Calcutta High Court (Appellete Side)
Amit Gupta vs The State Of West Bengal & Anr on 25 November, 2019
Author: Jay Sengupta
Bench: Jay Sengupta
IN THE HIGH COURT AT CALCUTTA
CRIMINAL REVISIONAL JURISDICTION
Appellate Side
Present:
The Hon'ble Justice Jay Sengupta
C.R.R. 473 of 2018
Amit Gupta
Versus
The State of West Bengal & anr.
For the petitioner : Mr. Ayan Basu
Mr. Iqbal Kabir
Mr. Prabir Kumar Das
Mr. Sumit Routh
..... Advocates
For the Opposite party : Mr. Diprav Deb
Mr. Subhamay Dewanji
......Advocates
Heard lastly on : 27.08.2019
Judgment on : 25.11.2019
Jay Sengupta, J.:
1. This is an application for quashing of proceeding in Complaint Case No. CN/0093082/2016 under Section 138 read with Section 141 of the Negotiable Instruments Act presently pending before the Learned Metropolitan Magistrate, 18th Court, Calcutta.
2. The allegations as contained in the petition of complaint, in brief, were that in or about January 2015 the present petitioner and two others being in charge of the accused company namely, Bajrang Road Construction Private Limited approached the complaint/opposite party no. 2 and placed an order for supply of bitumen. On 18.03.2015 the opposite party no. 2 accordingly sold and supplied bitumen to the accused for which the accused company issued five cheques of diverse dates totalling Rs. 7, 00,000/-. Out of these, three cheques were dishonoured for insufficiency of funds. This led to the filing of the present complaint case.
3. Mr. Ayan Basu, Learned Counsel appearing on behalf of the petitioner, submitted as follows. The petitioner had joined the accused company as a director with effect from 30.09.2015 as would be evident from a copy of the relevant Form No. DIR 12. Therefore, he was not a director of the accused company at the time of the relevant transaction i.e., in January 2015 and as such, could not be held responsible for the alleged offence of dishonour of cheque pertaining to such prior transaction. Secondly, as would be evident from the bank documents, all dues of the complainant company were paid soon before the issuance of the summons in the present case. Most importantly, in view of the ratio laid down by the Hon'ble Supreme Court in A.C. Narayanan's Case, (2014) 1 C Cr LR (SC) 555 an averment has to be made in the petition of complaint itself about the competence of the power of attorney holder in filing a petition of complaint under Section 138 of the Negotiable Instruments Act. However, in the instant case no such averment was present in the petition of complaint that the attorney was privy to or had personal knowledge about the transactions. Moreover, the averments made in the petition of complaint about the complicity of the present petitioner was absolutely insufficient. On this reliance was placed on a decision of the Hon'ble Apex Court in Ashokmal Bafna versus Upper India Steel Manufacturing and Engineering Company Limited, (2018) 14 SCC 202.
4. Mr. Diprav Deb, Learned Counsel appearing on behalf of the private opposite party, submitted as follows. The petitioner was the director of the accused company at the time of issuance of the cheque. It is quite irrelevant whether the petitioner had been a director at the time of the transaction in question. So far as the payments made by the accused company to the complainant are concerned, these were payments made by the accused against other cheques issued. As regards the ratio laid down in A.C. Narayanan's Case, the same was quite distinguishable from the present facts. Here, the Board itself directed a power of attorney holder to file an affidavit. As such, the averments made in the petition of complaint about the authorisation of the power of attorney to file the petition of complaint is quite sufficient. Reliance was placed on a decision of the Hon'ble Apex Court M.M.T.C. Limited and Anr. versus Medchl Chemicals & Pharma (P) Ltd. and Anr., (2002) 1 SCC 234, inter alia, on the point that an employee of a company can file a complaint in the name of and on behalf of the company without necessary authorisation and a want of authorisation can be rectified even at a subsequent stage. Relying on a decision of the Hon'ble Bombay High Court in Girish Jaggal and Anr. versus Shree Mallikarjun Shipping Pvt. Ltd., 2014 SCC Online Bom 1016, it was submitted that the ratio in the case of M.M.T.C Limited (supra) was not overruled by A.C. Narayanan's Case (supra). Therefore, any such defect in authorisation can even be rectified at a subsequent stage and consequently, a complaint cannot be quashed on this sole ground. Besides, the averment required to arraign a director of a company as an accused in a case of dishonour of cheque that such directors were in charge of and or responsible to the company for the day to day conduct of its business was very much there in the petition of complaint.
5. I heard the submissions of the Learned Counsels appearing on behalf of the petitioner and the private opposite party and perused the revision petition.
