The role of a power of attorney holder in cheque-dishonour proceedings is a recurring procedural issue. The Supreme Court in A.C. Narayanan v. State of Maharashtra clarified the circumstances in which a power of attorney holder may file, verify and depose in a complaint under Section 138 of the Negotiable Instruments Act, 1881.
The knowledge requirement
A power of attorney holder who has no personal knowledge of the relevant transaction cannot simply be treated as a witness capable of proving facts of which the holder has no knowledge. The Supreme Court explained that the complaint should specifically indicate the holder's knowledge where the holder is to represent the complainant in this manner.
The complaint remains that of the payee or holder in due course
The attorney holder does not become the payee merely because authority has been granted. The complaint must be instituted on behalf of the person legally entitled to complain, and the authority under the power of attorney should be produced and examined where necessary.
Practical point
Before filing a Section 138 complaint through an attorney holder, the power of attorney, the holder's personal knowledge of the transaction, and the pleadings concerning that knowledge should be carefully checked.
This article is provided for general legal awareness and should not be treated as legal advice for a particular case. The law and authorities should be checked for the date and facts of the individual matter.