Suryanarayanan vs Anchor Marine Service

Rengasamy, J.—This petition is filed u/s 482 of the Code of Criminal Procedure to quash the proceedings against the petitioner. The

respondent has filed a complaint against him and another for the offences under sections 138 and 142 of the Negotiable Instruments Act on the file

of the VIIth Metropolitan Magistrate, G.T., Madras, in C.C. No. 2974 of 1994, alleging that the cheque issued by this petitioner, who signed as

authorised signatory of Tajoomals Industries, was dishonoured for insufficiency of funds, and, therefore, they have committed the offences under

sections 138 and 142 of the Negotiable Instruments Act.

The petitioner has raised two contentions in this petition for quashing the proceedings against him. The first contention is that the cheque was

drawn by him as authorised signatory of Tajoomals Industries but the complaint has been filed against him in his individual capacity without

impleading the company and this is not in compliance with section 141 of the Negotiable Instruments Act, 1881, and, therefore, the complaint is

not maintainable. The next contention is that even though the complainant, T. N. Srinivasan, has stated that he is the power of attorney of Mrs.

Omana Manavalan, one of the partners of Anchor Marine Service, the power of attorney is not produced before the court, and, therefore, the

complaint is not maintainable.

So far as the second point is concerned, when the petitioner-complainant has stated that he is the power of attorney of Anchor Marine Service

and he filed a complaint on the instruction of the partner, it is a matter to be considered at the time of the evidence whether the power of attorney

referred to in his affidavit is valid and true. Therefore, that cannot be gone into at this stage to quash the proceedings.

So far as the first point is concerned, this court has taken a consistent view that without adding the company, the prosecution against the

directors cannot be maintained. In S. Krishnamoorthy v. B. S. Kesavan [1994] 80 Comp Cas 755 ; [1994] 1 LW (Cri.) 135 (Mad) , Pratap

Singh J. relying upon the decision in Krishan Bai v. Arti Press [1994] 80 Comp Cas 750 ; [1991] 1 LW (Crl.) 513 (Mad), has held that without

impleading the firm, who had drawn the cheque which was dishonoured, the complaint against the partners of the firm will not be in compliance

with section 141 of the Negotiable Instruments Act, and, therefore, the complaint is liable to be quashed. In the decision in Krishan Bai v. Arti

Press [1994] 80 Comp Cas 750; [1991] 1 LW (Crl.) 513 (Mad) Padmini Jesudurai J. has relied upon the decision of the apex court in U. P.

Pollution Control Board v. Modi Distillery [1988] 63 Comp Cas 77; AIR 1988 SC 1123. Therefore, the view of the Supreme Court has been

followed by Padmini Jesudurai J. in Krishan Bai v. Arti Press [1994] 80 Comp Cas 750; [1991] 1 LW (Cri.) 513 (Mad), which was later on

followed by Pratap Singh J. in S. Krishnamoorthy v. B. S. Kesavan [1994] 80 Comp Cas 755 ; [1994] 1 LW (Cri.) 135 (Mad). Subsequently,

Pratap Singh J. in another decision in A. Jafferullah Vs. T. Stanes and Co. Ltd., has confirmed his earlier view holding that without impleading the

partnership firm as one of the accused, the complaint cannot be sustained against its partners. But learned counsel appearing for the respondent

refers to the view of the Kerala High Court in Alex v. Vijayan [1994] 81 Comp Cas 910; [1994] 1 Crimes 505, wherein the Kerala High Court

has held that when the offence is committed under sections 138 and 141 of the Negotiable Instruments Act, proceedings can be initiated against

either or both the company and the person in charge of the business of the company can be independently prosecuted without impleading the

company. But the Kerala High Court has dissented from the view of this court taken in Krishan Bai v. Arti Press [1994] 80 Comp Cas 750;

[1991] 1 LW (Cri.) 513 (Mad), in which the decision of the Supreme Court in Sheoratan Agarwal and Another Vs. State of Madhya Pradesh, ,

was followed. It is true that the apex court in Sheoratan Agarwal and Another Vs. State of Madhya Pradesh, , has held that under the Essential

Commodities Act, 1955, persons or officers of the company can be separately prosecuted u/s 1 or 2 of the Essential Commodities Act

irrespective of whether the company itself is prosecuted or not, for the contravention of the order by the company. But, in the later decision of the

apex court in U.P. Pollution Control Board v. Modi Distillery [1988] 63 Comp Cas 77; AIR 1988 SC 1123, the apex court has held that unless

there was prosecution of the company, there can be no prosecution of the managing director. As the apex court has taken two different views in

different times in A. Jafferullah Vs. T. Stanes and Co. Ltd., , Pratap Singh J. has observed that the later decision of the Supreme Court has to be

followed. I respectfully agree with this view of the learned judge.

