# Smt. Maya Rani Rao v. State of U.P. & Ors

- **Citation:** (2024) 12 ILRA 826
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-11-28
- **Case number:** Application U/S 482 No. 35434 of 2024
- **Bench:** Arun Kumar Singh Deshwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/smt-maya-rani-rao-v-state-of-u-p-ors-51360
- **Pages:** 15

## Headnote

(A) Criminal Law - Applicability of Section
319 Cr.P.C. in Cheque Bounce Proceedings
under Section 138 N.I. Act - Impleadment
of Company under Section 138 N.I. Act at
post
cognizance
stage
-
Negotiable
Instruments Act, 1881 - Sections 138, 141
& 142 - The Code of criminal procedure,
1973 - Section 319 - 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 -"sublato
fundamento cadit opus" - foundation
being
removed,
structure/work
falls,
comes into play and applies on all scores
in the present case.(Para - 18)

(B) Negotiable Instruments Act, 1881 -
Section 138 - If the proceeding under
Section 138 N.I. Act is initiated on
bouncing of the cheque issued on behalf
of the company, without impleading the
company then at post cognizance stage
company
can
be
permitted
to
be
impleaded if apart from fulfilling other
condition of Section 138 N.I. Act, a
demand notice was also sent to the
company within the prescribed period
subject to the condition that the delay has
been properly explained as required under
the proviso of Section 142(1)(b) of N.I.
Act. (Para - 25)

Cheque issued by M/s Anupam Omarion
Infrastructure (India) Pvt. Ltd. - signed by its
director - dishonored due to insufficient funds -
complainant failed to implead company in the
initial complaint despite sending a demand
notice to it - application under Section 319
Cr.P.C. was filed for impleading the company -
rejected due to being time-barred -hence
application.(Paras 1-8,28)

HELD: - Application under Section 319 Cr.P.C.
not maintainable to summon a company for the
offense of Section 138 N.I. Act after the expiry
of the limitation period, even though the cheque
in question was issued on behalf of the
company. Impleadment application in the form
of
amendment
is
maintainable
in
such
12 All. Smt. Maya Rani Rao Vs. State of U.P. & Ors.
827
proceedings on fulfilling the conditions, even
though there is no specific provision of
impleadment in Cr.P.C. or N.I. Act. In the garb
of an application under Section 319 Cr.P.C.
defect of non-impleading the company cannot
be cured despite being time-barred. No illegality
in impugned order. (Para -26 to 29)

Application u/s 482 Cr.P.C. dismissed. (E7)
List of Cases cited:

## Text

_Characters 0–39,717 of 46,139. This is a partial read: ask again with offset=39717 for what follows._

826 INDIAN LAW REPORTS ALLAHABAD SERIES
Officer involved in the case for first six
months shall not be given any field posting
- any posting where the officers would be
in-
charge/I.O./supervise
of
the
investigation - till the completion of the
departmental inquiry initiated by the S.S.P.
Baghpat.

13.
In
view
of
the
aforesaid
deliberations, the entire proceedings of
Special
Sessions
Trial
No.
15/2024,
Session Case No. 461 of 2024 titled as
State vs. Anil @ Kalu and others arising
out of Case Crime No. 389 of 2022, under
Section 2/3 Gangster Act, P.S. Baghpat,
District Baghpat are quashed qua all the
accused named in the charge sheet, with
liberty to the police to prepare fresh gang
chart in accordance with the U.P. Gangsters
and Anti-Social Activities (Prevention)
Rules, 2021.

14. The instant application is disposed
of accordingly.

15. The Registrar (Compliance) is
directed to transmit forthwith a copy of this
order to the D.G.P. Uttar Pradesh for strict
compliance.
---------
(2024) 12 ILRA 826
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 28.11.2024

BEFORE

THE HON'BLE ARUN KUMAR SINGH DESHWAL, J.

Application U/S 482 No. 35434 of 2024

Smt. Maya Rani Rao ...Applicant
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Applicant:
Sangeeta Shukla, Sushil Kumar Chaturvedi
Counsel for the Respondents:
G.A.

