Western India Shipyard Ltd. vs Ganesh Benzoplast Ltd. and Others

N.A. Britto, J.—Challenge in this petition is to the order dated 5/07/2008 of the learned Additional Sessions Judge, Margao by which the order dated 4/04/2008 of the learned Magistrate dismissing the application filed u/s 319 of the Code of Criminal Procedure, 1973 to implead one Ramakant Pillani as accused no. 3 has been upheld. The said application came to be filed by the petitioner in the background of the facts which are as follows: The petitioner is the complainant (complainant, for short) in Private Criminal Complaint No. 69/OA/2003/D filed u/s 138 of the Negotiable Instruments Act, 1881. The said complaint was filed against the accused no. 1 which is a registered Company and accused no.2 namely one Ramesh Pilani being its Manging director on the allegation that the accused Company was due and payable to the complainant a sum of Rs. 64,88,878/-and in part payment of the said amount the accused Company had issued to the complainant cheque bearing no. 061004 dated 14/01/2003 for the sum of Rs. 54,09,675/-drawn on Canara Bank at Mumbai, on the account of accused no.1, and when the said cheque was presented for payment through Syndicate Bank at Mormugao, Goa, the same was returned unpaid with remark "not arranged for exceeds arrangement".

The complainant sent a legal notice dated 26/03/2003 and called upon the accused to make the payment within 15 days and since the accused failed to make the payment within the period of 15 days, the complainant filed the said complainant u/s 138 of the Act.

The complainant in para 13 of the complaint, had clearly pleaded, that the accused no.2, Mr. Ramesh Pilani, the Managing Director of the accused no.1 Company was incharge of and responsible to the accused no.1 Company for the conduct of the business of the accused Company and the said cheque was signed by accused no.2 as an authorised signatory and thus an offence u/s 138 of the said Act was committed by the accused no.1 with the consent and also due to the negligence on the part of accused no.2 and therefore both the accused were guilty of the said offence and liable to be punished accordingly.

After the complainant closed its case, the accused filed an application on 20/08/2007 to issue summons to Ramakant Pilani, respondent no.3 herein, to be examined as their witness and although the summons were not served the said Ramakant Pilani appeared before the Court on 22/02/2008 and gave evidence stating that he was the Managing Director of respondent no.1 Company and further stated that the said cheque in question was signed by him on behalf of the respondent no.1 Company and he identified the signature thereon.

The complainant therefore filed the said application styling the same to be an application u/s 319 of Cr. P.C. for amendment of the complaint to implead Mr. Ramakant Pilani as accused no.3. The complainant stated that the said Ramakant Pilani, DW1 was examined by the accused as their witness on 22/2/2008 and in his testimony he had deposed that he was the Managing Director of accused no.1 Company and had produced documentary evidence and had further stated that the cheque, the subject matter of the complaint, was issued by him and signed by him on behalf of the accused no.1 company and he had identified his signature on the said cheque. The complainant therefore proposed an amendment to the complaint or in other words the complainant sought to replace para 13 with para 13 as follows:-

PARA (13) - The Accused No. 3, Mr. Ramakant Pilani, the Managing Director of Ganesh Benzoplast Ltd., and Accused No. 2 Mr. Ramesh Pilani, were in-charge of and responsible to the Accused No. 1 Company for the conduct of the business of the Accused Company. The said cheque has been signed by the Accused No. 3 as Managing Director and authorised signatory of the Accused No. 1 Company. Thus the offence u/s 138 of the Neg. Instrument Act has been committed by the Accused No. 1 with the consent and also negligence on the part of the Accused No. 2 and Accused No. 3 and therefore all the Accused are guilty of the said offence and liable to be proceeded against and punished accordingly.

On behalf of the complainant it is submitted that Section 319 of the Code of Criminal Procedure, 1973 empowers the Court to proceed against any other person who appears to have committed an offence in which such person could be tried together with the accused already arraigned in the case and subsequent impleadment of the new accused would not affect the proceedings and therefore the said Mr. Ramakant Pilani could be brought in the array of the accused at that stage and that it would have no legal impact on the proceedings.

