TMI Blog2016 (3) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... necessarily follows that arraigning of a partnership firm is also imperative for prosecution against the partners under Section 141 of the Negotiable Instruments Act. The prosecution launched against only one of the partners of the partnership firm, without joining the partnership firm, cannot be maintainable. In view of the specific provisions of the Act itself, it is very difficult for the Court to take a view that a partnership firm for the purpose of Section 138 read with Section 141 of the Act is not a legal entity, and therefore, it need not be made an accused in the complaint. The decisions relied upon by the learned counsel appearing for the petitioner are of no avail in any manner. Power to proceed against other persons appearing to be guilty of offence - Will the situation be saved by virtue of Section 319 of the Cr.P.C., which is sought to be invoked in the present case?- Held that:- By virtue of a legal fiction, it cannot be said that on the date of filing of the complaint, the Court was justified in taking cognizance and issue process against the partners in the absence of the legal entity and no fault could be found so far as the legality and validity of the cog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred u/s. 319 of the Code of Criminal Procedure in Criminal Case No 222 / 2004; and further be pleased to allow the application at Exhibit 53 preferred in Criminal Case No.222/2004 by permitting the petitioner to show the name of Swastik Construction Company by mentioning separate serial number in the complaint at Exhibit no.1. (c) Any other and further relief/s as may be deemed just, fit and proper in the facts and circumstances of the present case may kindly be granted in the interest of justice. 2 The facts of this case may be summarized as under: 2.1 The applicant herein filed a complaint being Criminal Case No.222 of 2004 in the Court of the Additional Chief Judicial Magistrate, Gondal, against the respondent No.2 herein for the offence punishable under Section 138 of the Negotiable Instruments Act. 2.2 As is evident on perusal of the complaint itself, which is at page 11, Annexure: A to this petition, that six individuals have been arraigned as accused being partners of a partnership firm running in the name of Swastik Construction . The partnership firm, as a legal entity or juristic person, has not been arraigned as an accused. 2.3 The learned Chief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5, the applicant original complainant preferred an application Exhibit : 53 in the Criminal Case No.222 of 2004 with a prayer that he may be permitted to implead the partnership firm being a legal entity as an accused in the complaint and trial Court shall take cognizance and issue process against the partnership firm. The application Exhibit : 53 is purported to have been filed under Section 319 of the Code of Criminal Procedure, 1973. 2.8 The learned Chief Judicial Magistrate, Gondal adjudicated the application Exhibit : 53 and vide order dated 15th April, 2015 rejected the same. 2.9 Being dissatisfied with the order passed below Exhibit : 53, the applicant original complainant has come up with this application, invoking the supervisory jurisdiction of this Court under Article 227 of the Constitution of India. 3 Mr. Tushar L. Sheth, the learned counsel appearing for the applicant vehemently submitted that the learned Magistrate committed a serious error in rejecting the application Exhibit : 53. He submitted that the application filed under Section 319 of the Cr.P.C. to implead the partnership firm being a legal body is maintainable. He submitted that assuming for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then on a police report. He prays that there being merit in the matters, the same be allowed and the original application Exhibit : 53 may also be allowed. 7 In support of his submission, Mr. Sheth placed strong reliance on the following decisions: (1) V. Subramaniuam v. Rajesh Raghuvandra Rao [(2009) 5 SCC 608] (2) Munshi Ram v. Municipal Committee, Chheharta [(1979) 3 SCC 83] (3) Comptroller and Auditor General v. Kamlesh Vadilal Mehta [(2003) 2 SCC 349] (4) Bacha F. Guzdar, Bombay v. Commissioner of Income Tax, Bombay [[1955 AIR SC 74] (5) A Kerala High Court decision of a learned Single Judge (K.T. Thomas, J., as His Lordship then was) in the case of Plywood House v. Wood Craft Products Limited [1994 (1) Crimes 434] (6) Mahabir Cold Storage v. Commissioner of Income Tax, Patna [1991 AIR SC 1357] (7) Hardeep Singh v. State of Punjab and others [2014 (1) Scale 241] 8 Having heard the learned counsel appearing for the applicant and having considered the materials on record, the following questions fall for my consideration: (I) Whether a partnership firm is a legal entity like a company so far as the offence punishable under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the municipality any of the following taxes, namely: (1) (a) .............. (i) to (iii) .......... (b) a tax on persons practising any profession or art or carrying on any trade or calling in the municipality. Explanation. A person in the service or person holding an office under the State Government or the Central Government or a local or other public authority shall be deemed to be practicing a profession within the meaning of this subsection. 