Section 141 of the Negotiable Instruments Act, 1881, reads as follows :

Offences by campanies. - (1) If the person committing an offence u/s 138 is a company, every person, who, at the time the offence was

committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall

be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.

The wording in the section ""as well as the company shall be deemed to be guilty of the offence and shall be liable to be proceeded against

makes it clear that the company also shall be prosecuted along with the others, who were in charge of the company. Therefore, if the company has

not been impleaded as an accused in the proceedings, it will not be in compliance with section 141 of the Negotiable Instruments Act, 1881, and,

therefore, the prosecution is not sustainable against the directors or persons in the administration of the company as held in the decisions cited

above.

Learned counsel for the respondents placed another submission that the complainant is always entitled to implead the other accused in the

course of the proceedings u/s 319 of the Code of Criminal Procedure, and, therefore, now he may be permitted to implead the company also as

one of the accused and if the company is brought on record, the present infirmity gets cured, and, therefore, the prosecution cannot be quashed.

Section 319 of the Code of Criminal Procedure, no doubt permits for impleading another accused in the course of the enquiry or trial when it

appeared from the evidence that another person also has committed offence and he also should be tried together with the other accused. Learned

counsel for the respondent relies upon the decision in U.P. Pollution Control Board v. Modi Distillery [1988] 63 Comp Cas 77 ; AIR 1988 SC

1123, in support of his argument. The decision cited above is about the right of the complainant to set right the technical flaw by amending the

complaint. But learned senior counsel for the petitioner, Mr. N. T. Vanamamalai, would contend that that was a case in which the company also

was impleaded as a party, but the company was wrongly described as the industrial unit, wilfully failed to furnish the requisite information to the

complainant therein, and, therefore, the amendment was permitted. The apex court observes that the industrial unit having failed to furnish the

correct description of the company, it was not open to them to take advantage of their own lapses to quash the proceedings alleging that the

company was not properly described. So, in that case, the company was impleaded as a party but the description of the company was found to be

a mistake, and, therefore, the apex court observed that this technical flaw of describing the name of the company can be rectified by amending the

complaint. Therefore, that decision will not come in support of the respondent''s contention because in this case, the respondent has deliberately

omitted to implead the company. According to the learned senior counsel, Mr. Vanamamalai, the defect in this case, is a serious legal infirmity in

the complaint itself, and, therefore, when the complaint itself has the initial defect, the proceedings cannot be allowed to continue against the

petitioner. He also draws support from the decision in Municipal Corporation of Delhi Vs. Ram Kishan Rohtagi and Others, , wherein the

Supreme Court observes that it is manifestly clear that proceedings against an accused in the initial stage can be quashed only if on the basis of the

complaint or the papers accompanying the same, no offence is constituted. In other words, the test is that taking the allegations in the complaint, as

they are, without adding or subtracting anything, if no offence is made out, then the High Court will be justified in quashing the proceedings in

exercise of its powers u/s 482 of the present Code. In the above view of the Supreme Court, the maintainability of the proceedings against a

particular accused has to be considered without adding or subtracting anything in the complaint.

Now it is found that without impleading the company, the present complaint against the petitioner is not sustainable. Therefore, when the

complaint has the initial defect in its sustainability, the defect cannot be cured by amending the proceedings. Section 319 of the Code of Criminal

Procedure, no doubt permits for impleading any other accused, who was party to the commission of the offence. But impleading such co-accused

u/s 319 of the Code of Criminal Procedure will not have any bearing as to the maintainability of the proceedings against other accused. Section

319 of the Code of Criminal Procedure is not intended for curing the infirmity in the proceedings but only to bring all the culprits before the court

when their role in the commission of the offence was brought to light only after the evidence before court. Such is not the position in this case. The

respondent had deliberately omitted to implead the company in the complaint though section 141 of the Negotiable Instruments Act, 1881,

emphasizes that the company also shall be an accused. When the proceedings has legal infirmity in its initiation itself, the respondent is not entitled

to invoke section 319 of the Code of Criminal Procedure because on the date of the complaint, it was not maintainable against the petitioner.

Therefore, accepting the contention of the learned senior counsel, Mr. N. T. Vanamamalai, the proceedings against the petitioner have to be

quashed.

In the result, the proceedings in C.C. No. 2974 of 1994, on the file of the VIIth Metropolitan Magistrate, Madras, are quashed. The petition is

allowed.