The High Court of Karnataka has said that Power of Attorney (PoA) holder can initiate criminal proceedings on behalf of his principal in cheque dishonour cases under the Section 138 of the Negotiable Instruments (NI) Act, 1881.
However, the court said the veracity of the complaint filed by the PoA holders would always be subject to cross-examination in the proceedings.
Justice Surah Govindaraj passed the order while dismissing a petition filed by an owner of a stone-crushers unit questioning the legality of the complaint of cheques dishonour cases filed by the Special PoA on behalf of the person aggrieved by the dishonour of the cheques.
Relying on a judgment of the apex court on the rights of PoA under NI Act, the High Court said that PoA/SPoA holder can file complaint, and can also depose and verify on oath before the court in order to prove the contents of the complaint provided that PoA/SPoA 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.
“During the course of cross-examination if it is established that the PoA holder has no knowledge regarding the transaction, then the complaint itself would fail and it is the risk which has been taken by the complainant by appointing PoA,” the court said.
