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NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION  

CRIMINAL APPEAL Nos.2065-2066 OF 2014 [Arising out of Special Leave Petition (Crl.) Nos.4682-4683 of 2012]

Vinita S. Rao          … Appellant

Vs.

M/s. Essen Corporate Services  Pvt. Ltd. & Anr.         …   Respondents

J U D G M E N T

(SMT.) RANJANA PRAKASH DESAI, J.

1. Leave granted.

2. The  challenge  in  this  appeal  is  to  the  orders  dated  

7/3/2012 and 12/3/2012 passed by a learned Single Judge of  

the  Karnataka  High  Court  allowing  the  criminal  revision  

petition filed by the respondents under Section 397(1) of the  

Code of Criminal Procedure, 1973 (“the Code”). The prayer

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made by the respondents in  the criminal  revision petition  

was for setting aside order dated 17/9/2009 passed by the  

Fast Track Court (Sessions)-V, Bangalore in Criminal Appeal  

No.1897 of 2006 and also order dated 9/11/2006 passed by  

the Court of the XVth  Addl.  Chief Metropolitan Magistrate,  

Bangalore in C.C. No.4116 of 2004.   

3. The  appellant  is  the  original  complainant.   The  

respondents  are  original  accused  1  and  2  respectively.  

Respondent 1 is a private limited company and respondent 2  

is  its  Managing  Director  who  looks  after  the  day-to-day  

affairs  of  respondent  1  company.   The  respondents  are  

financial  consultants  and sub-brokers  who are engaged in  

the  business  of  trading  inter  alia on  the  National  Stock  

Exchange, the Bombay Stock Exchange and the Bangalore  

Stock Exchange.  

4. The  appellant  filed  a  complaint  for  the  offence  

punishable under Section 138 of the Negotiable Instruments  

Act, 1881 (‘the NI Act’) against the respondents.  Gist of  

the complaint needs to be shortly stated.

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The appellant  and  her  husband  had  discussions  with  

respondent 2 regarding trading in 10000shares of Hindustan  

Lever Limited belonging to the appellant.  The respondents  

advised the appellant to entrust the said 10000 shares to  

them and it was represented that those shares would not be  

sold  outright;  that  the  respondents  would  utilize  their  

expertise and knowledge of the markets to sell and buy back  

the shares regularly and they would thereby earn profits for  

the appellant.  The shares were to be held in trust and any  

dividends and benefits accruing on the 10000 shares to the  

appellant  were to be made over to  her and,  at the same  

time, the respondents undertook to trade in the shares when  

time was favourable, after studying market trends to make  

profit for the appellant.  It was asserted that the appellant  

could,  at  any time,  cease trading and take back the said  

10000  shares.  On  this  understanding,  the  appellant  

entrusted the said 10000 shares of Hindustan Lever Limited  

to  the  respondents  by  transferring  the  shares  from  her  

Demat Account to that of the respondents.  On 05/03/2002  

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the respondents addressed a letter acknowledging receipt of  

the  said  10000 shares.   In  the  month  of  April,  2002,  the  

appellant  had  a  doubt  about  the  intention  of  the  

respondents.   On  25/04/2002  the  appellant  addressed  a  

letter to the respondents requesting them to return the said  

10000  shares.   On  20/05/2002  the  respondents  replied,  

undertaking to return the said shares in lots of 500/10000  

citing  difficulties  between  them and  their  main  broker  as  

reason  for  delay.   Another  letter  was  addressed  by  the  

respondents  undertaking  that  the  first  lot  of  500  shares  

would  be  returned  by  24/05/2002  and  all  10000  shares  

would  be returned by 30/06/2002.   A  separate letter  was  

addressed in relation to the monies due to the appellant on  

account of dividends accruing and profits from transactions  

in  the  shares.   On  25/06/2002  the  respondents  sought  

extension of time to return the shares and confirmed that a  

sum of Rs.1,54,000/- was due to the appellant on account of  

dividends and profits from share transactions.  By August,  

2002, the respondents returned only 1460 shares instead of  

6000 shares as agreed by them.  The appellant addressed a  

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letter demanding the balance 8540 shares.  The respondents  

sought  time  till  31/12/2002  to  return  the  shares  and,  in  

return  for  extension  of  time,  offered  to  give  cheques  as  

surety for the value of shares being Rs.20,75,220/- as well as  

Rs.1,79,500/- being the amounts due towards dividends and  

profits from transactions in shares.  The appellant agreed to  

and  extended  time  till  31/12/2002.   On  26/12/2002,  the  

respondents returned another 1040 shares to the appellant.  