As far as the facts go there is no dispute that the cheque in question was drawn by the company namely A1 and, as such, it is A1 who is the drawer of the said cheque. The complainant had approached the Court with allegation that it was the accused no.2 Ramesh Pilani who was its Managing Director and that it is he who was in charge of and responsible to the accused no.1 company for the conduct of the business of the accused company. Counsel on behalf of complainant further submits that the complainant was unable to know who was exactly the Managing Director of the accused company. However, such a submission cannot be accepted. When the complainant pleaded in his complaint that it was A2, Ramesh Pilani, who was its Managing Director, it is assumed that the said averments were made with some sense of responsibility and cannot be allowed to be changed at the whims and fancies of the complainant. The learned trial Court proceeded to dismiss the application on the ground that he was summoned as a witness by the Court and, being so, his evidence was privileged u/s 132 of the Evidence Act and therefore he could not be prosecuted/impleaded as an accused u/s 319 of the Code on the basis of the incriminating statement made by him. The learned Additional Sessions Judge observed that accused no.2 Ramesh Pilani in his very statement recorded u/s 313 of the Code had stated that he was not the Managing Director of accused no.1 company and he had not signed the cheque and it was only thereafter that DW1 Shri Ramakant Pilani was examined in their defence and therefore it would not be justified to say that it had appeared from the evidence of DW1 that Ramakant Pilani had committed the offence for which he could be tried together with accused no. 1 and 2.

Shri Lawande, the learned Counsel appearing on behalf of the petitioner/complainant has submitted that cognizance of the offence having been taken, Ramakant Pilani could be added as an accused at any stage, there being no time limit. He further submits that there is no necessity to give him a notice since notice is already given to the company as drawer of the cheque. He submits that since it is now disclosed that Ramakant Pilani was the Managing Director, he should be added and proceeded with as an accused. He has cited various cases, to which a reference can now be made.

In the case of Plywood House Vs. Wood Craft Products Ltd. and Another, two contentions were raised before the Court, first, that in the absence of specific provision in the Act, the Court could not have recourse to the general provisions contained in the Code and the second is that the Court was debarred from taking cognizance of the offence against a firm after expiry of the period of one month from the date of cause of action envisaged in Clause (c) of Section 138 of the Act, and hence the firm cannot be impleaded after the said period. The Court held that once cognizance is taken subsequent impleadment of any other person as accused would not affect the judicial process already adopted in taking cognizance of the offence.

In M/s. Target Overseas Export Pvt. Ltd. & Ors. V/s. A.M. Iqbal & Anr. (2005 (3) ALL MR (Journal) 51) it has been held that going by the language of proviso (b) to Section 138 of the Act, the person entitled to notice is the drawer and not the persons who have signed the cheque on behalf of the drawer. The purpose of notice must also be borne in mind. Notice is not an empty ritualistic formality. The drawer of the cheque must be given an opportunity to reverse the effect of dishonour within the specified period. Such notice by its very purpose need be given only to the drawer and not to those who do acts on behalf of such drawer.

In S.V. Muthye V/s. State & Anr. (2002 (3) Crimes 91) it has been held that serving of notice within 15 days of the receipt of intimation regarding dishonour of cheque by the payee and failure to make payment within 15 days of receipt of notice issued under clause (b) of Section 138 of the drawer are to precede the filing of complaint u/s 138.

In Suraj Theatre & Ors. V/s. Smt. Kakarla Bhorathe & Anr. (1998 Cr.L.J. 43) it has been held that:

Section 141 of the Act does not prescribe that notice need be given to the persons who are incharge and responsible for the conduct of the business with regard to the dishonour of the cheque issued on behalf of the company before filing of the complaint, in view of the fact as they were incharge of day-to-day business of the firm, as the notice was received on behalf of the firm or the company with regard to the issuance and dishonour of the cheque and also demanding the payment of the said amount payable under the cheque and necessarily follows that they are fully aware and must have knowledge of the said aspects and hence, deemed to be guilty of the said offence and liable to be proceeded against and punished accordingly. Therefore, in the said circumstances, the Legislature in its wisdom has not prescribed the issuance of individual notice to all the partners or the persons who are incharge of the day-to-day conduct of the business of the firm or company, as the case may be, before filing the complaint as provided u/s 138 of the Negotiable Instruments Act relating to issue of notice to the drawer of the cheque. It was further held that it was difficult to accept the contention that the complaint was not maintainable as no individual notices were issued to the partners or persons incharge and responsible for the conduct of the day-to-day business of the company or the firm. The explanation appended to Section 141 of the Act clearly showed that the company means any body corporate and includes a firm or other association of individuals and a ''Director'' in relation to a firm means a partner in the firm. Therefore, it follows, in view of the foregoing discussion that no individual notices need be given to all the partners who are incharge and responsible for the conduct of the day to day business of the firm before filing a complaint with regard to the dishonour of cheque issued on behalf of the firm particularly when a notice contemplated u/s 138(b) of the Act was complied with."

In Joginder Singh and Another Vs. State of Punjab and Another, it has been stated that:

The expression ''any person not being the accused'' occurring in Section 319 clearly covers any person who is not being tried already by the Court and the very purpose of enacting such a provision like Section 319 (1) clearly shows that even persons who have been dropped by the police during investigation but against whom evidence showing their involvement in the offence comes before the Criminal Court are included in the said expression.