9.2 The Supreme Court proceeded to observe in paras 15, 16 and 18 as under: 15. From a plain reading of the extracted provision, it is clear that a tax leviable under clause (b) is, in terms, a tax on persons . The expression persons undoubtedly includes natural persons. The class of such taxable persons has been indicated by the Legislature with reference to their occupational activity. Thus, in order to be authorised, a tax under clause (b) of Section 61 (1) must satisfy two conditions: First, it must be a tax on persons . Second, such persons must be practicing any profession or art or carrying on any trade or calling in the municipality. 16. There can be no dispute that the appellants are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elong to a class practicing any profession or art; or carrying on a trade or calling in the municipality. To hold that persons who are collectively carrying on a trade in the municipality cannot be taxed individually, would be to read into the statute words which are not there. There are no words in clause (b) or elsewhere in the statute which, expressly or by necessary implication, exclude or exempt persons carrying on a trade collectively in the municipality from being taxed as individuals. To attract liability to a tax under this clause, it is sufficient that the person concerned is carrying on a trade in the municipality, irrespective of whether such trade is being carried on by him individually or in partnership with others. Thus, both the conditions necessary for levying a tax under clause (b) of subsection (1) of Section 61 of the Municipal Act existed in this case. The appellants are persons and they are carrying on a trade in Chheharta Municipality. 9.3 By placing reliance on the observations made in para 18, the learned counsel submitted that a firm or partnership is not a legal entity separate and distinct from the partners. 10 In Mahabir Cold Storage (supra), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary implication is that the assessee who claims development rebate should continue to remain to be the owner of the ship or plant or machinery during the relevant previous assessment year/ years and the owner alone is entitled to the development rebate till it becomes nil in the relevant previous assessment year or the succeeding assessment years carried forward up to 8 years and not thereafter. 11 In Comptroller and Auditor General (supra), the issue before the Supreme Court was whether the respondent being a proprietary concern was eligible for being brought on the panel for audit work of government companies and concerns. The audit work of the government and public undertakings was assigned to only those Chartered Accountant firms which were enrolled on the panel maintained by the appellant. The appellant through an advertisement invited applications from the firms of the Chartered Accountants for the purpose of empanelment for audit of the government companies. The respondent therein had submitted an application for enrollment on the panel, but the same was rejected on account of the fact that his firm was not a partnership firm, but a proprietary concern. Aggrieved, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant himself erroneously assumed that the partnership firms are more efficient than the proprietary concern in the matter of audit of accounts of the public sector undertakings or of the Government concerns. 12 In Bacha F. Guzdar (supra), the argument before the Supreme Court was that the possession of the shareholders in a company was analogous to that of partners inter se . While holding the analogy is wholly inaccurate, the Supreme Court observed, in para 9, as under: 9. It was argued that the position of shareholders in a company is analogous to that of partners inter se. This analogy is wholly inaccurate. Partnership is merely an association of persons for carrying on the business of partnership and in law the firm s name is a compendious method of describing the partners. Such is, however, not the case of a company which stands as a separate juristic entity distinct from the shareholders. In Halsbury s Laws of England, Vol. 6 (3rd Ed), page 234, the law regarding the attributes of shares is thus stated : A share is a right to a specified amount of the share capital of a company carrying with it certain rights and liabilities while the company is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of a firm would not make it a distinct legal entity like a company. The partners of a firm are coowners of the proprietary firm, unlike the shareholders in a company who are not coowners of the property of the company. 