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TMI Blog2017 (4) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... he known accused, if the evidence led in trial discloses offences committed by other persons who could be tried along with the accused, then there need not be a fresh complaint and fresh order of cognizance against those persons. Also reiterate that the complaint was liable to be dismissed on the very first day of its presentation and no process could have been issued against the partners in the absence of the partnership firm. - CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE FIR/ORDER) NO. 29748 of 2016 With CRIMINAL MISC.APPLICATION NO. 29751 of 2016 - - - Dated:- 11-4-2017 - MR. J.B.PARDIWALA, J. FOR THE APPELLANT : MR ASIFKHAN I PATHAN, ADVOCATE FOR THE RESPONDENT : MR.HARDIK B SHAH, ADVOCATE, MS. PATHAK, APP in CR.MA29748 OF 2016 AND MS. THAKORE, APP in CR.MA 29751 OF 2016 COMMON ORAL JUDGMENT 1. Since a common question of law has been raised in both the captioned applications and the parties are also the same, those were heard analogously and are being disposed of by this common judgment and order. 2. By these two applications under section 482 of the Code of Criminal Procedure, 1973, the applicant seeks to invoke the inherent powers of this Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provision of this Act, be punished with imprisonment for a [a term which may be extended to two years], or with fine which may extend to twice the amount of the cheque, or with both : Provided that nothing contained in this section shall apply unless- (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, b [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice. Explanation.- For the purposes of this section, debt or other liability means a legally enforc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fies the Court that he had sufficient cause for not making a complaint within such period. 39 Limitation under the Section is, however, provided only for filing the complaint and not for taking cognizance or even for issuing the process. The thrust is only on making the complaint meaning thereby presenting it to the Magistrate. The concept of its cognizance or the concept of issuance of process on the basis of such complaint is simply not to be found in the whole section. It is clear that once the complaint is filed within time contemplated under Section 142(b), the cognizance could be taken later. 40 In the case in hand, it is not in dispute that the complaint was filed without arraigning the partnership firm being a legal entity as an accused. It is not in dispute that the Magistrate took cognizance upon the complaint in the absence of the legal entity being the principal accused and thought fit to issue process against the Directors by virtue of their vicarious liabilities under Section 141 of the Act. 41 The following are the questions I need to look into: (I) Whether the complaint under Section 138 of the Act the day it was filed was maintainable in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trial of, the offence which he appears to have committed. (4) Where the Court proceeds against any person under sub-section (1), then- (a) the proceedings in respect of such person shall be commenced afresh, and the witnesses re-heard; (b) subject to the provisions of clause (a), the case may proceed as if such person had been an accused person when the Court took cognizance of the offence upon which the inquiry or trial was commenced. 44 The objects and reasons of Section 319 of the Cr.P.C. are as under: The Law Commission in its 41st Report observed :- 24.80. It happens sometimes, though not very often, that a Magistrate hearing a case against certain accused finds from the evidence that some person, other than the accused before him, is also concerned in that very offence or in a connected offence. It is only proper that a Magistrate should have the power to call and join him in the proceedings. Section 351 provides for such a situation, but only if that person happens to be attending the Court. He can then be detained and proceeded against. There is no express provision in S. 351 for summoning such a person if he is not present in Court. Suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used.It naturally deals with a matter arising from the course of the proceeding already initiated. The scope of the section is wide enough to include cases instituted on private complaint. 46 It is therefore abundantly clear that the object of the makers of the statute in enacting Section 319 of the Code was to provide for a more comprehensive provision, with considerable improvement in the old Section 351, for proceeding against other persons appearing to be guilty, although he is not an accused. Section 319 of the Code provides that where in the course of an enquiry or trial of an offence, if it appears from the evidence that any person not being accused has committed any offence, Court may proceed against such person for the offence which he appears to have committed. The intention of the Legislature in enacting Section 319 appears to be that if somebody other than the person who is party and facing trial or enquiry is also an accused, he may be summoned on the basis of some evidence available on the record. 47 Thus, having regard to the substantive provision of Section 319 of the Cr.P.C. read in conjunction with the objectives and reasons, Section 319 of the Cr.P.C. