Corporate cheque dishonour requires arraigning the company, and Section 319 CrPC cannot bypass NI Act limitation.

In a Section 138 NI Act prosecution, where the cheque drawer is a company, the company must be arraigned as an accused because Section 141 fastens only vicarious liability on persons in charge; a signatory alone is not the drawer, so the prosecution against the officer could not be sustained without the company. An application styled under Section 319 CrPC could not be used to implead the company after the limitation period under Section 142 had expired, as the NI Act's filing timeline cannot be bypassed in that manner and no sufficient cause for condonation was shown. The impugned orders were therefore unsustainable.

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Issues: (i) Whether, in a prosecution under Section 138 of the Negotiable Instruments Act, 1881, the company alleged to have drawn the cheque had to be arraigned as an accused before the director/signatory could be proceeded against. (ii) Whether an application styled under Section 319 of the Code of Criminal Procedure, 1973 could be used to implead the company after the statutory period of limitation under Section 142 of the Negotiable Instruments Act, 1881 had expired.

Issue (i): Whether, in a prosecution under Section 138 of the Negotiable Instruments Act, 1881, the company alleged to have drawn the cheque had to be arraigned as an accused before the director/signatory could be proceeded against.

Analysis: Liability under Section 138 is fastened on the drawer of the cheque, and where the drawer is a company, Section 141 makes the company a necessary accused and permits only vicarious liability of persons in charge of its affairs. A signatory acting for the company does not by that fact alone become the drawer. Without impleading the company, the prosecution against the signatory could not be sustained on the footing adopted by the courts below.

Conclusion: The company had to be arraigned as an accused, and the prosecution against the appellant could not proceed in the manner permitted below.

Issue (ii): Whether an application styled under Section 319 of the Code of Criminal Procedure, 1973 could be used to implead the company after the statutory period of limitation under Section 142 of the Negotiable Instruments Act, 1881 had expired.

Analysis: The statutory scheme of Sections 138 and 142 requires a complaint to be filed within the prescribed time after the cause of action arises, subject only to condonation on sufficient cause. An application under Section 319 CrPC cannot be employed as a device to circumvent the limitation regime under the Negotiable Instruments Act. The explanation that the cheque account of the company was discovered only during trial was rejected, and no sufficient cause for condonation was made out.

Conclusion: The belated impleadment of the company was not permissible, and the delay could not be condoned on the facts.

Final Conclusion: The impugned orders were unsustainable because the prosecution was sought to be expanded beyond limitation and contrary to the mandatory requirement that the company be made an accused in a cheque dishonour case involving a corporate drawer.

Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, where the drawer of the cheque is a company, the company must be arraigned as an accused for the prosecution of its officers to be maintainable, and the limitation under Section 142 cannot be defeated by resorting to Section 319 CrPC.

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