Thus,  in  all,  2500 shares  were  returned  to  the  appellant.  

However, 7500 shares remained with the respondents.  The  

respondents sought time upto 30/06/2003.   To secure the  

interest of the appellant, the respondents offered to replace  

the previous cheques dated 30/09/2002 with fresh cheques  

securing the value of 7500 shares and the money due to the  

appellant.  The appellant acceded to this request in the hope  

of recovering her shares.  The respondents addressed two  

letters  dated  22/02/2003  reiterating  their  commitment  to  

return the shares as well as amounts due to the appellant  

and  recording  the  deposit  of  two  cheques  totalling  

Rs.18,22,500/-  towards  the  value  of  shares  as  well  as  a  

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separate  cheque  for  Rs.1,79,500/-  towards  dividends  and  

profits due from the transactions in the said shares.  

As the extension of time was expiring, the respondents  

again sought further extension of time till  31/12/2003 vide  

letter  dated  30/6/2003  and  for  replacement  of  earlier  

cheques,  enclosed two cheques;  being  cheque No.392942  

dated 01/08/2003 for a sum of Rs.8,50,000/- and cheque No.  

392943 dated 01/08/2003 for a sum of Rs.9,72,000/- both  

drawn on Corporation Bank, M.G. Road Branch, Bangalore,  

towards  the  value  of  7500  shares  in  Hindustan  Lever  

Limited.   The respondents addressed another  letter  dated  

30/6/2003  enclosing  another  cheque  bearing  No.  392944  

dated 01/08/2003  for  a  sum of  Rs.1,79,500/-  towards  the  

value of profits and dividends received in respect of the said  

shares.   It  was  stated  in  the  said  letter  that  if  the  

respondents  fail  to  return  the  shares  by  31/12/2003,  the  

appellant  could  deposit  the  said  cheques  to  recover  their  

dues.   As  the  respondents  had  failed  to  return  the  7500  

shares  or  make  over  the  amounts  due  as  promised,  the  

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appellant presented the three cheques bearing Nos. 392942,  

392943 and 392944 to her banker – the Shamrao Vithal Co-

operative  Bank  Limited  for  collection  on  2/1/2004.   On  

03/01/2004 the three cheques were returned unpaid by the  

respondents’ bank, under two cheque return memos citing  

‘insufficient  funds’.   On  receipt  of  the  intimation  of  

dishonour,  the  appellant  issued  a  legal  notice  to  the  

respondents demanding payment.  As the respondents failed  

to pay, the appellant, not being in good health, executed a  

power of attorney dated 03/03/2004 authorising her husband  

Sudhir Gulvady to file and prosecute the complaint against  

the respondents.

5. On 03/03/2004 the appellant filed a complaint before  

the jurisdictional Magistrate against the respondents alleging  

offence  punishable  under  Section  138  of  the  NI  Act.  

Although, the complaint was signed by the appellant, it was  

presented before the Magistrate by the appellant’s husband  

Sudhir Gulvady on the strength of power of attorney.  It was  

stated  in  the  complaint  that  the  appellant  was  unable  to  

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come to the court as she was not keeping good health and,  

hence, she was being represented in the proceedings by her  

husband and power of attorney holder Sudhir Gulvady, who  

had personal knowledge of the entire transaction.  According  

to the appellant, the power of attorney was filed along with  

the complaint.  

6. On  05/03/2004  the  statement  of  the  appellant’s  

husband, who is her power of attorney holder was recorded.  

