Company arraignment is mandatory in cheque dishonour prosecutions; later impleadment cannot cure missing statutory notice compliance.

Arraignment of the company is mandatory for a prosecution under Sections 138 and 141 of the Negotiable Instruments Act where liability of a director is vicarious. A complaint filed only against the director, without making the company an accused, is not maintainable. The statutory requirements under the proviso to Section 138, including notice of demand and failure to pay within the prescribed period, must also be satisfied before prosecution can proceed. Where notice was not served on the company, the defect could not be cured by later impleadment of the company at the stage of proceedings, and the complaint was quashed.

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Issues: (i) Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 is maintainable against a director when the company on whose behalf the cheque was issued is not arraigned as an accused. (ii) Whether, after expiry of the statutory requirements under the proviso to Section 138, the company could be impleaded at the stage of proceedings to cure the defect.

Issue (i): Whether a complaint under Section 138 of the Negotiable Instruments Act, 1881 is maintainable against a director when the company on whose behalf the cheque was issued is not arraigned as an accused.

Analysis: Liability under Section 141 is vicarious and arises only when the offence under Section 138 is attributed to a company which is itself prosecuted. The statutory scheme makes arraignment of the company an express condition for proceeding against persons in charge of its business. Since the cheque was issued by the appellant as director and on behalf of the company, but the complaint was filed only against the appellant, the prosecution was not maintainable.

Conclusion: The complaint against the appellant alone was not maintainable and the answer is in favour of the appellant.

Issue (ii): Whether, after expiry of the statutory requirements under the proviso to Section 138, the company could be impleaded at the stage of proceedings to cure the defect.

Analysis: The proviso to Section 138 prescribes mandatory conditions precedent for commission of the offence, including presentation of the cheque, issuance of notice of demand, and failure to pay within the stipulated period. In this case, notice was served only on the appellant and not on the company. Once those requirements were not complied with, the defect could not be cured by later arraignment of the company.

Conclusion: The company could not be impleaded later to remedy the absence of statutory compliance, and the answer is in favour of the appellant.

Final Conclusion: The prosecution could not proceed without the company being made an accused and without compliance with the statutory notice requirements, so the High Court's refusal to quash was unsustainable and the complaint stood quashed.

Ratio Decidendi: For an offence under Sections 138 and 141 of the Negotiable Instruments Act, 1881, arraignment of the company as an accused is imperative and the statutory preconditions for prosecution must be satisfied before the complaint can be maintained against persons in charge of the company.

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