible abuse.

 

As observed by the Supreme Court in the case of J.P. Bansal vs. State of Rajasthan & Anr (Supra) a statute is an edict of the legislature. The elementary principle of interpreting or construing a statute is to gather the sententia legis, the true intention of the Legislature.

The tragedy is that although in the matter of correspondence or conversation the person who has spoken the words or used the language can be approached for clarification, the legislature cannot be approached as the legislature, after enacting a law or Act, becomes functus officio so far as that particular Act is concerned and it cannot itself interpret it. No doubt, the legislature retains the power to amend or repeal the law so made and can also declare its meaning, but that can be done only by making another law or statute after undertaking the whole process of law-making.

In the aforesaid premises, the judgments and orders dated 19.01.2021 and 15.01.2021 passed by the High Court of Judicature at Bombay, Nagpur Bench, at Nagpur in Criminal Appeal No. 161 of 2020 and Criminal Appeal No. 445 of 2020 respectively are quashed by the hon’ble Supreme Court and the judgments and orders dated 05.02.2020 and 05.10.2020 passed by the Extra Joint Additional Sessions Judge, Nagpur in Special Child Protection Case No. 28 of 2017 and by the Special Court, Gadchiroli in POCSO Case No. 07/2019 are restored.

The accused-Satish is thus convicted for the offences punishable under Section 8 of the POCSO Act and under Sections 342, 354 and 363 of the IPC and further direction was passed to undergo rigorous imprisonment for a period of three years and to pay fine of Rs.500/- and in default thereof to suffer simple imprisonment for a period of one month for the offence under Section 8 of the POCSO Act. As the accused was sentenced for the major offence under Section 8 of the POCSO Act, hence, no separate sentence is imposed upon him for the other offences under the IPC.

Similarly, the accused-Libnus convicted for the offences punishable under Sections 354-A (1)(i) and 448 of the IPC as also for the offences under Sections 8, 12 and 10 read with Section 9 (m) of the POCSO Act. He is also directed to undergo rigorous imprisonment for a period of five years for the offence under Section 10 of the POCSO Act and to pay fine of Rs. 25,000/- (Rupees twenty five thousand only) and in default thereof to suffer simple imprisonment for a period of six months. As the accused is sentenced for the major offence under Section 10 of the POCSO Act, no separate sentence was imposed upon him for the other offences under the IPC and the POCSO Act.

                                                            --------

                                                Anil K Khaware

Founder & Senior Associate

Societylawandjustice.com

Saturday, February 26, 2022

SECTION 138 OF NI ACT: WHETHER S.P.A CAN PROSECUTE THE COMPLAINT?

 


Section 138 of NI Act: Whether S.P.A can prosecute the complaint?

The Courts of Magistrates are often beset with the objection as regards the maintainability of complaint instituted by a Power of Attorney authorized by the payee or by Authorised Representative of company. The validity of appointment of such Special Power of Attorney (SPA) or Authorised Person of a company, as the case may be are raised in pre-trial and post trial stage and considerable time is consumed to sort out the issues. More often, it is also found that the objections are aimed at delaying the proceedings.  The Supreme Court has periodically passed judgments in this regard so as to avoid any controversy. Most recently, the Supreme Court has again dealt with the issue in a matter captioned as M/s TRL Krosaki Refractories Ltd. Versus M/s SMS Asia Private Limited & Anr (Arising out of SLP (Crl.) No.3113 of 2018) reported as 1 2022 LiveLaw (SC) 196, to set at rest the issues arising in the above context.

When a company is the payee of the cheque and based on dishonor of the cheques, when a complaint is lodged filed under Section 138 of Negotiable Instruments Act (In short “NI Act”), the complainant shall be represented by an employee who is authorized, the company, being a juristic entity, could only be represented by a natural person. The sworn statement to the effect that the complainant (Company) is represented by an authorized person who has knowledge about the transaction is deemed sufficient for summoning the accused, if other ingredients of section 138 of NI Act are satisfied. If any serious dispute with regard to the authority crops up, the same are to be dealt with in trial.



HOW TO SHOW AUTHORITY IN COMPLAINT?