Cognizance  of  the  complaint  was  taken  and  summonses  

were issued to the respondents.  The respondents entered  

appearance  and  pleaded  not  guilty.   On  01/09/2005,  

20/09/2005,  22/02/2006,  16/03/2006  and  02/05/2006  the  

appellant was examined-in-chief and cross-examined by the  

respondents’  counsel.   Respondent  2  was  examined  and  

cross-examined on various dates.

7. In the written arguments submitted by the respondents,  

it  was contended that though the sworn statement of the  

power  of  attorney  holder  was  recorded,  he  was  not  

examined by the  complainant and since sworn statement of  

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the  complainant  was  not  recorded  complaint  was  not  

maintainable.   

8. On  09/11/2006  the  trial  court  convicted  the  

respondents of the offence punishable under Section 138 of  

the NI Act.  The respondents were sentenced to pay a fine of  

Rs.30,12,000/-  out  of  which  a  sum of  Rs.30,02,000/-  was  

directed to be paid to the appellant as compensation and  

balance of Rs.10,000/- was directed to be paid to the State.  

Respondent  2  was  sentenced  to  six  months’  simple  

imprisonment in the event of failure to pay the fine amount.  

9. The respondents filed an appeal in the Court of Principal  

City  and Sessions Judge,  Bangalore being Criminal  Appeal  

No.1897  of  2006.   On  17/09/2009  the  said  appeal  was  

rejected by the Fast Track Court-V, Bangalore.  

10. Aggrieved  by  the  order  of  Fast  Track  Court-V,  

Bangalore,  the  respondents  preferred  a  criminal  revision  

petition  in  the  Karnataka  High  Court.   By  the  impugned  

orders, the Karnataka High Court overturned the concurrent  

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judgments  of  the  courts  below  and  acquitted  the  

respondents only on the ground that the complaint had been  

presented  by  the  appellant’s  husband  as  her  power  of  

attorney holder but the power of attorney was not produced  

and that in strict compliance with Section 200 of the Code,  

the appellant must be examined before cognizance can be  

taken of the complaint, which was not done.   

11. We  have  heard  learned  counsel  for  the  parties  and  

perused their written submissions.  Learned counsel for the  

appellant  submitted  that  when  the  statement  of  the  

appellant was recorded on oath, the power of attorney was  

produced.  The High Court erroneously held that it was not  

produced.  It was part of the trial court’s record.  This is clear  

from  the  fact  that  it  bears  PCR  number  as  well  as  CC  

number.   Counsel  submitted  that  only  plea  raised  by  the  

respondents  before  the  courts  below  was  that  the  

appellant’s husband who is her power of attorney holder was  

not examined.  The respondents never raised any plea that  

the power of attorney was not produced.  Counsel submitted  

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that  reliance  of  Chandrashekarappa   v.  

Sharanabasappa1 is erroneous because it is contrary to the  

view taken by this Court in A.C. Narayanan  v.  State of   

Maharashtra2.  Counsel submitted that the submission that  

cheques were issued as a security has no basis.  They were  

issued  in  respect  of  a  crystallized  liability  and  this  was  

acknowledged  by  respondent  1  in  his  letters.   Counsel  

submitted  that  in  the  circumstances,  the  impugned  order  

deserves to be set aside.  

12. Learned  counsel  for  the  respondents,  on  the  other  

hand, submitted that the copy of power of attorney which is  

filed in this Court and which is certified by the High Court  

does not bear any exhibit numbers which proves that it was  

never filed before the trial court.  The statement of power of  

attorney holder establishes that the power of attorney was  

neither  filed  nor  exhibited.   Counsel  pointed  out  that  the  

sworn statement of the appellant is silent on the power of  

attorney.   Counsel  submitted  that  the  objection  qua  the  

1 2011 (1)  Kar. L.J. 444 2 AIR 2014 SC 630

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power of attorney was duly raised by the respondents before  