(A) Criminal Law - Applicability of Section
319 Cr.P.C. in Cheque Bounce Proceedings
under Section 138 N.I. Act - Impleadment
of Company under Section 138 N.I. Act at
post
cognizance
stage
-
Negotiable
Instruments Act, 1881 - Sections 138, 141
& 142 - The Code of criminal procedure,
1973 - Section 319 - 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 -"sublato
fundamento cadit opus" - foundation
being
removed,
structure/work
falls,
comes into play and applies on all scores
in the present case.(Para - 18)

(B) Negotiable Instruments Act, 1881 -
Section 138 - If the proceeding under
Section 138 N.I. Act is initiated on
bouncing of the cheque issued on behalf
of the company, without impleading the
company then at post cognizance stage
company
can
be
permitted
to
be
impleaded if apart from fulfilling other
condition of Section 138 N.I. Act, a
demand notice was also sent to the
company within the prescribed period
subject to the condition that the delay has
been properly explained as required under
the proviso of Section 142(1)(b) of N.I.
Act. (Para - 25)

Cheque issued by M/s Anupam Omarion
Infrastructure (India) Pvt. Ltd. - signed by its
director - dishonored due to insufficient funds -
complainant failed to implead company in the
initial complaint despite sending a demand
notice to it - application under Section 319
Cr.P.C. was filed for impleading the company -
rejected due to being time-barred -hence
application.(Paras 1-8,28)

HELD: - Application under Section 319 Cr.P.C.
not maintainable to summon a company for the
offense of Section 138 N.I. Act after the expiry
of the limitation period, even though the cheque
in question was issued on behalf of the
company. Impleadment application in the form
of
amendment
is
maintainable
in
such
12 All. Smt. Maya Rani Rao Vs. State of U.P. & Ors.
827
proceedings on fulfilling the conditions, even
though there is no specific provision of
impleadment in Cr.P.C. or N.I. Act. In the garb
of an application under Section 319 Cr.P.C.
defect of non-impleading the company cannot
be cured despite being time-barred. No illegality
in impugned order. (Para -26 to 29)

Application u/s 482 Cr.P.C. dismissed. (E7)
List of Cases cited:
1. Aneeta Hada Vs M/S God Father Travels &
Tours Pvt. Ltd., (2012) 5 SCC 661
2. Dilip Hariramani Vs B.O.B., (2022) SCC
OnLine SC 579
3. Himanshu Vs B. Shivamurthy & anr., (2019) 3
SCC 797
4. Jitendra Mangala Vs St. of U.P & anr.,
Application u/s 482 No. 6343 of 2024
5. N. Harihara Krishnan Vs J. Thomas, (2018) 13
SCC 663
6. Somesh Sarjivan Jain Vs St. of Guj. & ors.,
Special Criminal Application No. 1790 of 2009
7. Oanali Ismailji Sadikot Vs St. of Guj. & anr.,
Special Criminal Application (Quashing) No.
4536 of 2015
8. S.R. Sukumar Vs S. Sunaad Raghuram,
(2015) 9 SCC 609
9. Usher Agro Ltd. Vs St. of U.P. & anr., (2018)
3 JIC 225 (All)

(Delivered by Hon'ble Arun Kumar Singh
Deshwal, J.)

1. Heard Sri Sushil Kr. Chaturvedi,
learned counsel for the applicant and Sri
Uday Bhan, learned A.G.A. for the State.

2. The instant application has been
filed seeking quashing of the impugned
order dated 10.9.2024 passed by Presiding
Officer, Special Judge, N.I. Act, Agra in
application dated 2.7.2024, under Section
319 Cr.P.C. in Complaint Case No. 2186 of
2017 (Maya Rani vs. Ram Autar), under
Section 138 N.I. Act, P.S. Jagdishpura,
District Agra. Further prayer is to summon
the opposite party No.3/company for facing
trial.

3. Facts giving rise to the present
case are that a cheque dated 16.12.2016 for
the amount of Rs.26,37,100/- was issued on
behalf of the company M/s Anupam
Omarion Infrastructure (India) Pvt. Ltd. by
opposite party No.2 being its director as
well as authorized signatory. That cheque
was
presented
before
the
bank
on
16.12.2016, but the same was returned on
8.3.2017 with the endorsement "fund
insufficient", thereafter the applicant sent a
notice to opposite party No.2 as well as the
company
(opposite
party
No.3)
on
31.3.2017. However, despite expiry of 15
days from the date of receiving the notice,
the cheque amount was neither paid by
opposite party No.2 nor by opposite party
No.3. Thereafter, the complaint was filed
on 24.4.2017, impleading opposite party
No.2 as proprietor of opposite party No.3.
It is undisputed that respondent No.3
(company) was not arraigned as accused in
the complaint. After perusal of the record,
learned Magistrate took cognizance on
22.6.2017 and summon was issued to
opposite party No.2. After conclusion of
evidence
of
the
applicant
and
an
application under Section 319 Cr.P.C. was
filed by the applicant on 2.7.2024 to
summon opposite party No.3 on the ground
that by mistake the opposite party No.3
could not be impleaded at the time of filing
the complaint though the cheque in
question was issued on behalf of the
company. However, that application was
828 INDIAN LAW REPORTS ALLAHABAD SERIES
rejected by the court below by impugned
order dated 10.9.2024 which has been
challenged in the present application.