This Court in the case of Nutan Damodar Prabhu & anr. V/s. Ravindra Vassant Kenkre & anr. (2008 (1) GLR 15) referred to various decisions of the Apex Court in the case of K. Bhaskaran Vs. Sankaran Vaidhyan Balan and Another, and Kusum Ingots and Alloys Ltd., etc. Vs. Pennar Peterson Securities Ltd. and Others, and observed that an offence u/s 138 was completed after taking several acts mentioned therein and noted that the said acts like drawing of the cheque, presentation of the cheque, returning of the cheque unpaid, giving of notice in writing to the drawer, failure of the drawer to make payment, etc. can for the ultimate completion of an offence u/s 138 of the Act be culled out from and the other acts in themselves do not constitute an offence but it is only the last act i.e. failure of the drawer to make the payment within 15 days of the receipt of the notice of the amount due on the cheque which completes the commission of offence and if the payment is made within the said period of notice then there is no offence committed but in case of failure alone that offence gets completed and even if the payment is made on the 16th day, the same is not sufficient to come out of the rigours of Section 138 of the Act. It was reiterated that offence u/s 138 of the Act gets completed or committed by an accused in all respects upon the failure by the accused to comply with the notice of demand.

There is no doubt that Section 319 of the Code enables the Court to proceed against other persons appearing to be guilty of an offence, when in the course of an inquiry into or trial of an offence it appears from the evidence that such person has committed an offence for which such person could be tried together with the accused. There is also no dispute that the cognizance was already taken by the Court against the company who is the drawer of the cheque and against accused no.2 Ramesh Pilani as its Managing Director on the complainant''s very allegation that it is he who was in charge of and responsible to the said company. That is also the stand taken by the complainant in the cross-examination of DW1 Ramakant Pilani. It is now well settled that cognizance is taken when provisions of Section 138 and 142 of the Act are complied with. Section 142 of the Code, inter alia, provides that notwithstanding anything contained in the Code of Criminal Procedure, 1973,

(a) no Court shall take cognizance of any offence punishable u/s 138 except upon a complaint, in writing, made by the payee or, as the case may be, the holder in due course of the cheque;

(b) such complaint is made within one month of the date on which the cause of action arises under clause (c) of the proviso to section 138 which, inter alia, provides that nothing contained in Section 138 shall apply unless the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be to the holder in due course of the cheque within 15 days of the receipt of the notice.

In substance what the complainant is seeking, particularly by way of amendment to the complaint, is to substitute A2 Ramesh Pilani with A3 Ramakant Pilani, as Managing Director of A1 company. To the question as to what should happen to A2, Ramesh Pilani, since the complainant now seeks to implead Ramakant Pilani as an accused, learned Counsel appearing on behalf of the complainant has submitted that that would be decided at the end of the trial. There is no doubt that a person can be added as an accused, who was not an accused before, if he appears to have been involved in the crime from the evidence led during the trial, and he can be directed to be tried along with the other accused. In other words, a person to be added should be a person who is not an accused and can be tried along with others and these are the basic two requirements of Section 319 of the Code. In the case at hand, the sum and substance of the case of the complainant is that it is not A2, Ramesh Pilani who is the Managing Director of accused no.1 but it is the proposed A3, Ramakant Pilani who is the Managing Director and who therefore should be impleaded as an accused. In other words, the complainant is seeking to replace one accused by another and that too after the defence evidence has started. Although Section 319 of the Code gives liberty to the Court to add another accused whenever evidence recorded shows that such accused is also guilty of having committed the offence, it certainly does not give any power to the Court to replace one accused by other. Only after the complainant became aware that the case against A2, Ramesh Pilani, will fail that the complainant has sought to implead the said Ramakant Pilani, Managing Director as A3. The complainant should succeed or fail on the case he has come before the Court and at the fag end of the trial cannot be allowed to replace one accused by another by taking recourse to Section 319 of the Code. An application for amendment of a complaint is unheard of. This is not a case where the complainant is seeking to add another accused for having committed an offence u/s 138 of the Act. This is a case where A2 Ramesh Pilani is sought to be substituted by A3 Ramakant Pilani, as Managing Director of A1 company. The contention that the complainant was unable to know as to who was running the affairs of the company cannot at all be accepted. If the complainant did not know, the complainant ought to have proceeded against the company alone. It is to be presumed that the complainant made the statements in the complaint with some amount of responsibility and as such ought to succeed or fail, on the basis of the same. In the above view of the matter, the dismissal of the application filed on behalf of the complainant could not be faulted. There is no merit in this petition and consequently the same is hereby dismissed.