the trial court.  Pertinently the list of exhibited documents  

does not mention any power of attorney.  In this connection,  

counsel relied on  A.C. Narayanan.   He submitted that in  

this case, it is held by this Court that the power of attorney  

holder may file the complaint but the complainant ought to  

file  pre-summoning  evidence  affidavit  in  support  of  the  

complaint.   Since this is  not done,  the complaint must be  

dismissed on that ground.    Counsel further submitted that  

the  cheques  were  not  issued  in  discharge  of  legally  

recoverable debt.  Letters dated 1/10/2002 and 22/2/2003,  

exchanged  between  the  appellant  and  the  respondents  

mention that the cheques have been issued as security.  This  

is  reflected in the complaint and cross-examination of the  

complainant.   In  support  of  this  submission,  the  counsel  

relied on  M.S. Narayana Menon  v.  State of Kerala3,  

Sudhir Kumar Bhalla  v.  Jagdish Chand  4   and Kamala S.  

v.  Vidhyadharan5.

3 (2006) 6 SCC39 4 (2008) 7 SCC 137 5 (2007) 5 SCC 264

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13. We shall  first  deal  with  the  submission  that  copy  of  

power of attorney was not produced by the appellant.  We  

have carefully perused the written submissions filed by the  

respondents  in  the  trial  court.   This  submission  was  not  

raised and consequently not considered by the trial court.  In  

fact, since this submission pertains to documents produced  

in the trial court, it ought to have been raised there.  It could  

have been more appropriately dealt with by the trial court.  

But it was not raised.  The respondents filed appeal in the  

Sessions  Court.   In  the  appeal  memo,  no  contention  was  

raised that copy of power of attorney was not produced in  

the trial court.  Not only was this submission not raised in  

the appeal memo, it appears to have not been raised in the  

Sessions  Court  at  the  stage  of  arguments.   The  Sessions  

Court has, therefore, not dealt with it.  This submission was  

raised for the first time only in the High Court.  The fact that  

this submission was not raised in the trial court and in the  

lower appellate court weakens its force.  The High Court, in  

our opinion, erred in entertaining such a belated argument.  

Having entertained the argument, the High Court dealt with  

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it in a very perfunctory manner.  The High Court observed  

that Sudhir Gulvady, the power of attorney holder did not  

produce the power of attorney and, hence, he could not have  

been  examined  on  behalf  of  the  complainant.   The  High  

Court further observed that the complainant who examined  

herself also did not say why the power of attorney was not  

produced.   Significantly,  the  appellant  has  not  been  

questioned on this aspect.  Not even a suggestion was made  

to her that she had not given any power of attorney to her  

husband and that it was not produced on record.   

14. It was submitted by the counsel for the appellant that  

the  power  of  attorney  was  very  much  a  part  of  the  trial  

court’s record and, in fact, it bears the PCR number as well  

as the CC number,  which shows that it  was a part of the  

record.   A photocopy of  the said  power  of  attorney is  on  

record at Annexure-21 to the appeal memo.  A true typed  

copy thereof  is  also annexed to the present appeal.   It  is  

stated in the rejoinder filed by the appellant in this Court  

that the power of attorney was available on the record of the  

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High Court and a certified copy was issued by the High Court  

itself.  It is stated that a true copy of the certified copy has  

been  produced  as  Annexure  P-21  to  the  special  leave  

petition.  It is further stated that as a matter of practice, the  

power of attorney is filed along with the vakalat filed in the  

matter  and  not  with  the  list  of  documents  listing  other  

exhibits  pertaining  to  the  merits  of  the  case.   In  the  

circumstances, non-mentioning of the power of attorney is  

not unusual and on this basis, no conclusion can be drawn  

that the said document was not on record.  This assertion is  

not traversed by the respondents.  

15. The power  of  attorney  is  specifically  given  to  Sudhir  

Gulvady for court cases.  The relevant clauses of the said  

power of attorney read as under:

“1. To represent me before the said Court to all   intents and purposes in connection with the   said  criminal  case  to  be  filed,  prosecuted   before the Criminal Court under Section 138  of the Negotiable Instruments Act.

2. And to appear for and prosecute and defend  all  actions  and  proceedings,  to  sign  and   verify  all  plaints,  written  statements  and  other  pleadings,  applications,  petitions  or   

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documents to the court, to deposit, withdraw  and  receive  documents  and  any  money  or   moneys from the court or from the opposite   party,  either  in  execution  of  the  decree  or   otherwise  and,  on  receipt  of  payment   thereof,  to  sign and deliver  proper  receipts   and  discharge  the  same  for  and  on  my  behalf.

