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2018 (7) TMI 2201 - HC - Indian LawsDishonor of cheque - insufficiency of funds - legality of summon - Whether in the absence of the company as a party to the complaint the authorized signatory of the company can be summoned under section 138 N.I. Act or not? - HELD THAT - The complaint filed under section 138 N.I. Act in respect of an offence committed by a company i.e. where the cheque is issued on behalf of the company would not be maintainable if the company on whose behalf the cheque has been issued is not impleaded as an accused/opposite party in the complaint. Admittedly in the complaint filed by opposite party no. 2 before the court below the company namely M/s. Usher Agro Limited was not impleaded as a party to the complaint. Whether the failure on the part of the complainant to implead the company as an accused/opposite party in the complaint is fatal and incurable? - HELD THAT - In the present case the Court finds that the complaint was filed on 30.5.2016. The summoning order was passed on 28.6.2016 the application for impleadment and to summon the additional accused was filed on 23.9.2016 which was allowed on 10.4.2017. Therefore upto this stage the Magistrate has not applied his mind to the contents of the complaint. Therefore the order dated 10.4.2017 passed by the Magistrate cannot be said to be illegal - there is no iota of doubt that in a case under section 138 of the N.I. Act if the company on whose behalf the disputed cheque was issued was not impleaded can be subsequently impleaded. However the only rider to the aforesaid proposition is that the material particulars in respect of the same should be present in the complaint filed under section 138 of the N.I. Act or else the same being barred by limitation cannot be permitted at a belated stage. In the present case the complaint was filed on 20.4.2016 and the application to summon the company as an additional accused was filed on 23.9.2016. The omission to implead the company as an accused/opposite party was not such an infirmity which could not have been allowed to be cured as all material particulars necessary for implicating the company as an accused were already pleaded in the complaint dated 20.4.2016. Therefore there is no illegality was committed by the Court below in passing the order dated 10.4.2017 on the application dated 23.9.2016 filed by the complainant for summoning the company as an accused. Whether the company namely M/s. Usher Agro Ltd. Could have been summoned under section 319 Cr.P.C. even when no evidence had been recorded by the court concerned? - HELD THAT - In addition to the aforesaid an ancillary question shall also arise as to whether the Court below could have summoned the applicant M/s. Usher Agro Ltd even when the scope of section 319 Cr.P.C. is limited only to post cognizance stage when complicity of person other than those named as an offender comes to light from the evidence recorded in the course of enquiry or trial - there is no provision in the N.I. Act or the Code of Criminal Procedure which prohibits the impleadment of a party to the complaint as an additional accused/opposite party. Similarly there is no provision either under the N.I. Act or the Code of Criminal Procedure providing for impleadment of a person as an accused/opposite party in a complaint. The application filled by the applicants for taking cognizance against applicant No. 2 company comes under the purview of Section 190(1) (a) Cr.P.C. because the name of the applicant No. 2/company as an accused and the basis of its accusation were already mentioned in the complaint at the time of its filling. It is the fault of the trial Court which summoned the Director alone and left the company. Such defect is not an incurable defect and can be cured by the trial Court at any time. There is no bar under Section 190 Cr.P.C. that once the process is issued against some accused on the next date the Magistrate cannot issue process to some other person against whom there is some material on record. Petition dismissed.
Issues Involved:
1. Whether the company is a necessary and proper party in a complaint under Section 138 N.I. Act. 2. Whether failure to implead the company as an accused is fatal and incurable. 3. Whether the court can summon additional accused in the absence of specific provisions in the N.I. Act or Cr.P.C. 4. Whether summoning of a non-applicant as an accused can be done only after the court has recorded evidence. Detailed Analysis: Issue 1: Whether the company is a necessary and proper party in a complaint under Section 138 N.I. Act. The court held that for maintaining a prosecution under Section 141 of the N.I. Act, arraigning the company as an accused is imperative. The other categories of offenders can only be brought in on the touchstone of vicarious liability as stipulated in the provision itself. This conclusion was drawn from the judgment in Aneeta Hada Vs. Godfather Travels & Tours Pvt. Ltd., which emphasized that the commission of an offence by the company is a condition precedent to attract the vicarious liability of others. Therefore, a complaint filed under Section 138 N.I. Act, in respect of an offence committed by a company, would not be maintainable if the company is not impleaded as an accused. Issue 2: Whether failure to implead the company as an accused is fatal and incurable. The court referred to the judgment in Manish Kalani and another Vs. Housing and Urban Development Corporation Ltd. (HUDCO) and another, which allowed the amendment of a complaint to include the company as an accused if material particulars are present in the original complaint. The court noted that the complaint had mentioned that the cheque was issued by the accused as the authorized signatory of the company. Thus, the failure to mention the company's name as an accused in the title of the complaint was not fatal. The court also cited S.R. Sukumar vs. S. Sunaad Raghuram, which allowed amendments to complaints before cognizance is taken. Issue 3: Whether the court can summon additional accused in the absence of specific provisions in the N.I. Act or Cr.P.C. The court found that there is no specific prohibition in the N.I. Act or the Code of Criminal Procedure against the amendment of a complaint or the impleadment of an additional accused. Thus, the court held that the Magistrate did not commit any illegality in summoning the company as an additional accused pursuant to the order dated 10.04.2017, passed on the application dated 23.09.2016, purported to be under Section 319 Cr.P.C. Issue 4: Whether summoning of a non-applicant as an accused can be done only after the court has recorded evidence. The court clarified that Section 319 Cr.P.C. would operate in situations where, during the trial or enquiry, it appears to the trial court that some other persons are also involved in the commission of the offence. However, in this case, the court found that the name of the company and the basis of its accusation were already mentioned in the complaint at the time of its filing. Therefore, the application for taking cognizance against the company came under the purview of Section 190(1)(a) Cr.P.C. The court concluded that the defect of not summoning the company initially was curable and that the Magistrate was within his jurisdiction to summon the company subsequently. Conclusion: The court dismissed both criminal misc. applications, finding no cogent reason to dislodge the proceedings of Complaint Case No. 1221 of 2016. The court also directed the lower court to expedite the hearing of the complaint case, emphasizing the mandate of the N.I. Act to conclude proceedings within six months.
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