Cheque Dishonour- Additional Accused Cannot Be Impleaded After Expiry Of Limitation Period Under Sec 142 NI Act : Supreme Court

The Supreme Court held that impleadment of additional accused subsequent to the filing of a cheque bounce complaint is not permissible once the limitation prescribed for taking cognizance of the offence under Section 142 of the Negotiable Instruments Act has expired.

In this case, the High Court quashed a summoning order passed by a Magistrate in a cheque bounce complaint on the ground that the director of a company would not be liable for prosecution under Section 138 of the Negotiable Instruments Act without the company being arraigned as an accused. The High Court referred to the decision in Aneeta Hada Vs. Godfather Travels & Tours (P) Ltd. (Supra), wherein it has been held that for maintaining the prosecution under Section 141 of NI Act, arraigning of the company as an accused is imperative and non-impleadment of the company would be fatal for the complaint.

Before the Apex Court, the complainant- appellant's contention was that in the absence of any prohibition under the NI Act, the amendment in the complaint is permissible and the impleadment of an additional accused subsequent to filing of the complaint, would not be barred. The bench comprising Justices Krishna Murari and Bela M. Trivedi observed:

"The arguments advanced by learned counsel for the appellant that an additional accused can be impleaded subsequent to the filing of the complaint merits no consideration, once the limitation prescribed for taking cognizance of the offence under Section 142 of NI Act has expired. More particularly, in view of the fact that neither any effort was made by the petitioner at any stage of the proceedings to arraign the company as an accused nor any such circumstances or reason has been pointed out to enable the Court to exercise the power conferred by proviso to Section 142, to condone the delay for not making the complaint within the prescribed period of limitation".

The court noted that even though the director has been arrayed as a respondent, but there are no averments him that at the time when the offence was committed was in charge of, and was responsible to the company for the conduct of its business. Referring to State of Haryana Vs. Brij Lal Mittal & Ors. , the bench observed:

"It was held that vicarious liability of a person for being prosecuted for an offence committed under the Act by a company arises if at the material time he was in charge of and was also responsible to the company for the conduct of its business. Simply because a person is a director of a company, it does not necessarily mean that he fulfils both the above requirements so as to make him liable. Conversely, without being a director a person can be in charge of and responsible to the company for the conduct of its business."

Case details

Pawan Kumar Goel vs State of U P | 2022 LiveLaw (SC) 971 | CrA 1999 OF 2022 | 17 Nov 2022 | Justices Krishna Murari and Bela M. Trivedi

For Petitioner(s) Mr. Anubhav Kumar, Adv. M/S. Manoj Swarup And Co., AOR

For Respondent(s) Mr. Rahul Verma, Adv Mr. Vishwa Pal Singh, AOR Mr. Bharpur Singh, Adv. Mr. Naman Raj Singh, Adv. Mr. Ashish Pandey, Adv. Mr. Shantanu Krishna, AOR

Headnotes

Negotiable Instruments Act, 1881 ; Sections 138, 141, 142 - Whether the amendment in the complaint and the impleadment of an additional accused subsequent to filing of the complaint is pemissible? The argument that an additional accused can be impleaded subsequent to the filing of the complaint merits no consideration, once the limitation prescribed for taking cognizance of the offence under Section 142 of NI Act has expired. More particularly, in view of the fact that neither any effort was made by the petitioner at any stage of the proceedings to arraign the company as an accused nor any such circumstances or reason has been pointed out to enable the Court to exercise the power conferred by proviso to Section 142, to condone the delay for not making the complaint within the prescribed period of limitation - Referred to N.Harihara Krishnan Vs. J. Thomas  (2018) 13 SCC 663 (Para 22-23)

Negotiable Instruments Act, 1881 ; Sections 138,141 - Whether it is necessary to specifically state in the complaint that the person accused was in charge of, or responsible for the conduct of the business of the company - the liability arises on account of conduct , act or omission on the part of a person and not merely on account of holding an office or a position in a company. Therefore, in order to bring a case within Section 141 of the Act the complaint must disclose the necessary facts which make a person liable - Referred to S.M.S. Pharmaceuticals Ltd. Vs. Neeta Bhalla (2005) 8 SCC 89. (Para 26-31)

Negotiable Instruments Act, 1881 ; Sections 138, 141 - For maintaining the prosecution under Section 141 of NI Act, arraigning of the company as an accused is imperative and non-impleadment of the company would be fatal for the complaint - Referred to Aneeta Hada Vs. Godfather Travels & Tours (P) Ltd. (2012) 5 SCC 661.  (Para 19-21)

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