4. Contention of learned counsel
for the applicant is that the applicant is the
complainant in the complaint in question
and she could not implead the company but
impleaded its proprietor at the time of filing
the complaint in the year 2017. When this
fact came into the knowledge of the
applicant in the year 2024, then she filed an
application under Section 319 Cr.P.C. to
summon
the
company,
namely,
M/s
Anupam Omarion Infrastructure (India)
Pvt. Ltd. on the ground that by mistake it
could not be impleaded as a party along
with its proprietor and that application was
rejected by the court below by the
impugned order. It is further submitted that
after bouncing of the cheque, issued on
behalf of the company, though the applicant
sent a demand notice to the company as
well as its proprietor, but by mistake she
could not implead the company as a party.
Therefore, the court below erroneously
rejected her application under Section 319
Cr.P.C. for summoning the company as
additional accused.

5. Per contra, learned A.G.A.
submitted that when the applicant has not
impleaded the company on whose behalf
the cheque in question was issued, then the
complaint itself is defective in view of
Section 141 N.I. Act as well as the law laid
down by the Apex Court in the case of
Aneeta Hada vs. M/S God Father Travels
and Tours Pvt. Ltd.; (2012) 5 SCC 661.

6. After hearing submissions of
learned counsel for the parties, a sole
question
arises
herein
whether
the
application under Section 319 Cr.P.C. is
maintainable to summon the company for
the offence of Section 138 N.I. Act after the
expiry of limitation period, though in the
complaint, company was not impleaded
despite the fact that the cheque in question
was issued on behalf of the company.

7. To decide the above question, it
is pertinent to refer Section 138, 141 and
142 N.I. Act which are being quoted as
under:-

"138. Dishonour of cheque
for insufficiency, etc., of funds in
the account.-Where any cheque
drawn by a person on an account
maintained by him with a banker
for payment of any amount of
money to another person from out
of that account for the discharge, in
whole or in part, of any debt or
other liability, is returned by the
bank unpaid, either because of the
amount of money standing to the
credit of that account is insufficient
to honour the cheque or that it
exceeds the amount arranged to be
paid from that account by an
agreement made with 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
term which may extend to 68[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
12 All. Smt. Maya Rani Rao Vs. State of U.P. & Ors.
829
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, 69[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
enforceable debt or other liability.
141.
Offences
by
companies.-(1)
If
the
person
committing
an
offence
under
Section 138 is a company, every
person who, at the time the offence
was committed, was in charge of,
and
was
responsible
to
the
company for the conduct of the
business of the company, as well as
the company, shall be deemed to be
guilty of the offence and shall be
liable to be proceeded against and
punished accordingly:
Provided
that
nothing
contained in this sub-section shall
render
any
person
liable
to
punishment if he proves that the
offence was committed without his
knowledge,
or
that
he
had
exercised all due diligence to
prevent the commission of such
offence.
Provided further that where
a person is nominated as a
Director of a company by virtue of
his
holding
any
office
or
employment
in
the
Central
Government or State Government
or a financial corporation owned
or
controlled
by
the
Central
Government
or
the
State
Government, as the case may be, he
shall not be liable for prosecution
under this chapter.
(2)
Notwithstanding
anything contained in sub-section
(1), where any offence under this
Act has been committed by a
company and it is proved that the
offence has been committed with
the consent or connivance of, or is
attributable to, any neglect on the
part of, any director, manager,
secretary or other officer of the
company, such director, manager,
secretary or other officer shall also
be deemed to be guilty of that
offence and shall be liable to be
proceeded against and punished
accordingly.
Explanation.-For
the
purposes of this section,-
(a) "company" means any
body corporate and includes a firm
or other association of individuals;
and
(b) "director", in relation
to a firm, means a partner in the
firm.
142.
Cognizance
of
offences.-71[(1)] Notwithstanding
anything contained in the Code of
Criminal Procedure, 1973 (2 of
1974),-
(a) no court shall take
cognizance
of
any
offence
punishable
under
Section
138
830 INDIAN LAW REPORTS ALLAHABAD SERIES
except
upon
a
complaint,
in
writing, made by the payee or, as
the case may be, the holder in due
course of the cheque;
(b) such complaint is made
within one month of the date on
which the cause of action arises
under clause (c) of the proviso to
Section 138:
Provided
that
the
cognizance of a complaint may be
taken by the court after the
prescribed
period,
if
the
complainant satisfies the court that
he had sufficient cause for not
making a complaint within such
period.
(c) no court inferior to that
of a Metropolitan Magistrate or a
Judicial Magistrate of the first
class
shall
try
any
offence
punishable under Section 138.
(2)
The
offence
under
Section 138 shall be inquired into
and tried only by a court within
whose local jurisdiction,-
(a)
if
the
cheque
is
delivered for collection through an
account, the branch of the bank
where the payee or holder in due
course, as the case may be,
maintains the account, is situated;
or
(b)
if
the
cheque
is
presented for payment by the payee
or holder in due course, otherwise
through an account, the branch of
the drawee bank where the drawer
maintains the account, is situated.
Explanation.-For
the
purposes of clause (a), where a
cheque is delivered for collection at
any branch of the bank of the payee
or holder in due course, then, the
cheque shall be deemed to have
been delivered to the branch of the
bank in which the payee or holder
in due course, as the case may be,
maintains the account."

