2017 (4) TMI 827 - HC - Indian Laws

Court quashes criminal cases due to company not being arraigned. Vicarious liability requires company's presence.

The court allowed both applications and quashed the proceedings of the criminal cases as far as the applicant was concerned. The court emphasized that the ... Liability under section 141 of the N.I. Act - criminal cases against partnership firm - Held that:- As decied in OANALI ISMAILJI SADIKOT Versus STATE OF GUJARAT AND 1[2016 (3) TMI 290 - GUJARAT HIGH COURT ] when Subsection (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. 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. 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. Issues Involved:1. Common question of law in both applications.2. Invocation of inherent powers under Section 482 of Cr.P.C.3. Vicarious liability under Section 141 of the N.I. Act.4. Non-arraignment of the company as an accused.5. Application under Section 319 of Cr.P.C. to implead the company.6. Legal implications of Sections 138 and 142 of the N.I. Act.7. Maintainability of the complaint without the company being an accused.8. Applicability of Section 319 of Cr.P.C. in the given context.Detailed Analysis:1. Common Question of Law:The judgment begins by noting that a common question of law has been raised in both applications, and the parties involved are the same. Therefore, both applications were heard together and disposed of by a common judgment.2. Invocation of Inherent Powers under Section 482 of Cr.P.C.:The applicant sought to invoke the inherent powers of the court under Section 482 of the Code of Criminal Procedure, 1973, to quash the proceedings of two criminal cases pending in the court of the learned Chief Judicial Magistrate, Ahmedabad. These cases arose from complaints filed under Section 138 of the Negotiable Instruments Act (N.I. Act).3. Vicarious Liability under Section 141 of the N.I. Act:The applicant was arraigned as an accused in her capacity as the authorized and responsible officer of a company. The cheques in question were drawn by her husband, the original accused No.1 in the complaint. The applicant was sought to be held vicariously liable under Section 141 of the N.I. Act. However, the court noted that the complaints should fail in the absence of the company being arraigned as an accused, referencing the Supreme Court decision in Aneeta Hada vs. Godfather Travels & Tours Pvt. Ltd.4. Non-Arraignment of the Company as an Accused:The court emphasized that the complaints were not maintainable because the company, which is a necessary party, was not arraigned as an accused. This issue was considered settled by the Supreme Court in the Aneeta Hada case, which held that for vicarious liability to be fastened, the company must be arraigned as an accused.5. Application under Section 319 of Cr.P.C. to Implead the Company:The complainant's counsel argued that the non-arraignment of the company was a typographical error and that an application had been moved under Section 319 of the Cr.P.C. to implead the company. However, the court held that such an application was not maintainable at this stage, referencing its own decision in Oanali Ismailji Sadikot vs. State of Gujarat & Anr.6. Legal Implications of Sections 138 and 142 of the N.I. Act:The judgment delved into the provisions of Sections 138 and 142 of the N.I. Act. Section 138 deals with the dishonor of cheques for insufficiency of funds, while Section 142 outlines the conditions for taking cognizance of offenses under Section 138. The court highlighted that the steps for lodging a complaint under Section 138 must be taken within the time frame provided by the Act. The court also noted that the special period of limitation prescribed under Section 142 is not indefeasible and can be waived if the complainant shows sufficient cause for the delay.7. Maintainability of the Complaint without the Company Being an Accused:The court examined whether the complaint was maintainable against the partners alone in the absence of the partnership firm being impleaded as an accused. It concluded that the complaint was not maintainable and that the Magistrate could not have taken cognizance of the complaint or issued process against the partners without the firm being an accused.8. Applicability of Section 319 of Cr.P.C. in the Given Context:The court held that Section 319 of the Cr.P.C., which allows the court to proceed against other persons appearing to be guilty of an offense, does not apply in this situation. The court reasoned that Section 319 is intended to bring additional accused into a trial already in progress, not to rectify a fundamental defect in the original complaint. The court cited several precedents to support this view, emphasizing that a defective complaint cannot be cured by subsequently impleading the company.Conclusion:The court directed the trial judge to dispose of the application under Section 319 of the Cr.P.C. in line with the decision referenced. Both applications were allowed, and the proceedings of the criminal cases were quashed as far as the applicant was concerned. The rule was made absolute to this extent, and direct service was permitted.