3. To  engage  and  appoint  any  solicitor,   advocate or advocates or counsel to act and  plead and otherwise conduct  the  said  case   whenever my said attorney thinks proper to   do so.”

16. Having perused the copy of the power of attorney, we  

are satisfied about its authenticity.  We view this power of  

attorney in light of the statement made by the appellant in  

the complaint that because she was not keeping good health  

and was unable to come to the court and because the whole  

transaction was within the knowledge of her husband, who is  

her power of attorney holder, her husband represented her.  

We  have  no  reason  to  doubt  the  submission  of  learned  

counsel for the  appellant  that  it   was  very  much  on  

record.   In any case, the fact that this submission which is  

factual in nature  was   first time  raised in the High Court  

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casts a shadow of doubt on its truthfulness.  We reject this  

submission.  

17. The second submission of the respondents is that the  

complaint  cannot  be  filed  by  a  power  of  attorney  holder.  

This question is no more res integra.  A Division Bench of this  

Court  while  considering  a  criminal  appeal  arising  out  of  

conviction under Section 138 of the NI Act noticed diversion  

of  opinion  between  different  High  Courts  on  the  question  

whether the eligibility criteria prescribed by Section 142(a)  

of the NI Act would stand satisfied if the complaint itself is  

filed  in  the  name of  the  payee  or  the  holder  in  the  due  

course of the cheque and/or whether the complaint has to be  

presented before the Court by the payee or the holder of the  

cheques himself.  The Division Bench felt that another issue  

which  would  arise  for  consideration  is  whether  the  payee  

must examine himself in support of the complaint keeping in  

view the insertion of Section 145 in the NI Act (Act No.5 of  

2002).  The Division Bench was of the view that the matter  

should be considered by a larger Bench so that there can be  

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authoritative  pronouncement  of  this  Court  on  the  above  

issues.  In  A.C. Narayanan, the three-Judge Bench of this  

Court  dealt  with  this  reference.   This  Court  noted  the  

questions  which  had  to  be  decided  by  it  in  terms  of  the  

reference order as under:  

“(i) Whether a Power of Attorney holder can sign   and  file  a  complaint  petition  on  behalf  of  the   complainant?/  Whether  the  eligibility  criteria   prescribed by Section 142(a) of NI Act would stand  satisfied if the complaint petition itself is filed in   the name of the payee or the holder in due course   of the cheque?

(ii) Whether a Power of Attorney holder can be  verified on oath under Section 200 of the Code?  

(iii) Whether  specific  averments  as  to  the  knowledge of the Power of Attorney holder in the   impugned transaction must be explicitly asserted   in the complaint?

(iv) If the Power of Attorney holder fails to assert   explicitly his knowledge in the complaint then can   the Power of Attorney holder verify the complaint   on oath on such presumption of knowledge?

(v) Whether  the  proceedings  contemplated  under Section 200 of the Code can be dispensed   with  in  the  light  of  Section  145  of  the  N.I.  Act   which  was  introduced  by  an  amendment  in  the   year 2002?”

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18. After considering the relevant provisions of the NI Act  

and the relevant judgments on the point, this Court clarified  

the  legal  position  and  answered  the  questions  in  the  

following manner.  

“(i) Filing of complaint petition under Section 138  of  NI  Act through power of attorney is  perfectly   legal and competent.

(ii) The Power of Attorney holder can depose and   verify on oath before the Court in order to prove   the contents of the complaint. However, the power   of  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.

(iii) It  is  required  by  the  complainant  to  make  specific  assertion  as  to  the  knowledge  of  the   power of attorney holder in the said transaction   explicitly  in  the  complaint  and  the  power  of   attorney holder who has no knowledge regarding  the transactions cannot be examined as a witness   in the case.