6. First, there is no requirement in law that in order to be arraigned as an accused in a case of dishonour of cheque, a director of a company ought to have been there in such capacity at the time when the transaction took place that occasioned the issuance of cheque. Besides, any such director who comes in subsequent to a transaction but prior to the issuance of cheque, as in the present case, in effect accepts the rights and liabilities of the company in respect of such prior transaction. Thus, it is no ground for quashing of a proceeding under the Negotiable Instruments Act.
7. Secondly, whether all the dues were paid before the issuance of summons or not is a disputed question of fact and as such, cannot be decided before trial, especially when no unimpeachable document of sterling quality is available to substantiate such payments.
8. As regards the averments required to implicate a director of a company for the commission of offence punishable under Section 138 read with Section 141 of the Negotiable Instruments Act, I find that there are sufficient averments contained in the petition of complaint. The decision in Ashokmal Bafna's Case (supra) lays down a settled proposition of law, which is not violated on the present facts.
9. Now, it comes down to the moot question of whether there was any non- compliance of the ratio laid down by a Special Bench of the Hon'ble Apex Court in A.C. Narayanan's Case (supra) that it has to be averred in a petition of complaint for the dishonour of cheque that the power of attorney holder filing it was either privy to the transactions or had personal knowledge of the same.
10. The relevant portion of the judgment in A.C. Narayanan's Case (supra) is extracted herein below :
" 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 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 s 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 attorney. Nevertheless, the general power of attorney itself can be cancelled and be given to another person."
11. Therefore, it is abundantly clear that as per the ratio laid down by a Special Bench of Three Judges of the Hon'ble Apex Court in A.C. Narayanan's Case (supra), a power of attorney holder who intends to file a petition of complaint under Section 138 of the Negotiable Instruments Act representing a company must have either witnessed the transaction as an agent of the payee/holder in due course or possessed due knowledge regarding the said transactions. Furthermore, it is required by the complainant to make a specific assertion as to the knowledge of the power of attorney holder in respect of the said transaction explicitly in the complaint. In the present case, no such averment was made by the complainant in the petition of complaint although a similar averment was subsequently made in the evidence on affidavit filed on behalf of the complainant company. The same is quite distinct and cannot be a surrogate for an averment which is to be made in the petition of complaint. This defect cannot be cured subsequently as the same would amount to rendering the ratio of the Hon'ble Apex Court otiose. Moreover, whether the Board itself authorised the power of attorney holder or not does not have any bearing on the true import of the ratio laid down in A.C. Narayanan's Case (supra).
12. In view of the ratio clearly laid down in A.C. Narayanan's Case (supra) as referred to above, I am unable to place any reliance on the decision of the Hon'ble Bombay High Court in Girish Jaggal's Case (supra). The ratio laid down by the Hon'ble larger Bench cannot be rendered ineffective simply on the ground that the decision in M.M.T.C Limited (supra) was not overruled by A.C. Narayanan's Case (supra). The decision in M.M.T.C Limited (supra), inter alia, deals with an initial lack of authority of a power of attorney holder in filing a complaint, which can be cured subsequently by sending another person having such authority. But, it does not deal with the present issue where a specific averment about the competence of a power of attorney holder, 'any' for that matter, is totally absent in the petition of complaint. If one reads the two decisions together at best an issue may arise requiring an interpretation as to whether the subsequent power of attorney holder who substitutes a former during a proceeding under Section 138 of the Negotiable Instruments Act should also have the requisite knowledge about the transactions in question or not or would it suffice if any such original or substituted power of attorney holder who had the requisite knowledge filed the petition of complaint and deposed in the case and for the rest of the proceeding, a substituted power of attorney holder who did not have such knowledge could continue the prosecution for the company. But, this is only of academic interest in the case at hand and as such, need not be delved into.
13. In the conclusion, I have no hesitation in holding that in view of the ratio laid down by the Hon'ble Supreme Court in the case of A.C. Narayanan (supra) that a petition of complaint under Section 138 of the Negotiable Instruments Act should contain the necessary averment about the knowledge of a power of attorney holder in respect of the transaction in question and in view of the fact that such an averment is absent in the instant petition of complaint, the impugned proceeding cannot be sustained in the eye of law.
14. I, therefore, allow the revisional application and quash the impugned proceeding.
15. CRR No. 473 of 2018 is disposed of.
16. Urgent photostat certified copies of this judgment may be delivered to the learned Advocates for the parties, if applied for, upon compliance of all formalities.
(Jay Sengupta, J)