Supreme Court: When there is a Specific Clause Permitting Sub-Delegation, A General Power of Attorney Holder Can Delegate His Powers

Supreme Court: When there is a Specific Clause Permitting Sub-Delegation, A General Power of Attorney Holder Can Delegate His Powers

The Supreme Court by its division bench comprising of Justices V. Ramasubramanian and Pankaj Mithal while adjudicating an appeal observed, though the general power of attorney holder cannot delegate his powers to another person but the same can be delegated when there is a specific clause permitting sub-delegation.

The brief facts of the case were that the appellant-company, M/s.Mita India Pvt. Ltd. awarded a contract to the respondent – Mahendra Jain for shifting of 33 K.V. electrical overhead line at its plant at Dewas. In connection with the said contract, the appellant-company by mistake made excess payment. The respondent agreed to refund the excess amount and issued two cheques to the appellant-company for its refund. The cheques were dishonored on account of instructions "stop payment."

There was a general power of attorney on behalf of the company in favour of one of its directors Kavindersingh Anand. The general power of attorney holder of the company, Kavindersingh Anand, authorized another person named Ripanjit Singh Kohli to file a complaint under Section 138 of the Negotiable Instruments Act on behalf of the company.

The issue was whether the complaint filed through Kohli was maintainable, when the general power of attorney was issued in favor of Anand. The High Court held the complaint to be not maintainable and quashed it invoking powers under Section 482 of the Code of Criminal Procedure, 1973 (Cr.PC).

The question that came up for consideration before the Supreme Court was whether the complaint was filed is maintainable and the High Court is justified in exercise of its power under Section 482 Cr.PC to set aside the orders of the trial court and that of the Revisional Court holding that the complaint is maintainable as it has been filed by the authorized representative/power of attorney holder and that the said power of attorney holder is legally entitled to depose in support of the complaint.

The Apex Court referred to the decision passed in the case of A.C. Narayanan v. State of Maharashtra and Another, where it had held the following principles:

i) Filing of a complaint under Section 138 Negotiable Instruments Act, 1881 through power of attorney holder is perfectly legal provided he has due knowledge about the transaction(s) in question;

ii) Power of attorney holder can depose and verify on oath to prove the contents of the complaint if he has witnessed the transaction;

iii) The complaint filed through power of attorney holder must contain an assertion/ that he had the knowledge about transactions in question;

iv) Functions under general power of attorney cannot be delegated to another person without a specific clause permitting the same in the general power of attorney.

v) The affidavits of complainant, his witnesses or his power of attorney holder are permissible and sufficient for taking cognizance on the complaint; and

vi) The complaint by power of attorney holder on behalf of the original complainant is maintainable though he cannot file a complaint in his own name.

The Supreme Court noted that the general power of attorney had specifically authorized Anand to appoint counsels or special attorneys. While interpreting the clauses of the power of attorney, the Court found that there was authorization to Anand to appoint not only lawyers but also special attorneys for related purposes.

"The said power of attorney as discussed above do provide for the sub-delegation of the functions of the general power of attorney holder and thus the filing of the complaint on behalf of the appellant company through its authorized representative Ripanjit Singh Kohli is not at all illegal or bad in law," the Court held.

The second aspect that the Court dealt with was whether Kavindersingh Anand could depose on behalf of the appellant company. The Court noted that he was one of the directors of the company who has been specifically authorized to lodge the complaint and had filed an affidavit stating that he has direct knowledge about the transactions.

The Court observed, "as the power of attorney holder is said to be having due knowledge about the transactions, he has the capacity to depose and the trial court or the Revisional Court committed no error of law in rejecting the applications of the respondent."

The Apex Court was of the view that since the power of attorney holder was said to have due knowledge about the transactions, he had the capacity to depose and the Trial Court or the Revisional Court committed no error of law in rejecting the applications of the respondent.

The Court set aside the decision passed by the High Court, while allowing the appeal.