Calcutta High Court (Appellete Side)
Dropadi Fabrics vs Kushal Saraf & Anr on 28 March, 2022
Form J(2) IN THE HIGH COURT AT CALCUTTA
Criminal Appellate Jurisdiction
Appellate Side
Present :
The Hon'ble Justice Bibek Chaudhuri
C.R.A. 201 of 2019
Dropadi Fabrics
Vs.
Kushal Saraf & Anr.
With
CRA 245 of 2019
Mayank International
Vs.
Kushal Saraf & Anr.
For the Appellant : Md. Sabir Ahmed, Adv.
Mr. Ajit Kumar Mitra, Adv.
Mr. Abhishek Acharya, Adv.
Mr. Apan Saha, Adv.
Mr. Shraman Saha.
For the State :
Heard on : 28.03.2022
Judgment On : 28.03.2022
Bibek Chaudhuri, J.
A short question is involved in the instant appeal for decision. The
point for adjudication may be framed as hereunder:
Whether a power of attorney holder executed by the proprietor of
a proprietorship concern can file a complaint under Section 138 of the
Negotiable Instruments Act.
Necessary facts involved in the instant appeal is that the
complainant Dropadi Fabrics is a proprietorship business engaged in
business of trading of cotton clothes. The proprietor of the said business
executed a power of attorney in favour of one Binod Saraf who was duly
authorized on behalf of the said business concern to sign, verify,
institute, depose and prosecute the proceeding arising out of a complaint
under Section 138 of the Negotiable Instruments Act on behalf of the
complainant.
During trial of the case the said general power of attorney dated
29th December, 2014 was marked as Exhibit.1. The learned Magistrate
without adjudicating the complaint case on merit dismissed the
complaint on the following grounds as hereunder:-
"In this present case, one Binod Saraf has filed the petition of
complaint but there is no mention who is said Binod Saraf. A plain
reading of the petition of complaint will not disclose as to in whose
version it is drafted."
"Section 142 of the Negotiable Instruments Act prescribe about
cognizance of offences and under sub- clause (a) to Section 142, the
statute says that "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."
The point for determination in the instant appeal is underlying res
integra. In Shankar Finance and Investments Vs. State of Andhra
Pradesh and Others reported in (2008) 8 Supreme Court Cases
536. it is held by the Hon'ble Supreme Court in Paragraph 10 & 11
which is quoted below:-
"10. As contrasted from a company incorported under the
Companies Act, 1956 which is a legal entity distinct from its
shareholders, a proprietary concern is not a legal entity distinct from its
proprietor. A proprietary concern is nothing but an individual trading
under a trade name. In civil law where an individual carries on business
in a name or style other than his own name, he cannot sue in the trading
name but must sue in his own name, though others can sue him in the
trading name. Therefore, if the appellant in this case had to file a civil
suit, the proper description of the plaintiff should be "Atmakuri Sankara
Rao carrying on business under the name and style M/s. Shankar
Finance & Investments, a sole proprietary concern." But we are not
dealing with a civil suit. We are dealing with a criminal complaint to
which the special requirements of Section 142 of the Act apply. Section
142 requires that the complainant should be payee. The payee is M/s
Shankar Finance & Investments. Therefore, in a criminal complaint
relating to an offence under Section 138 of the Act, it is permissible to
lodge the complaint in the name of the proprietary concern itself.
11. The next question is where a proprietary concern carries on
business through an attorney holder, whether the attorney holder can
lodge the complaint? The 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 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: (i) by the proprietor of
the proprietary concern, describing himself as the sole proprietor of the
"payee"; (ii) the proprietary concern, describing itself as a sole
proprietary concern, represented by its sole proprietor; and (iii) the
proprietor or the proprietary concern represented by the attorney holder
under a power of attorney executed by the sole proprietor. It follows
that in this case the complaint could have been validly filed by describing
the complainant in any one of the following four methods:
"Atmakuri Shankara Rao, sole proprietor of M/s Shankar Finance &
Investments"
or
"Ms Shankar Finance & Investments, a sole proprietary concern
represented by its proprietor Atmakuri Shankara Rao"
or
"Atmakuri Shankara Rao, sole proprietor of M/s Shankar Finance &
Investments, represented by his attorney holder Thamada
Satyanarayana"
or
"M/s Shankar Finance & Investments, a proprietary concern of
Atmakuri Shankara Rao, represented by his attorney holder Thamada
Satyanarayana".
What would have been improper is for the attorney holder
Thamada Satyanarayana to file the complaint in his own name as if he
was the complainant.
Thus, where the payee is a proprietary concern, the complaint can
be filed by three classes of persons - (a) by the proprietor of the
proprietary concern describing himself as the sole proprietor of the
payee; (b) the proprietary concern, describing itself as a sole proprietary
concern represented by its sole proprietor and (c) the proprietor or the
proprietary concern represented by the attorney holder under power of
attorney executed by the sole proprietor."
Therefore, in view of the above decision, a power of attorney
holder of a proprietor or proprietary concern is entitled to file complaint
on behalf of the payee.
However, if the learned Trial Court has any doubt as regards the
genuineness of the power of attorney, the Trial Court has requisite
power under Section 311 of the Code of Criminal Procedure to call for
the complainant, i.e. the proprietor to give evidence in the case.
Without considering the essential ingredients of evidence under Section
138 of the Negotiable Instruments Act, the learned Trial Judge cannot
dismiss the complaint case under Section 138 of the said Act on the
ground that it was filed by the power of attorney holder and he deposed
on behalf of the proprietorship concern.
In view of the above discussion, the judgment and order of
acquittal passed by the learned Metropolitan Magistrate, 20 th Court,
Calcutta in CSJ 0093087/2016 corresponding to TR 6073/2016 on 29 th
November, 2018 is liable to be set aside.
Be it mentioned here that the respondent remained unrepresented
at the time of hearing of the appeal. This Court has sought for
assistance of Mr. Sandipan Ganguly, learned Senior Counsel to make his
submission on the point of legal position on behalf of the respondent.
It is submitted by Mr. Ganguly that the decision of the Hon'ble
Supreme Court in Shankar Finance & Investments (supra) still hold
goods on the field. However, the complainant ought to have examined
during trial to authenticate power of attorney executed in favour of the
said Binod Saraf.
For the reasons stated above, the appeal is allowed on contest and
the same is remanded to the Court below with a direction to give an
opportunity to the complainant to depose in the Trial court under Section
311 of the Code of Criminal Procedure if the Court thinks that his
evidence is absolutely necessary for just decision of the case. The
learned Magistrate then shall dispose of the case on merit on the basis of
the evidence on record within 6 months from the date of receipt of the
lower court record along with the copy of this judgment.
(Bibek Chaudhuri, J.)