8. From the perusal of Section 138
N.I. Act, it is clear that for the prosecution
of the drawer of a cheque on bouncing of
the same following conditions must be
satisfied:-

(i) The cheque must be
issued by the drawer for the
account maintained by him with
banker in discharge of any liability;
(ii) The cheque has been
presented before the bank during
the period of its validity and the
cheque has been returned by the
bank as unpaid for the reason of
insufficient fund in the account of
the drawer to honour the cheque;
(iii)
On
receiving
the
information from the bank about
the dishonouring of the cheque,
payee or holder in due course of the
cheque sends a demand notice
within 30 days in writing (which
also includes through electronic
means as per Section 4 of the
Information Technology Act) to the
drawer of the cheque to pay the
cheque amount and;
(iv) The drawer of the
cheque fails to make payment of
the cheque amount within 15 days
of receiving the demand notice.

9. From the conjoint reading of
Section 138 and 141 N.I. Act, it is clear, if
the cheque is issued on behalf of the
company/firm
then
primarily
the
company/firm should be prosecuted on
fulfilling the condition mentioned under
Section 138 N.I. Act and apart from the
12 All. Smt. Maya Rani Rao Vs. State of U.P. & Ors.
831
company, its officer or director who was
incharge of and was responsible for the
conduct of business of the company/firm
may
also
be
prosecuted
vicariously.
Therefore,
for
the
prosecution
of
company/firm under Section 138 N.I. Act,
it should be arraigned as prime accused in
the complaint and unless the company/firm
arraigned in the complaint, cognizance of
offence under Section 142 N.I. Act for the
offence under Section 138 N.I. Act cannot
be taken. If the concerned court has
mistakenly taken cognizance against the
director of the company on the basis of the
complaint in which the company/firm was
not impleaded as accused, then such
cognizance under Section 142 N.I. Act
would
be
absolutely
illegal
as
the
proceeding cannot go on against the
director, partner or employee of the
company vicariously in absence of the
company as the cognizance of the offence
can be taken against the drawer of the
cheque and in case of cheque is issued on
behalf of the company the drawer of the
cheque would be the company.

10. The Apex Court in the case of
Aneeta Hada (supra) observed that without
impleading the company/firm, prosecution
of its director is bad in the eyes of law.
Paragraphs No. 39, 58 and 59 of the Aneeta
Hada (supra) is quoted as under:-