15 However, the position of a partnership firm so far as Section 138 read with Section 141 of the Negotiable Instruments Act is concerned appears to be altogether different. Section 141 of the Act reads as under: 141. Offences by companies (1) If the person committing an offence under section 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. Provided that nothing contained in this subsection shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence : [Provided further that where a person is nominated as a Director of a company by virtue of his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he shall not be liable to punishment under this section. Subsection (2) further provides that where any offence under this Act has been committed by a company and it is provided that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. The Explanation to the section defines company as any body corporate and includes a firm or other association of individuals; and director , in relation to a firm, means a partner in the firm. 17 It is only the drawer of the cheque, who can be held responsible for an offence under Section 138 of the Act. Section 141 provides for the constructive liability. It postulates that a person, in charge of and responsible to the company, in the context of the business of the company, shall also be deemed guilty of the offence. The drawer can be a company, a firm or an association of individuals, but only those directors, partners, or officers can be held res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excises Act 1944, the Sales Tax Laws and Section 141 Negotiable Instruments Act, a firm can be proceeded against as such. It is perfectly possible for a complainant, aggrieved by the dishonour of a cheque issued by or behalf of a firm, to file a complaint for the offence under Section 138 Negotiable Instruments Act only against the firm. The complainant may choose not to proceed against the individual partners as accused either because he is not aware as to who are the partners or is not interested in proceeding against the partners apart from the firm. 21 It is now well settled that an Explanation added to a statutory provision is not a substantive provision in any sense of the term but as the plain meaning of the word itself shows it is merely meant to explain or clarify certain ambiguities which may have crept in the statutory provision. Sarathi in Interpretation of Statutes while dwelling on the various aspect of an Explanation observes as follows: (a) The object of an explanation is to understand the Act in the light of the explanation. (b) It does not ordinarily enlarge the scope of the original section which it explains, but only makes the meaning cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age of the Explanation this Court held that it did not widen the scope of clause (c). But from what has been said in the case, it is clear that if on a true reading of an Explanation it appears that it has widened the scope of the main section, effect be given to legislative intent notwithstanding the fact that the legislature named that provision as an Explanation. 27 In Dattatraya Govind Mahajan v. State of Maharashtra [(1977) 2 SCR 790: (AIR 1977 SC 915), the Supreme Court observed thus : It is true that the orthodox function of an explanation is to explain the meaning and effect of the main provision to which it is an explanation and to clear up any doubt or ambiguity in it.......... Therefore, even though the provision in question has been called an Explanation, we must construe it according to its plain language and not on any a priori considerations. 28 Thus, from a conspectus of the authorities referred to above, it is manifest that the object of an Explanation to a statutory provision is (a) to explain the meaning and intendment of the Act itself, (b) where there is any obscurity or vagueness in the main enactment, to clarify the same so as to make it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the company is a juristic person and it has its own respectability. If a finding is recorded against it, it would create a concavity in its reputation. There can be situations when the corporate reputation is affected when a director is indicted. 59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Section 141 of the Act, arraigning of a company as an accused is imperative. The other categories of offenders can only be brought in the dragnet on the touchstone of vicarious liability as the same has been stipulated in the provision itself. We say so on the basis of the ratio laid down in C.V. Parekh (supra) which is a threeJudge Bench decision. Thus, the view expressed in Sheoratan Agarwal (supra) does not correctly lay down the law and, accordingly, is hereby overruled. The decision in Anil Hada (supra) is overruled with the qualifier as stated in paragraph 37. The decision in Modi Distilleries (supra) has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed is imperative, but the main basis for arriving at its conclusion was the vicarious liability which the directors or partners of the firm can have towards the company and hence without joining the company on the touchstone of vicarious liability they cannot be prosecuted. 33 Therefore, the ratio laid down in the case of Aneeta Hada (supra) can be made equally applicable in the case of a partnership firm also. The partners are liable and sued in their vicarious liability. Whether the partnership firm is a juristic person or not is a different aspect. What is important is that a partner of the firm is arraigned as an accused in the dragnet on the touchstone of vicarious liability, as is done in the case of directors of the company. Therefore, there is no reason at all to draw any distinction in respect of the law to be made applicable to a partnership firm and the company. 