 The hon’ble Supreme Court in a matter reported as A.C. Narayanan vs. State of Maharashtra & Anr. (2014) 11 SCC 790 has held that "specific assertion as to the knowledge of the power of attorney holder" about the transaction should be "said explicitly". It is further held that there is no requirement of any specific format about it or no manner of doing it is prescribed. All that is necessary is to demonstrate before the concerned Magistrate that the complaint filed is in the name of the "payee" and further, if the person who is prosecuting the complaint is different from the payee, the authorization is provided and it should further be stated that the contents of the complaint are within his knowledge. Therefore, there is no straightjacket formula about it and can only be gathered from the circumstance and the manner in which it has been averred and conveyed, based on the facts of each case. The complaint may be drafted in a different ways and may vary from case to case basis and the same shall remain contingent on the level of the skills of the person drafting the same which by itself, cannot defeat a substantive right. However, what is to be gathered conclusively is the fact that the contents as available in the pleading that conveys the meaning to the effect that the person who has filed the complaint, is duly authorized and have knowledge of the transaction. There may be a situation, where the authorized person may also be, in addition, the witness to the transaction or in agreement and supporting documents on the record may by themselves demonstrate that and in such a circumstances, knowledge is inbuilt and therefore, the requirement of Section 142 of the NI Act shall stand satisfied.

 

The provisions of section 142 of NI Act are reproduced as under for ready reference:

“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; (b) xxxxxxxxxx (c) xxxxxxxxxx”

CAN A COMPLAINT BE QUASHED ON ALLEGED LACK OF AUTHORITY

The Supreme Court has held that a petition seeking quashing of complaint u/s 482 of Cr.P.C before high courts on the premise of lack of authorization in the initial stage of complaint should not be entertained as any serious dispute could only be dealt with in trial.

In M/s TRL Krosaki Refractories Ltd (Supra), the hon’ble Supreme Court while setting aside the order passed by the high court whereby the high court had quashed summoning on the accused, had clearly held that the cognizance was prima facie right, if necessary averments about knowledge of transaction and authority finds mention in complaint u/s 138 NI Act. The said issue could not have been entertained in a petition u/s 482 of Cr.P.C.  The Magistrate is required to be prima facie satisfied, while taking cognizance on the complaint, that there is sufficient material for issuance of summons.

In the M/s TRL Krosaki Refractories Ltd (Supra) the hon’ble Supreme Court has held that a perusal of the complaint  would disclose that the complainant named therein through its General Manager (Accounting). The cheques i.e the subject matter of the said complaint under Section 138 of NI Act would disclose that the “payee” named in the said cheques is M/s. TRL Krosaki Refractories Limited. If that be the position, the requirement as contemplated under Section 142 (1) (a) of NI Act that the complaint ought to be in writing and that it should be filed by the payee or the holder in due course, stands satisfied.

When, the complainant/payee is a company, an authorized 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 authorized 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. As noted in Samrat Shipping Co. Pvt. Ltd. Vs. Dolly George (2002) 9 SCC 455,, dismissal of a complaint at the threshold by the Magistrate on the question of authorisation, would not be justified. Similarly, in such circumstances entertaining a petition under Section 482 to quash the order taking cognizance by the Magistrate would be unjustified when the issue of proper authorisation and knowledge can only be an issue for trial.


 

AUTHORITY OF POWER OF ATTORNEY: Judicial prism

In A.C. Narayanan (supra) it is noticed that Supreme Court, while considering the scope of Section 142 (1)(a) of N.I. Act had referred to earlier decisions in M/s. M.M.T.C. Ltd. vs. Medchi Chemicals and Pharma (P} Ltd., (2002) 1 SCC 234, Vishwa Mitter vs. O.P. Poddar, (1983) 4 SCC 701 wherein it was held that anyone can set the criminal law in motion by filing a complaint of facts constituting an offence, before a Magistrate entitled to take cognizance. It was further held in Vishwa Mitter (supra) that if any special statute prescribes offences and makes any special provision for taking cognizance of such offences under the statute, then the complaint requesting the Magistrate to take cognizance of the offence must satisfy the eligibility criterion prescribed by such statute. It was thus held that the only eligibility criteria prescribed by Section 142 of NI Act is that the complainant must be by the payee or the holder in due course. However, in a subsequent decision in Janaki Vashdeo Bhojwani & Anr. vs. Indusind Bank Ltd. & Ors. (2005) 2 SCC 217, while considering the right of a power of attorney holder to act on behalf of the principal in a civil proceeding, the provision contained in Order III Rule 1 and 2 of CPC was kept in view and it was held that if the power of attorney holder has rendered some acts in  pursuance of the power of attorney, he may depose for the principal in respect of such acts, but he cannot depose for the principal for the acts done by the principal and not by him. Similarly, he cannot depose for the principal in respect of the matter of which only the principal is entitled to be cross examined. As the aforesaid two decisions which were rendered by the Two Member Benches were assumed to be in conflict with each other by another Division Bench and therefore it desired clarification.