"39. The word "deemed"
used in Section 141 of the Act
applies to the company and the
persons responsible for the acts of
the company. It crystallises the
corporate criminal liability and
vicarious liability of a person who
is in charge of the company. What
averments should be required to
make a person vicariously liable
has been dealt with in S.M.S.
Pharmaceuticals Ltd. [(2005) 8
SCC 89 : 2005 SCC (Cri) 1975] In
the said case, it has been opined
that the criminal liability on
account of dishonour of cheque
primarily falls on the drawee (sic
drawer) company and is extended
to the officers of the company and
as there is a specific provision
extending
the
liability
to
the
officers,
the
conditions
incorporated in Section 141 are to
be satisfied.
58. Applying the doctrine of
strict construction, we are of the
considered
opinion
that
commission of offence by the
company is an express condition
precedent to attract the vicarious
liability of others. Thus, the words
"as
well
as
the
company"
appearing in the section make it
absolutely unmistakably clear that
when
the
company
can
be
prosecuted, then only the persons
mentioned in the other categories
could be vicariously liable for the
offence subject to the averments in
the petition and proof thereof. One
cannot be oblivious of the fact that
the company is a juristic person
and it has its own respectability. If
a finding is recorded against it, it
would create a concavity in its
reputation. There can be situations
when the corporate reputation is
affected
when
a
Director
is
indicted.
59. In view of our aforesaid
analysis,
we
arrive
at
the
irresistible conclusion that for
maintaining the prosecution under
Section 141 of the Act, arraigning
of a company as an accused is
imperative. The other categories of
832 INDIAN LAW REPORTS ALLAHABAD SERIES
offenders can only be brought in
the drag-net on the touchstone of
vicarious liability as the same has
been stipulated in the provision
itself. We say so on the basis of the
ratio laid down in C.V. Parekh
[(1970) 3 SCC 491 : 1971 SCC
(Cri) 97] which is a three-Judge
Bench decision. Thus, the view
expressed in Sheoratan Agarwal
[(1984) 4 SCC 352 : 1984 SCC
(Cri) 620] does not correctly lay
down the law and, accordingly, is
hereby overruled. The decision in
Anil Hada [(2000) 1 SCC 1 : 2001
SCC (Cri) 174] is overruled with
the qualifier as stated in para 51.
The decision in Modi Distillery
[(1987) 3 SCC 684 : 1987 SCC
(Cri) 632] has to be treated to be
restricted to its own facts as has
been explained by us hereinabove."

11. The above ratio of Aneeta
Hada (supra) was again reaffirmed and
reiterated in the case of Dilip Hariramani
vs. Bank of Baroda; (2022) SCC OnLine
SC 579. In this judgement the Apex Court
observed that the liability of director or
partner of the company/firm is vicarious
only because of fiction as per Section 141
N.I. Act but the primary liability is of the
company/firm for commission of offence
under Section 138 N.I. Act. Paragraph
No.16 of Dilip Hariramani (supra) is
quoted as under:-

"16. The provisions of
Section
141
impose
vicarious
liability by deeming fiction which
presupposes
and
requires
the
commission of the offence by the
company or firm. Therefore, unless
the company or firm has committed
the offence as a principal accused,
the persons mentioned in subsection (1) or (2) would not be
liable and convicted as vicariously
liable. Section 141 of the NI Act
extends vicarious criminal liability
to officers associated with the
company or firm when one of the
twin requirements of Section 141
has been satisfied, which person(s)
then, by deeming fiction, is made
vicariously liable and punished.
However, such vicarious liability
arises only when the company or
firm commits the offence as the
primary offender. This view has
been subsequently followed in
Sharad Kumar Sanghi v. Sangita
Rane,17
Himanshu
v.
B.
Shivamurthy,18
and
Hindustan
Unilever
Limited
v.
State
of
Madhya Pradesh.19 The exception
carved
out
in
Aneeta
Hada
(supra),20 which applies when
there is a legal bar for prosecuting
a company or a firm, is not
felicitous for the present case. No
such plea or assertion is made by
the respondent."

12. From the above mentioned
legal position, it is clear that in case a
cheque is issued on behalf of the
company/firm
then
unless
the
company/firm is arrayed as an accused in
the complaint, cognizance for the offence
under Section 138 N.I. Act and subsequent
proceeding is erroneous. Therefore, a
question arises if a complaint is filed after
dishonouring of the cheque issued by the
director/officer/partner on behalf of the
company/firm
without
impleading
the
company/firm, then whether this defect can
be cured after taking cognizance on the
basis of above complaint. The Apex Court
in
the
case
of
Himanshu
vs.
B.
12 All. Smt. Maya Rani Rao Vs. State of U.P. & Ors.
833
Shivamurthy and another; (2019) 3 SCC
797 observed that whether the cheque in
question was issued on behalf of the
company/firm and on getting dishonoured,
the demand notice was given only to the
director and not to the company, in that
case if the complaint is filed against the
director without impleading the company
then at subsequent stage company cannot
be permitted to be impleaded as accused
because no cause of action arises in
absence of demand notice to the company.
Paragraph No.13 of the Himanshu (supra)
is quoted as under:-

"13. In the absence of the
company being arraigned as an
accused, a complaint against the
appellant
was
therefore
not
maintainable. The appellant had
signed the cheque as a Director of
the company and for and on its
behalf. Moreover, in the absence of
a notice of demand being served on
the
company
and
without
compliance with the proviso to
Section 138, the High Court was in
error in holding that the company
could now be arraigned as an
accused."