(iv) In the light of section 145 of NI Act, it is open   to the Magistrate to rely upon the verification in   the form of affidavit  filed by the complainant in   support of the complaint under Section 138 of the   NI Act and the Magistrate is neither mandatorily   obliged  to  call  upon  the  complainant  to  remain   present  before  the  Court,  nor  to  examine  the  

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complainant or  his witness upon oath for  taking   the decision whether or  not to issue process on   the complaint under Section 138 of the NI Act.  

(v) The  functions  under  the  general  power  of   attorney cannot be delegated to another person   without specific clause permitting the same in the   power  of  attorney.  Nevertheless,  the  general   power of attorney itself can be cancelled and be   given to another person.”

19. Thus, it is clear that the complaint under Section 138 of  

the NI Act can be filed through the power of attorney holder.  

In this case, Sudhir Gulvady is the power of attorney holder  

of the appellant and he has filed the complaint on her behalf.  

The learned Magistrate recorded the statement of the power  

of  attorney  holder  under  Section  200  of  the  Code  on  

5/3/2004 and issued summons.  We have perused the said  

statement.  It is signed by the power of attorney holder and  

by learned Magistrate.  A.C. Narayanan states that power  

of attorney holder must have knowledge about the relevant  

transactions.  There can be no dispute about the fact that in  

this case, the power of attorney holder being the husband of  

the  appellant  has  witnessed  all  transactions  and  he  

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possesses due knowledge about them.  He is associated with  

all  transactions  at  all  crucial  stages.   The  appellant  has  

placed  this  fact  in  the  forefront  in  her  complaint.   The  

relevant paragraph of the complaint reads as under:  

“3. The complainant is represented by her Power   of  Attorney  Holder  Mr.  Sudhir  Gulvady,  her   husband as the complainant is unable to come to   the Court due to her not keeping good health and  the whole transaction is also within the knowledge  of  her  Power  of  Attorney  holder  who  is  her   husband”.

20. The appellant  has  examined herself  on oath.   In  her  

evidence, she has stated that the office of the respondents is  

in the same building in which her husband’s office is situated  

and her husband being acquainted with respondent 2, who is  

the Managing Director of respondent 1, he was aware that  

respondent 2 was functioning as a broker and, hence, she  

along  with  her  husband  had  initial  discussion  with  

respondent 2 for transactions in 10000 shares.  Her evidence  

substantiates  her  case  that  her  husband  had  knowledge  

about the entire transaction.  Hence, the submission that the  

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complaint  could  not  have  been  filed  through  power  of  

attorney holder must fail.  

21. It is then submitted that the pre-summoning evidence  

of power of attorney holder should have been filed.  We have  

no hesitation in rejecting this submission.  We have already  

reproduced  the  relevant  paragraph  of  the  appellant’s  

evidence where she has stated that due to her ill-health, she  

was unable to come to the court, hence, the complaint was  

being  filed  by  her  power  of  attorney  holder  who  had  

knowledge  of  the  transactions.   The  power  of  attorney  

holder’s sworn statement was recorded and summons was  

issued.  This exercise cannot be faulted and is in complete  

accord  with  Section 200 of  the  Code.   At  that  stage,  the  

power of attorney holder had stepped in the shoes of the  

appellant.   Otherwise, there was no point in the appellant  

giving power of attorney to her husband.  A.C. Narayanan  

nowhere  states  that  if  the  complaint  is  filed  by  the  

complainant  through  power  of  attorney  holder,  the  

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complainant must file affidavit in support of the complaint  

prior to issuance of summons.  

22. It is pertinent to note that in this case, the appellant  

has  examined  herself  as  PW-1  and  subjected  herself  to  

cross-examination.  In the facts of this case, where the sworn  

statement of her power of attorney holder is recorded at the  

pre-summoning stage, the argument that she should have  

also filed a pre-summoning affidavit cannot be entertained.  

