Case: Shankar Finance &amp; Investments Vs. State of Andhra Pradesh &amp; Others

2. The appellantcomplainant filed a complaint dated 2.4.1996 against respondents 2 to 4 herein (namely M/s Speciality Aqua Ventures Ltd, its Managing Director and Chairman arrayed as accused 1, 2 and 3) alleging that a cheque for Rs.12,40,000/issued by the third respondent (on behalf of respondents 2 to 4) was dishonoured. Respondents 2 and 4 filed an application seeking discharge. The said petition was dismissed by the learned Magistrate by order dated 17.12.1998. The Revision filed by them against the order of the learned Magistrate was rejected by the Sessions Court on 12.2.2001. Thereafter, the fourth respondent herein (third accused) filed a petition under section 482 Cr.PC for quashing the proceedings. The fourth respondent contended that he could not be arrayed as an accused as the cheque was issued by the third respondent in his individual capacity. The High Court allowed the said petition on a different ground, by order dated 21.8.2002, and quashed the complaint as against the fourth respondent. It held that the complaint was not signed by the payee, that is, the sole proprietor of the payee concern, but was signed by his Power of Attorney Holder and that was not permissible.3. The said order of the High Court is challenged in this appeal by special leave. By interim orders dated 28.11.2003 and 2.4.2004, this Court stayed the operation of the order of the learned Single Judge and directed that the case should be proceeded with.

Court's reasoning:
Referring to the decision in Associated Cement Co. Ltd. Vs. Keshvanand (1998 (1) SCC 687 ), this Court heldhas further been held that no Magistrate shall insist that the particular person, whose statement was taken on oath at the first instance, alone can continue to represent the company till the end of the proceedings. It has been held that there may be occasions when different persons can represent the company. It has been held that it is open to the de jure complainant company to seek permission of the court for sending any other person to represent the company in the court. Thus, even presuming that initially there was no authority, still the company can, at any stage, rectify that defect. At a subsequent stage the company can send a person who is competent to represent the company. The complaints could thus not have been quashed on thisprinciple underlying the said observations will apply to cases under section 138 of the Act. In regard to business transactions of companies, partnerships or proprietary concerns, many a time the authorized agent or attorney holder may be the only person having personal knowledge of the particular transaction; and if the authorized agent orhas signed the complaint, it will be absurd to say that he should not be examined under section 200 of the Code, and only the Secretary of the company or the partner of the firm or the proprietor of a concern, who did not have personal knowledge of the transaction, should be examined. Of course, where the cheque is drawn in the name of the proprietor of a proprietary concern, but an employee of such concern (who is not an attorney holder) has knowledge of the transaction, the payee as complainant and the employee who has knowledge of the transaction, may both have to be examined. Be that as it may. In this case we find noattorney holder is the agent of the grantor. When the grantor authorizes 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 attorneyholder 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 methodsShankara Rao, sole proprietor of M/s. Shankar Finance &Shankar Finance & Investments a sole proprietary concern represented by its proprietor Atmakuri ShankaraShankara Rao, sole proprietor of M/s. Shankar Finance &Investments, represented by his Attorney Holder ThamakShankar Finance & Investments, a proprietary concern of Atmakuri Shankara Rao, represented by his Attorney Holder Thamadawould have been improper is for the Attorney holder Thamada Satyanarayana to file the complaint in his own name as if he was the complainant.10. This Court has always recognized that the power of attorney holder can initiate criminal proceedings on behalf of his Principal. In Ram Chander Prasad Sharma Vs. State of Bihar and Anr. (AIR 1967 SC 349 ), the prosecution was commenced in regard to tampering of electric meter seals, with a charge sheet submitted by the police after investigation on a first information report by one Bhattacharya, Mains Superintendent of Patna Electric Supply Co. (PES Co. for short). An objection was raised by the accused that the prosecution was incompetent as it was not launched by a person competent to do so.The assumption of the High Court that where the payee is a proprietary concern, the complaint can be signed only by the proprietor of the proprietary concern and not by a Power of Attorney holder of the proprietor, is not sound. It is not in dispute that in this case a power of attorney has been granted by Atmakuri Shankara Rao, as Proprietor of M/s Shankar Finance & Investments in favour of Thamada Satyanarayana and the same was produced along with thesaid description is proper and therefore, the complaint has been duly filed by the payee.12. The High Court has referred to the fact that the sworn statement before the learned Magistrate was of the attorney holder of the payee and not by the payee in person. According to the tenor of the order of the High Court, this was also irregular. But we find nothing irregular in such a procedure. It is now well settled that the object of section 200 of the Code in providing for examination of the complainant and his witnesses by the court is to satisfy itself about the existence of a prima facie case against the person accused of the offence and to ensure that such person is not harassed by false and vexatious complaints by issue of process; (See Nirmaljit Singh Hoon Vs. State of West Bengal1973 (3) SCC 753 ). Where the proprietor of the proprietary concern has personal knowledge of the transaction and the proprietor has signed the complaint, he has to be examined under section 200 of the Code. A power of attorney holder of the complainant who does not have personal knowledge, cannot be examined. But where the attorney holder of the complainant is in charge of the business of the payeecomplainant and the Attorney holder alone is personally aware of the transactions, and the complaint is signed by the attorney holder on behalf of thethere is no reason why the attorney holder cannot be examined as the complainant. We may, in this connection, refer to the decision of this Court in Janki Vashdeo Bhojwani Vs. Indusind Bank Ltd. (2005 (2) SCC 217 ), where the scope of an attorney holder acting on behalf of the principal in a civil suit governed by Code of Civil Procedure wase underlying the said observations will apply to cases under section 138 of the Act. In regard to business transactions of companies, partnerships or proprietary concerns, many a time the authorized agent or attorney holder may be the only person having personal knowledge of the particular transaction; and if the authorized agent orhas signed the complaint, it will be absurd to say that he should not be examined under section 200 of the Code, and only the Secretary of the company or the partner of the firm or the proprietor of a concern, who did not have personal knowledge of the transaction, should be examined. Of course, where the cheque is drawn in the name of the proprietor of a proprietary concern, but an employee of such concern (who is not an attorney holder) has knowledge of the transaction, the payee as complainant and the employee who has knowledge of the transaction, may both have to be examined. Be that as it may. In this case we find no