13. From the perusal of the
judgement in Himanshu (supra), it is clear
that if all ingredients, including service of
demand of notice under Section 138 N.I.
Act for initiating the proceeding against the
company, are fulfilled and there
is
satisfactory explanation of delay then
impleadment of company in the complaint
at subsequent stage is permissible or the
fresh complaint may be filed by impleading
the company on fulfilment of legal
necessity including the explanation of delay
(this view was also taken in the case of
Jitendra Mangala vs. Stat of U.P and
another.; Application u/s 482 No. 6343 of
2024).

14. However, if the company is
permitted to be impleaded on subsequent
stage as accused then fresh cognizance
order has to be passed because the
cognizance on the complaint filed without
impleading the company, is itself bad.
Presumption of law that court takes
cognizance of offence not cognizance of
the offender is not applicable in the case of
N.I. Act as the cognizance under the N.I.
Act is person specific (drawer of the
cheque).

15. So far as the applicability of
the provision of Section 319 Cr.P.C. in the
proceeding of N.I. Act is concerned, to
decide this issue Section 319 Cr.P.C. is
needed to be referred and same is quoted as
under:-

"319. Power to proceed
against other persons appearing to
be guilty of offence.-(1) Where, in
the course of any inquiry into, or
trial of, an offence, it appears from
the evidence that any person not
being the accused has committed
any offence for which such person
could be tried together with the
accused, the Court may proceed
against such person for the offence
which
he
appears
to
have
committed.
(2) Where such person is
not attending the Court, he may be
arrested or summoned, as the
circumstances of the case may
require, for the purpose aforesaid.
(3) Any person attending
the Court, although not under
arrest or upon a summons, may be
detained by such Court for the
834 INDIAN LAW REPORTS ALLAHABAD SERIES
purpose of the inquiry into, or 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."

16. From the perusal of Section
319 Cr.P.C., it is clear that this section
would apply where it appears from the
evidence on record that any person has
committed any offence but is not an
accused before the court. In case of
proceeding under Section 138 N.I. Act a
person can be said to have committed an
offence only when being drawer of the
cheque he fails to make the payment of the
dishonoured cheque issued by him despite
the expiry of 15 days from the date of
receiving the demand notice. Therefore,
even if the cheque issued by the company
got bounced but notice was not given to the
company then despite the evidence on
record that bounced cheque was issued by
the company, it cannot be said that the
company has committed any offence. In
such cases, the company cannot be
impleaded or summoned.

17. However, in those cases where
apart from fulfilling the other conditions of
Section 138 N.I. Act, demand notice was also
issued to the company on bouncing of the
cheque, then even though the company was
not accused before the court even then from
the record it can be presumed that the
company
has
committed
the
offence,
therefore, the company can be permitted to be
impleaded as an accused but on the
applicability of Section 319 Cr.P.C. there is a
presumption under Section 319(4)(b) Cr.P.C.
that if the court proceeds against such person
then it would be deemed that such person was
accused on the date when the cognizance was
taken but if the cognizance under Section 142
N.I. Act is taken without impleading the
company that itself is erroneous and the same
cannot be declared valid retrospectively in the
garb of Section 319 Cr.P.C. From the perusal
of Section 142(1)(b) Cr.P.C., it is clear that
cognizance of the offence under Section 138
N.I. Act is taken against the accused
mentioned in the complaint, therefore, when
the company itself was not a party at the time
of taking cognizance then cognizance cannot
be said to be valid under Section 142 N.I.
Act. Therefore, if on fulfilling the other
condition, the company is permitted to be
impleaded as a party then the court has to
take fresh cognizance of the offence against
the company as per Section 142 N.I. Act.
Therefore, Section 319 Cr.P.C. cannot be
strictly applied in the proceeding of Section
138 N.I. Act.

18. 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.