In  this  connection,  we may refer  to  the  judgment  of  this  

Court in  Indian Bank Association & Ors.  v.  Union of   

India & Ors.6 where this Court has given a direction to the  

Metropolitan  Magistrate/Judicial  Magistrate  to  adopt  a  

pragmatic and realistic approach while issuing summons.  It  

is also urged that the power of attorney holder should have  

also been examined on oath.  This submission must also be  

rejected as apart from being devoid of substance it is clearly  

aimed at frustrating the prosecution.  When the complainant  

herself has stepped in the witness box, we do not see the  

6 (2014) 5 SCC 590

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need for the power of attorney holder to examine himself as  

a witness.  Law cannot be reduced to such absurdity.  The  

purport  of  NI  Act  will  be  frustrated  if  such  approach  is  

adopted by the courts.  We, therefore, reject this submission.  

23. Lastly it was urged that the cheques in question were  

not  given for  any legally  recoverable  dues.   The cheques  

were given as a security.   The trial court has considered this  

plea and rejected it.   This  submission was also  advanced  

before the lower appellate court.  But it was rejected by it.  

The High Court has, however, not dealt with this submission  

at  all  though  it  was  raised  in  the  appeal  memo.   In  this  

connection,  we  may  reproduce  relevant  portion  of  letter  

dated  30/6/2003  addressed  by  the  respondents  to  the  

appellant.

“This is further to our letter dated 22/2/2003,   I had sought time till 30th June 2003 to return the  balance  of  7500  shares  of  Hindustan  Lever   Limited.  However, despite my best efforts I was  not in a position to return the shares.  

I  would  earnestly  request  you to  bear  with   me and allow me to fulfill my commitment to you.   I would once again assure you that the full lot of   

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shares  due  to  you  would  be  credited  to  your   account and also the amounts due to you paid in   full.   As  put  forth  before  you  personally,  I  am  making every effort to set right the problems that   had  occurred  in  my  business.   This  has  taken   longer than expected.  

I would be most grateful if you can consider   granting me time till 31st December 2003 to return  the 7500 shares to you.  I would in the meantime  ensure  that  smaller  lots  are  credited  to  your   account.  

I  am  replacing  the  cheques  issued  to  you  earlier by the following instruments:

a) Cheque No.392942 dt. 1.8.2003 Rs.850,000.00

b) Cheque No.392943 dt. 1.8.2003 Rs.972,000.00

If I fail to return the shares by 31st December,  2003, I  agree to your depositing the cheques to   recover your dues.  

In  the  case  of  any  eventualities  to  you,  I   agree to return these shares to your husband Mr.   Sudhir  Gulvady  or  your  children  Ms.  Aparna  Gulvady and/or  Mr.  Gautam Gulvady.   I  request   you  to  kindly  return  the  cheques  issued  to  you   earlier.”

24. On the basis of the averments made in the complaint  

and  on  the  basis  of  the  above  letter,  it  is  contended  by  

learned counsel for the respondents that the above cheques  

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were  issued  as  a  security;  that  there  was  no  crystallized  

liability or outstanding dues and that there was no legally  

recoverable  debt  and,  therefore,  the  complaint  was  not  

tenable.  On the other hand, it is strenuously contended by  

the counsel for the appellant that it is abundantly clear from  

the  above  letter  that  the  cheques  were  issued  for  a  

crystallized liability or a legally recoverable debt.  Since the  

High Court has not dealt with this submission at all, we deem  

it appropriate to remand the matter to the High Court for  

that purpose.  Hence, while holding in favour of the appellant  

that the complaint can be filed by a power of attorney holder  

and  on  that  ground  complaint  cannot  be  held  not  

maintainable and that the power of attorney was very much  

on record, we remand the matter to the High Court with a  

request  that  the  High  Court  should  hear  both  sides  and  

decide whether the cheques in question were issued as a  

security  or  for  the  purpose  of  repayment  of  legally  

recoverable debt.  Considering the fact that the complaint is  

dated 03/03/2004, we request the High Court to decide the  

above question as early as possible and preferably within a  

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period of eight months from the date of receipt of our order  

by it.  We make it clear that the remand is only limited to the  

abovestated question and the scope of remand shall not be  

extended any further as we have already answered the other  

questions which were raised before us.   

25. The appeals are disposed of in the aforestated terms.  

……………………………………………..J. (RANJANA PRAKASH DESAI)

……………………………………………..J. (N.V. RAMANA)

New Delhi; September 17, 2014.

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