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srikanth kumar bandari (advocate)     30 April 2010

cheque bounce case original gpa inturn given gpa to employee

hello legal experts, i got a case where a finance company given GPA  to its M.D. and the said M.D. inturn sub-delegated his powers as GPA to one of its employee to file complaint, depose, engage advocate etc., u/s 138 of N.I.ACT.  so my question is whether a GPA Holder of a company  can he inturn sub-delegate his powers and give GPA to one of its employee, is the complaint maintainable. Complaint is signed by subsequent GPA holder, but the principal GPA holder. how far case of 138 of N.I.Act is maintainable. please clarify.

please provide me any authorities/citations where a complaint is not maintainable where GPA Holder sub-delegating his powers to another GPA Holder.

can a quash petition be filed basing on some of the above mentioned contents.


 8 Replies

G.Padmanabhan (Advocate)     01 May 2010

Dear Mr.Bandari, I have not come across a case wherein the legality of sub-delegation by a delegate has been called in question. Should you happen to stumble upon one, please give citation details. The leading case on the question of POA in 138 NIA matters is MMTC's case. You may refer to that decision for structuring your case. Citation AIR 2002 SC 182

Hemant Agarwal ( Mumbai : 9820174108)     01 May 2010


1.  ONLY the first rightful owner, may delegate his representing authority via a POA to another Indian Citizen person (say Mr. xyz),  for performance of obligations pertaining to the first rightful owner.


2.  POA holder,  is only a legal representative  AND NOT THE FIRST RIGHTFUL OWNER,  and the POA  holder may never further re-delegate his representative authority.  It would be "null & void".


3.  UNLESS,  of course,  the POA holder, by virtue of his POA authority, takes-over or say transfers the  "rightful ownership" of the issue (what-so-ever it may be) on to himself  AND THEN ONLY,  he may again give out a new POA to another new person (say Mr. Alex)


4.  IF  orginal POA holder (Mr. xyz) delegates his POA authority to a second POA holder (Mr. Alex),  THEN it would mean that the original rightful owner has given POA to Mr. Alex  AND NOT TO Mr. xyz.    Here Mr. Alex (second POA holder)  could be actually an enemy of the first rightful owner and the rightful owner may never be intending to give POA to Mr. Alex.


5.  Typically, a POA, is made & given based on the opposite persons Trust capacity and Good-Will.   Here the owner may be trusting and having good-faith in Mr. xyz (first POA holder),  BUT  he may not be having any (whatsoever)  trust or good-faith on Mr. Alex (second POA holder).  POA cannot be delegated / given to multiple persons for the same issues/obligations.  It would be contradictory and will be conflicting of representative powers between POA holders.


6.  The Trust & Good-Will / faith, always pertains to  acts of Debts & Liabilities, Movable & Immovable assets, besides other categories of interests of the original rightful owner, for which the rightful owner may issue a POA.


7.  The rightful owner has all the powers to withdraw the  POA given to Mr. xyz.  BUT will not be able to withdraw the POA authority re-delegated to Mr. Alex (second POA holder) by first POA holder.


By the above logic,  POA powers cannot be delegated indefinitely or to multiple persons or for un-specified activities.


Personally, I hope that the Prime Minister, delegates his authority to me via a POA, for the true upliftment of our country.


Keep Smiling .... Hemant Agarwal

Dharmesh Manjeshwar (Advocate/Lawyer)     01 May 2010

Some POA's have the below clause ----

         To appoint and substitute Attorney/s from time to time with the same powers or limited powers at pleasure and to delegate/s the powers by virtue of these presents.

If this power is given ... then I don't find anything wrong if the attorney holder delegates his powers to someone else vide a writing ...

But here again the catch is .... such delegated person can only file the case and for evidence the MD will have to depose before the court.

Rakesh Shekhawat (Advocate)     01 May 2010

Here is a citation about sub  delegation the authority in favour of another person for filing the suit.

2002(3) Civil Court Cases 146 (P&H)
Jasbir Singh Vs Ajit Singh
Attorney - Appointed to institute suit - Attorney further appointed another person to institute the suit - Held, constituted attorney cannot further sub - delegate the authority in favour of another person for filing the suit

Rakesh Shekhawat (Advocate)     01 May 2010

But here is another view by Kerla High Court in complaint u/s 138 N.I. Act

AIR 2007 (DOC) 207

Negotiable Instruments Act (26 of 1881) - S. 138 – Companies Act (1 of 1956) S. 289 – Cheque dishonour complaint – Locus standi of representative of complainant company – Resolution passed by the company authorised its Executive Director to represent the company in all its legal action - Said Executive Director executed authorisation in favour of sub-delegate to represent and depose on behalf of company – Complaint also indicating substitution of sub-delegate in place of Executive Director – Sub delegate has all authority to represent the company not only based on the submission made on behalf of the company but also because of the order passed by the court below substituting the incorporeal person, sub-delegate to represent the company and thus to depose on its behalf.

kranthi kiran (Works In Judicial Department)     02 May 2010

In the deed of  GPA, if the Principal permits the GPA holder to appoint or delgate his powers to a sub-attorney then it is maintainable.

Hemant Agarwal ( Mumbai : 9820174108)     03 May 2010

1.    The executive director derives his powers under the Companies Act,   these specific powers which can be delegated to him,  BUT ONLY  after a valid company resolution, as prescribed under the Companies Act.


A Company Resolution  IS IN NO WAY AS EQUIVALENT TO A  "POA"


2.  Under the Companies Act,  the heirarchy control or say delegation of representing authority, is possible to successively subordinate grades (as many on-duty persons), via a company resolution,   BUT NEVER VIA A   "POA".     


HERE, it is the company (as an entity & not as a person)   who is delegating AND / OR  re-delegating authority to a number of personsAND it can never be construed that a Director (in his personal capacity)  is the authority who is re-delegating representing powers to successively subordinate grades (to many different persons)


3.  Under the companies act, there is no provision to delegate powers via a POA  or say in other words there is no such thing as   "POA"  prescribed under the Co. Act.


HERE,  delegating representation powers can be done ONLY to   "ON-DUTY or  on-service"  persons connected to the Company.  For other people (non-employees)  like  Consultants, Vendors, Retainers, contractors etc.....,  the company is empowered to execute an agreement / contract / deed /  MOU etc....   BUT NEVER AN  "POA".


4.  Individual person do not have jurisdiction to pass resolutions under any act to delegate representing powers.    Hence the option available to individuals is to delegate representing powers is only via a  "POA"   and not otherwise.


5.   POA powers cannot be delegated indefinitely or to multiple persons or for un-specified activities.  Hence POA  cannot be further  re-delegated to sub-attorney's or sub-sub-attorneys or sub-sub-sub-attorneys or sub..............


Keep Smiling .... Hemant Agarwal




In companies case , the company can authorise any body but not by this procedure of redelation by POA holder.

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