Impleadment of new accused requires evidence under criminal procedure; inherent powers cannot bypass section 319 requirements.

After cognizance of an offence under section 454(5) and (5A) of the Companies Act, 1956, a person not initially arrayed as an accused can be brought in only through section 319 of the Code of Criminal Procedure, which requires evidence to emerge during inquiry or trial. The Companies Court could not rely on Rule 9 of the Companies (Court) Rules, 1959 as a general inherent-power provision to bypass that specific procedure. Because no evidence had been recorded against the proposed accused when impleadment was sought, the order adding him as an accused lacked legal basis and was set aside.

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Issues: Whether, after cognizance of an offence under section 454(5) and (5A) of the Companies Act, 1956, the Company Court could implead a new person as an accused merely on an application, without evidence justifying recourse to section 319 of the Code of Criminal Procedure.

Analysis: Once cognizance is taken of an offence under section 454(5) and (5A), the matter proceeds according to the criminal procedure applicable to trial of summons cases. In that setting, the power to bring in a person not already arrayed as an accused is controlled by section 319 of the Code of Criminal Procedure, which can be invoked only when, in the course of inquiry or trial, evidence appears against such person. Rule 9 of the Companies (Court) Rules, 1959 is only an inherent-powers provision and cannot be used where a specific procedural mechanism exists. As no evidence had been recorded against the appellant when he was sought to be impleaded, the order adding him as an accused had no legal basis.

Conclusion: The impleadment of the appellant as an accused was not sustainable, and the order of the Company Court was liable to be set aside in his favour.

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