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Procedure on the very first day of its prosecution before the learned Magistrate. The maintainability of the complaint is sought to be saved by virtue of Section 319 of the Cr.P.C. 52 It is a settled legal proposition that if initial action is not in consonance with law, all subsequent and consequential proceedings would fall through for the reason that illegality strikes at the root of the order. In such a fact-situation, the legal maxim sublato fundamento cadit opus meaning thereby that foundation being removed, structure/work falls, comes into play and applies on all scores in the present case. 53 In Badrinath v. State of Tamil Nadu and Ors. [AIR 2000 SC 3243]; and State of Kerala v. Puthenkavu N.S.S. Karayogam and Anr., [(2001) 10 SCC 191] , the Supreme Court observed that once the basis of a proceeding is gone, all consequential acts, actions, orders would fall to the ground automatically and this principle is applicable to judicial, quasi-judicial and administrative proceedings equally. 54 Similarly in Mangal Prasad Tamoli (dead) by L.Rs. v. Narvadeshwar Mishra (dead) by L.Rs. and Ors., [(2005) 3 SCC 422 : (AIR 2005 SC 1964)] , the Supreme Court held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... para 2 of the complaint so as to make the controlling company of the industrial unit figure as the concerned accused in the complaint. All that has to be done is the making of a formal application for amendment by the appellant for leave to amend by substituting the name of Modi Industries Limited, the company owning the industrial unit, in place of Modi Distillery . Furthermore, the legal infirmity is of such a nature which could be easily cured... 18. What is discernible from the U.P. Pollution Control Boards case is that easily curable legal infirmity could be cured by means of a formal application for amendment. If the amendment sought to be made relates to a simple infirmity which is curable by means of a formal amendment and by allowing such amendment, no prejudice could be caused to the other side, notwithstanding the fact that there is no enabling provision in the Code for entertaining such amendment, the Court may permit such an amendment to be made. On the contrary, if the amendment sought to be made in the complaint does not relate either to a curable infirmity or the same cannot be corrected by a formal amendment or if there is likelihood of prejudice to the othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court that prosecution against him is not maintainable as the firm which drew the cheques was not made an accused in the complaints. On November 6, 1992, the complainant filed a petition in each case praying for impleading the firm as additional accused. Though the petitions were stoutly resisted, the Chief Judicial Magistrate before whom the complaints were filed, allowed the petitions by the impugned order. 2. Two main contentions have been advanced by learned counsel for quashing the order. The first is that since there is no provision in the Act for impleading a new accused in the case, the court cannot have recourse to the general provisions contained in the Code of Criminal Procedure, 1973 (for short the Code ). Even otherwise Section 142 of the Act makes it clear that the prosecution proceedings contemplated therein are either untrammelled or unaided by anything contained in the Code, contended counsel. The second contention is that the court is debarred from taking cognizance of the offence against the firm after the expiry of the period of one month from the date of cause of action envisaged in Clause (c) of Section 138 of the Act, and hence the firm cannot be impl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... once he comes to the conclusion that apart from the persons sent up by the police some other persons are involved, it is his duty to proceed against those persons. A Division Bench of this court has followed the said legal position in Asokan v. Narayonan [1972] KLT 728. Subsequently, the Supreme Court reiterated it in Hareram v. Tikaram, AIR 1978 SC 1568. 6. Thus, the legal position is, when once cognizance of the offence was taken, subsequent impleadment of any other person as accused would not affect the judicial process already adopted in taking cognizance of the offence. 7. In the aforesaid context, a reference to Section 319 of the Code, is necessary. Under Sub-section (1), the court is given power to proceed against any other person who appears to have committed any offence for which such person could be tried together with the accused already arraigned in the case. Once the court decides to proceed against such other person then Sub-section (4) will save the earlier act of taking cognizance of the offence. Subsection (4) says that the case may proceed as if such person had een an accused person when the court took cognizance of the offence upon which the inqui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as altogether different. The law was that even in the absence of a firm, the partner of the firm could be prosecuted. This proposition of law is no longer good after the pronouncement of the Supreme Court in the case of Aneeta Hada (supra), which I have discussed at length while answering the second question. When the cognizance itself is bad, would the position be saved by virtue of Section 319 (4)(b) of the Code. 61 As observed by the Supreme Court in State of Orissa vs. Sudhansu Sekhar Misra (AIR 1968 SC 647 vide para 13) : A decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in it. On this topic this is what Earl of Halsbury, LC said in Quinn v. Leathem, 1901 AC 495: Now before discussing the case of allen v. Floo (1989) A 1 and what was decided therein, there are two observations of a general character which I wish to make, and one is to repeat what I have very often said before, that every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that what object the Legislature has made on such a deeming fiction. 