In that view, the matter the Three Judge Bench in A.C. Narayanan (supra) has held then that the said two judgments of the Supreme Court are not in conflict with each other and has considered the scope and requirement of Section 142 (1)(a) of NI Act and formulated the questions for consideration as contained in para 21 of the judgment which read as hereunder:

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

21.1. 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?

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

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

21.4. 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?

21.5. 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?”

The consideration made in paras 29 to 30 would be relevant to be noted, which read as hereunder:

“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. 30. In the light of the discussion, we are of the view that the power-of-attorney holder may be allowed to file, appear and depose for the purpose of issue of process for the offence punishable under Section 138 of the NI Act. An exception to the above is when the power-of-attorney holder of the complainant does not have a personal knowledge about the transactions then he cannot be examined. However, where the attorney holder of the complainant is in charge of the business of the complainant payee and the attorney holder alone is personally aware of the transactions, there is no reason why the attorney holder cannot depose as a witness. Nevertheless, an explicit assertion as to the knowledge of the power-of-attorney holder about the transaction in question must be specified in the complaint. On this count, the fourth question becomes infructuous.”

The answer to the question raised for consideration is contained in para 33 which read as hereunder:

33. While holding that there is no serious conflict between the decisions in M.M.T.C. and Vashdeo Bhojwani, we clarify the position and answer the questions in the following manner:

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

33.2. 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.

33.3. 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.

33.4. 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. 33.5. 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.”



         A cumulative perusal of the facts of the instant case would indicate that the requirement as indicated in A.C. Narayanan, (supra) are in fact satisfied in M/s TRL Krosaki Refractories Ltd (Supra). Firstly, as noted above, the complaint was filed in the name of the company i.e., “the payee”, through General Manager (Accounting). The authorisation by the Managing Director in his favour  discloses that Managing Director of the appellant company had authorised the General Manager (Accounting) to institute criminal proceedings, including proceedings under the provisions of the NI Act and civil proceedings on behalf of the company against M/s. SMS Asia Private Limited (respondent), to represent the company and take all necessary actions in the matter in learned SDJM’s Court. The specimen signature of AR was also attested by the Managing Director. The Managing Director apart from himself being the key managerial personnel of the appellant company, has also been delegated the power by the Board of Directors through the document. Through the said document the Managing Director has been delegated, in general, all powers necessary for the management and operation of the company and it has been specified among others, to exercise the power relating to important issues affecting the company’s land and property. Through the said document, the Managing Director is also empowered to delegate where necessary and to the extent required, any of the powers delegated to him, to his subordinate officers. The above noted documents would disclose that the complaint under Section 138 NI Act was filed on behalf of the “payee” company with due authorisation.

A meaningful reading of the complaint shall be of significance and 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 effect that the person who has filed the complaint, is stated to be authorized 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 authorized 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 N.I. Act was satisfied.

In Vinita S. Rao vs. Essen Corporate Services (P) Ltd. (2015) 1 SCC 527, it is held that a pleading of such a nature to indicate the power to prosecute the complaint and knowledge of the transaction as sufficient to maintain the complaint.

The Supreme Court had clarified that it is to be kept in perspective 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. In this regard in Samrat Shipping Co. Pvt. Ltd.(supra), while disapproving the manner in which cognizance was refused to be taken and the complaint had been dismissed by the learned Magistrate at the threshold, the Supreme Court has held as hereunder:

“ Having heard both sides we find it difficult to support the orders challenged before us. A company can file a complaint only through human agency. The person who presented the complaint on behalf of the Company claimed that he is the authorized representative of the company. Prima facie, the trial court should have accepted it at the time when a complaint was presented. If it is a matter of evidence when the accused disputed the authority of the said individual to present the complaint, opportunity should have been given to the complainant to prove the same, but that opportunity need be given only when the trial commences. The dismissal of the complaint at the threshold on the premise that the individual has not produced certified copy of the resolution appears to be too hasty an action. We, therefore, set aside the impugned orders and direct the trial court to proceed with the trial and dispose of it in accordance with law. Parties are directed to appear before the trial court on 31.1.2000.”

