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        2018 (11) TMI 184 - HC - Indian Laws

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        Summoning of company as additional accused upheld where cheque dishonour material showed company liability and involvement in the transaction. A company may be summoned as an additional accused under Section 319 CrPC in a cheque dishonour complaint where the cheque was issued from the company ...
                      Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                        Provisions expressly mentioned in the judgment/order text.

                          Summoning of company as additional accused upheld where cheque dishonour material showed company liability and involvement in the transaction.

                          A company may be summoned as an additional accused under Section 319 CrPC in a cheque dishonour complaint where the cheque was issued from the company account, the liability arose from the company transaction, and the omission of its name from the complaint was inadvertent. The demand notice and reply may be read as relating to the company's liability where both the director and the company understood them that way, and supporting evidence shows the company's involvement in the transaction. On that material, the Magistrate's summoning order was justified, and the revisional court erred by treating the matter as one of maintainability against the director rather than the propriety of summoning the company.




                          Issues: Whether the company could be summoned as an additional accused under Section 319 of the Code of Criminal Procedure, 1973 in the cheque dishonour complaint, and whether the revisional court was justified in interfering with the Magistrate's order.

                          Analysis: The complaint had alleged that the cheques were issued against the company's account and that the liability arose from the company's transaction, though the company's name had been inadvertently omitted from the array of accused. The demand notice, though addressed to the director, was understood by both the director and the company as a notice issued in relation to the company's liability, and the reply was sent on behalf of the company. Evidence on record also indicated the company's involvement in the transaction and its contest of the proceedings. In these circumstances, the Magistrate's exercise of power under Section 319 was based on material showing the company's complicity, and the revisional court approached the matter on an incorrect footing by treating the issue as one of maintainability against the director rather than the propriety of summoning the company.

                          Conclusion: The company was validly summoned as an additional accused, and the revisional court's order setting aside the Magistrate's order was unsustainable.


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                          ActsIncome Tax
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