19. Hon'ble Apex Court in the case
of N. Harihara Krishnan vs. J. Thomas;
12 All. Smt. Maya Rani Rao Vs. State of U.P. & Ors.
835
(2018) 13 SCC 663 has observed that
invoking Section 319 Cr.P.C. as a device to
initiate proceeding against the company
beyond the period of limitation is not
permissible. Paragraphs No. 26, 27, 28, 29
of N. Harihara Krishnan (supra) are being
quoted as under:-

"26. The scheme of the
prosecution in punishing under
Section 138 of the Act is different
from the scheme of CrPC. Section
138
creates
an
offence
and
prescribes
punishment.
No
procedure for the investigation of
the offence is contemplated. The
prosecution is initiated on the basis
of a written complaint made by the
payee of a cheque. Obviously such
complaints must contain the factual
allegations constituting each of the
ingredients of the offence under
Section 138. Those ingredients are
: (1) that a person drew a cheque
on an account maintained by him
with the banker; (2) that such a
cheque when presented to the bank
is returned by the bank unpaid; (3)
that such a cheque was presented
to the bank within a period of six
months from the date it was drawn
or within the period of its validity
whichever is earlier; (4) that the
payee demanded in writing from
the drawer of the cheque the
payment of the amount of money
due under the cheque to payee; and
(5) such a notice of payment is
made within a period of 30 days
from the date of the receipt of the
information by the payee from the
bank regarding the return of the
cheque as unpaid. It is obvious
from the scheme of Section 138 that
each one of the ingredients flows
from a document which evidences
the existence of such an ingredient.
The only other ingredient which is
required to be proved to establish
the commission of an offence under
Section 138 is that in spite of the
demand notice referred to above,
the drawer of the cheque failed to
make the payment within a period
of 15 days from the date of the
receipt of the demand. A fact which
the complainant can only assert but
not prove, the burden would
essentially be on the drawer of the
cheque to prove that he had in fact
made the payment pursuant to the
demand.
27. By the nature of the
offence under Section 138 of the
Act, the first ingredient constituting
the offence is the fact that a person
drew a cheque. The identity of the
drawer of the cheque is necessarily
required to be known to the
complainant (payee) and needs
investigation
and
would
not
normally be in dispute unless the
person who is alleged to have
drawn a cheque disputes that very
fact. The other facts required to be
proved for securing the punishment
of the person who drew a cheque
that eventually got dishonoured is
that the payee of the cheque did in
fact comply with each one of the
steps contemplated under Section
138 of the Act before initiating
prosecution. Because it is already
held by this Court that failure to
comply with any one of the steps
contemplated under Section 138
would not provide "cause of action
for prosecution". Therefore, in the
context of a prosecution under
Section 138, the concept of taking
836 INDIAN LAW REPORTS ALLAHABAD SERIES
cognizance of the offence but not
the offender is not appropriate.
Unless the complaint contains all
the necessary factual allegations
constituting each of the ingredients
of the offence under Section 138,
the Court cannot take cognizance
of the offence. Disclosure of the
name of the person drawing the
cheque is one of the factual
allegations which a complaint is
required to contain. Otherwise in
the absence of any authority of
law to investigate the offence
under Section 138, there would be
no person against whom a court
can proceed. There cannot be a
prosecution without an accused.
The offence under Section 138 is
person
specific.
Therefore,
Parliament
declared
under
Section 142 that the provisions
dealing with taking cognizance
contained in the CrPC should
give
way
to
the
procedure
prescribed under Section 142.
Hence
the
opening
of
non
obstante clause under Section
142. It must also be remembered
that Section 142 does not either
contemplate a report to the police
or authorise the Court taking
cognizance to direct the police to
investigate into the complaint."

20. The issue of maintainability of
the application under Section 319 Cr.P.C.
was also considered by the Gujarat High
Court in the case of Somesh Sarjivan Jain
vs. State of Gujarat and others; Special
Criminal Application No. 1790 of 2009
wherein it is observed that the application
under
Section
319
Cr.P.C.
is
not
maintainable
to
arraign
the
accused
subsequently in the complaint. Paragraph
No. 7.3 of the Somesh Sarjivan Jain (supra)
is quoted as under:-

"7.03. In the present case,
as stated above, admittedly no
notice has been issued and served
upon the petitioner as required
under section 138 of the Negotiable
Instruments Act and therefore,
cause of action for filing the
complaint against the petitioner for
the offence under section 138 of the
Negotiable Instruments Act does
not arise. Therefore, as such in
absence of any statutory notice
upon
the
petitioner
even
as
proprietor of Jain Electronics, a
Proprietorship Firm - drawer of the
cheque,
petitioner
cannot
be
prosecuted for the offence under
section 138 of the Negotiable
Instruments Act and therefore, in
absence of such notice as required
under section 138 of the Negotiable
Instruments Act and any eventuality
as contemplated under Clause (C)
of provision to section 138 of the
Negotiable Instruments Act, no
complaint can be filed against
petitioner for the offence under
section 138 of the Negotiable
Instruments Act and even the
learned Magistrate cannot take
cognizance of the offence against
the petitioner for the offence under
section 138 of the Negotiable
Instruments
Act.
Under
the
circumstances, petitioner cannot be
arraigned as accused subsequently
for the offence under section 138 of
the Negotiable Instruments Act in
exercise of the powers under
section 319 of the Code of Criminal
Procedure. By exercising powers
under section 319 of the Code of
12 All. Smt. Maya Rani Rao Vs. State of U.P. & Ors.
837
Criminal Procedure arraigning the
accused subsequently, complaint
winch
otherwise
was
not
maintainable against the petitioner
for the offence punishable under
section 138 of the Negotiable
Instruments Act, cannot be made
maintainable.
Under
the
circumstances,
nobody
can be
arraigned as accused by the
learned Magistrate in exercise of
the powers under section 319 of the
the Code of Criminal Procedure in
a complaint for the offence under
section 138 of the Negotiable
Instruments Act which otherwise is
not maintainable."