67 The word deemed is used in various senses. Sometimes, it means generally regarded. At other time, it signifies 'taken prima facie to be', while in other case, it means, 'taken conclusively'. Its various meanings are, - 'to deem' is 'to hold in belief, estimation or opinion'; to judge; adjudge; decide; considered to be; to have or to be of an opinion; to esteem; to suppose, to think, decide or believe on considerations; to account, to regard; to adjudge or decide; to conclude upon consideration. (see Major Law Lexicon by P.Ramanatha Aiyar, 4th Edition 2010 Vol.2) 68 In this connection, I deem it necessary to consider few precedents on the true meaning of the word 'deemed' and 'deeming fiction'. 69 In Consolidated Coffee Ltd. v/s. Coffee Board, Bangalore, reported in AIR 1980 SC 1468 , the purpose of the word 'deemed' occurring in Section 5(3) of the Central Sales Tax Act, 1956 came for consideration. The issue that emanated was whether a legal fiction had been created by use of the word 'deemed'. It is fruitful to reproduce what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose for which it is created, or beyond the language of the Section by which it is created... 71 From the aforesaid pronouncements, the principle discernible is that, it is the bounden duty of the court to ascertain for what purpose the legal fiction has been created. It is also the duty of the Court to imagine the fiction with all real consequences and instances unless prohibited from doing so. That apart, the use of the term deemed has to be read in its context and further the fullest logical purpose and import are to be understood. It is because in modern legislation, the term deemed has been used for manifold purposes. The object of the Legislature has to be kept in mind. (See Andaleeb Sehgal v/s. Union of India and another, AIR 2011 Delhi 29(FB) ). 72 I am of the view that by virtue of a legal fiction, it cannot be said that on the date of filing of the complaint, the Court was justified in taking cognizance and issue process against the partners in the absence of the legal entity and no fault could be found so far as the legality and validity of the cognizance is concerned. The legal fiction is altogether for a different purpose and it should not be brought in ai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings under Section 319 of the Code of Criminal Procedure, and, therefore, now he may be permitted to implead the company also as one of the accused and if the company is brought on record, the present infirmity gets cured, and, therefore, the prosecution cannot be quashed. Section 319 of the Code of Criminal Procedure, no doubt permits for impleading another accused in the course of the enquiry or trial when it appeared from the evidence that another person also has committed offence and he also should be tried together with the other accused. Learned counsel for the respondent relies upon the decision in U.P. Pollution Control Board v. Modi Distillery [1988] 63 Comp Cas 77; AIR 1988 SC 1123, in support of his argument. The decision cited above is about the right of the complainant to set right the technical flaw by amending the complaint. But learned senior counsel for the petitioner, Mr. N. T. Vanamamalai, would contend that that was a case in which the company also was impleaded as a party, but the company was wrongly described as the industrial unit, wilfully failed to furnish the requisite information to the complainant therein, and, therefore, the amendment was permitted. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the infirmity in the proceedings but only to bring all the culprits before the court when their role in the commission of the offence was brought to light only after the evidence before court. Such is not the position in this case. The respondent had deliberately omitted to implead the company in the complaint though Section 141 of the Negotiable Instruments Act, 1881, emphasizes that the company also shall be an accused. When the proceedings has legal infirmity in its initiation itself, the respondent is not entitled to invoke Section 319 of the Code of Criminal Procedure because on the date of the complaint, it was not maintainable against the petitioner. Therefore, accepting the contention of the learned senior counsel, Mr. N. T. Vanamamalai, the proceedings against the petitioner have to be quashed. The view taken by the learned Single Judge of the Madras High Court is quite commendable, and I propose to adopt the same line of reasoning. 75 Suryanarayan (supra) later came to be followed by the Madras High Court in the case of Anandan v. Arivazhagan [1999 (96) Company case 503] . A learned Single Judge observed in paras 7, 8 and 9 as under: 7. It is not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustainable against the directors of a company without impleading the company itself. As a matter of fact, this court has considered the views taken by the Kerala High Court in Alex v. Vijayan [1994] 81 Comp Cas 910; [1993] MWN 192, which were followed in the later decision in M.O.H. Iqbal v. Utharnan (M) [1995] 82 Comp Cas 726 and this court has not followed the view of the Kerala High Court. Therefore, the respondent is not entitled to contend that the complaint is maintainable even without the partnership K. S. Muthu Constructions. 9. Then coming to the next point with regard to the curable aspect of the defect in the complaint, by invoking Section 319 of the Code of Criminal Procedure, this court, in the above decision, following the view taken by the apex court in Delhi Municipality v. Ramkishan, , has held that when the complaint has the initial defect in its sustainability, the defect cannot be cured by amending the proceedings under Section 319 of the Code of Criminal. Procedure will not come to the rescue for such defects. Learned counsel for the respondent cited the decision of the apex court in U.P. Pollution Control Board v. Modi Distillery, to support his argumen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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