Further, in National Small Industries Corporation Ltd. Vs. State (NCT of Delhi) and Ors. (2009) 1 SCC 407, the Supreme Court has exhaustively considered the validity of a complaint under Section 138 of N.I. Act and the satisfaction of the requirement under Section 142 thereof. In the said context this Court has held as hereunder:

“ 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 NI 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 that Act. However, the procedure relating to initiation of proceedings, trial and disposal of such complaints, is governed by the Code. 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, if a company is the complainant. A company can be represented by an employee or even by a nonemployee authorized and empowered to represent the company either by a resolution or by a power of attorney”.

While passing a combined judgment in the cases A.C. Narayanan v. State of Maharashtra & Anr. (Criminal Appeal No. 73 of 2007) and Shri. G. Kamlakar v. M/S Surana Securities Ltd. & Anr. (Criminal Appeal No. 1437 of 2013), the Supreme Court held that Power of Attorney can file a complaint under Section 138 of Negotiable Instruments Act, 1881 provided that he must specifically plead and support the complaint by relevant documents. If the Power of Attorney does not know about the transactions of the company then he/she cannot be examined.



SECTION 142 NI Act and Section 200 Cr.P.C: DIAGNOSTIC FEATURES

Thus in every complaint, where the complainant is an incorporeal body, there is a complainant – de jure, and a complainant de facto. Clause (a) of the proviso to Section 200 provides that where the complainant is a public servant, it will not be necessary to examine the complainant and his witnesses. Where the complainant is an incorporeal body represented by one of its employees, the employee who is a public servant is the de facto complainant and in signing and presenting the complaint, he acts in the discharge of his official duties. Therefore, it follows that in such cases, the exemption under clause (a) of the first proviso to Section 200 of the Code will be available.

Resultantly, when in a complaint in regard to dishonour of a cheque issued in favor 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. 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.” (emphasis supplied)

In that view, the position that would emerge is that when a company is the payee of the cheque based on which a complaint is filed under Section 138 of N.I. Act, the complainant necessarily should be the Company which would be represented by an employee who is authorized. Prima facie, in such a situation the indication in the complaint and the sworn statement (either orally or by affidavit) to the effect that the complainant (Company) is represented by an authorized person who has knowledge, would be sufficient. The employment of the terms “specific assertion as to the knowledge of the power of attorney holder” and such assertion about knowledge should be “said explicitly” as stated in A.C. Narayanan (supra) cannot be understood to mean that the assertion should be in any particular manner, much less only in the manner understood by the accused in the case. All that is necessary is to demonstrate before the learned Magistrate that the complaint filed is in the name of the “payee” and if the person who is prosecuting the complaint is different from the payee, the authorisation thereof and that the contents of the complaint are within his knowledge.

REMARK

Thus, what is borne out from above is the fact that the Special Power of Attorney (SPA), if duly authorized by the payee can prosecute the complaint on behalf of the complainant, so long as, the said SPA shall have personal knowledge about the transaction and the said averments are there in complaint or affidavit and the document with regard to the authority is placed on record. The Magistrates shall thus be within its authority to take cognizance of the complaint. Similarly, authorization, either through resolution passed by Board of Directors’ of complainant company, or through GPA coupled with personal knowledge and averments to that effect in the complaint shall be enough. Even a non- employee of the complainant company could be authorized, if the said person has personal knowledge to that effect and necessary averment is there in the complaint or in affidavit filed before the ld Magistrate u/s 138 of NI Act. It is also clearly settled that any serious dispute with regard to the authority to the AR or SPA shall be the subject matter of trial and invocation of section 482 of Cr.P.C by a party for seeking quashing on that premise is clearly deprecated by hon’ble Supreme Court and in the dicta as referred to above, it is clearly held that the quashing of summoning order cannot be permitted in the above backdrop. Still further, as held in in A.C Narayanan (Supra) there is no impediment in authorising someone as SPA in individual complaint, if the stipulations as narrated above i.e personal knowledge about the transaction and averments to that effect finds mention in the complaint.

                                           Anil K Khaware

                                           Founder & Senior Associate

                                           Societylawandjustice.com

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