21. Gujarat High Court again
considered the issue of maintainability of
the application under Section 319 Cr.P.C. in
the proceeding under Section 138 N.I. Act
in the case of Oanali Ismailji Sadikot vs.
State of Gujarat and another; Special
Criminal Application (Quashing) No.
4536 of 2015. In that case, Hon'ble Justice
J.B. Pardiwala, after discussing in detail the
object of Section 319 Cr.P.C., observed that
the application under Section 319 Cr.P.C. is
not maintainable in the proceeding of N.I.
Act. Paragraphs No. 72, 73 and 76 Oanali
Ismailji Sadikot (supra) are quoted as
under:-

"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 aid of curing a serious
defect or infirmity in the complaint
or the order taking cognizance.
When Sub-section (4)(b) of Section
319 of the Code says that it will be
presumed that the newly added
person had been an accused person
when the Court took cognizance of
the complaint upon which the
inquiry or trial was commenced,
the same indicates that the Court is
not empowered to take cognizance
of any fresh offence if any accused
is impleaded by invoking Section
319 and the newly added accused
could be tried only for the offence
already taken cognizance against
the other accused,
73. The policy of the Code
is that the offence can be taken
cognizance of once only and not
repeatedly
upon
discovery
of
further particulars. In a given case,
the complainant may not even know
the names and other particulars of
the
offenders,
and
it
would,
therefore, be sufficient for him to
lodge a complaint making the
persons who are known as the
accused.
When
such
a
trial
proceeds
against
the
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. I 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.
838 INDIAN LAW REPORTS ALLAHABAD SERIES
76. In view of the aforesaid
discussion,
I
hold
that
the
application under Section 319 of
the Cr.P.C. is not maintainable, and
the Court below rightly rejected the
same.
The
third
question
is
answered accordingly."

22. Though it is clear from the
legal
position
discussed
above
that
application under Section 319 Cr.P.C. is not
maintainable but a question arises whether
the impleadment is permissible in certain
circumstances despite the fact, there is no
specific provision in Cr.P.C. (or B.N.S.S)
for impleadment.

23. The Apex Court in the case of
S.R. Sukumar vs. S. Sunaad Raghuram;
(2015) 9 SCC 609 observed in paragraphs
No. 17 and 18 that in certain circumstances
amendment in complaint to correct the
curable
infirmities
is
permissible.
Paragraphs No. 17 & 18 are quoted as
under:-

"17. Insofar as merits of
the contention regarding allowing
of amendment application, it is true
that there is no specific provision in
the Code to amend either a
complaint or a petition filed under
the provisions of the Code, but the
Courts have held that the petitions
seeking such amendment to correct
curable infirmities can be allowed
even in respect of complaints. In
U.P. Pollution Control Board v.
Modi Distillery, 1995 (SLT Soft)
1194 : (1987) 3 SCC 684, wherein
the name of the company was
wrongly
mentioned
in
the
complaint that is, instead of Modi
Industries Ltd. the name of the
company was mentioned as Modi
Distillery and the name was sought
to be amended. In such factual
background, this Court has held as
follows:-
"...The
learned
Single
Judge has focussed his attention
only on the [pic]technical flaw in
the complaint and has failed to
comprehend that the flaw had
occurred due to the recalcitrant
attitude of Modi Distillery and
furthermore the infirmity is
one which could be easily removed
by having the matter remitted to the
Chief Judicial Magistrate with a
direction to call upon the appellant
to make the formal amendments to
the averments contained in 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
Board's 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
12 All. Smt. Maya Rani Rao Vs. State of U.P. & Ors.
839
that there is no enabling provision
in the Code for entertaining such
amendment, the Court may permit
such an amendment to be made.