34 Moreover, the Legislature has already made it clear that the company includes any body corporate which includes a firm or other association of individuals and director in relation to a firm means a partner in the firm. On this count also, when Section 141 of the Negotiable Instruments Act and explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or with fine which may extend to twice the amount of the cheque, or with both : Provided that nothing contained in this section shall apply unless( a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, b [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) 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 fifteen days of the receipt of the said notice. Explanation.For the purposes of this section, debt or other liability means a legally enforceable debt or other liability. 142. Cognizance of offences Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),( a) no Court shall take cognizance of any offence punis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the process. The thrust is only on making the complaint meaning thereby presenting it to the Magistrate . The concept of its cognizance or the concept of issuance of process on the basis of such complaint is simply not to be found in the whole section. It is clear that once the complaint is filed within time contemplated under Section 142(b), the cognizance could be taken later. 40 In the case in hand, it is not in dispute that the complaint was filed without arraigning the partnership firm being a legal entity as an accused. It is not in dispute that the Magistrate took cognizance upon the complaint in the absence of the legal entity being the principal accused and thought fit to issue process against the Directors by virtue of their vicarious liabilities under Section 141 of the Act. 41 The following are the questions I need to look into: (I) Whether the complaint under Section 138 of the Act the day it was filed was maintainable in law against the partners alone in the absence of the partnership firm being a legal entity not being impleaded as an accused? (II) Whether the Magistrate could have taken cognizance upon the complaint and ordered issue of process agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the provisions of clause (a), the case may proceed as if such person had been an accused person when the Court took cognizance of the offence upon which the inquiry or trial was commenced. 44 The objects and reasons of Section 319 of the Cr.P.C. are as under: The Law Commission in its 41st Report observed : 24.80. It happens sometimes, though not very often, that a Magistrate hearing a case against certain accused finds from the evidence that some person, other than the accused before him, is also concerned in that very offence or in a connected offence. It is only proper that a Magistrate should have the power to call and join him in the proceedings. Section 351 provides for such a situation, but only if that person happens to be attending the Court. He can then be detained and proceeded against. There is no express provision in S. 351 for summoning such a person if he is not present in Court. Such a provision would make S. 351 fairly comprehensive, and we think it proper to expressly provide for that situation. 24.81. Section 351 assumes that the Magistrate proceeding under it has the power of taking cognizance of the new case. It does not, however, say in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Section 319 of the Code was to provide for a more comprehensive provision, with considerable improvement in the old Section 351, for proceeding against other persons appearing to be guilty, although he is not an accused. Section 319 of the Code provides that where in the course of an enquiry or trial of an offence, if it appears from the evidence that any person not being accused has committed any offence, Court may proceed against such person for the offence which he appears to have committed. The intention of the Legislature in enacting Section 319 appears to be that if somebody other than the person who is party and facing trial or enquiry is also an accused, he may be summoned on the basis of some evidence available on the record. 47 Thus, having regard to the substantive provision of Section 319 of the Cr.P.C. read in conjunction with the objectives and reasons, Section 319 of the Cr.P.C. authorizes the Court concerned to take cognizance against any person who has not been tried with the accused, but, who appears to be a person not being accused has committed any offence along with the accused persons and in such circumstances that person can also be tried together with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al proceedings would fall through for the reason that illegality strikes at the root of the order. In such a factsituation, the legal maxim sublato fundamento cadit opus meaning thereby that foundation being removed, structure/work falls, comes into play and applies on all scores in the present case. 53 In Badrinath v. State of Tamil Nadu and Ors. [AIR 2000 SC 3243]; and State of Kerala v. Puthenkavu N.S.S. Karayogam and Anr., [(2001) 10 SCC 191], the Supreme Court observed that once the basis of a proceeding is gone, all consequential acts, actions, orders would fall to the ground automatically and this principle is applicable to judicial, quasijudicial and administrative proceedings equally. 54 Similarly in Mangal Prasad Tamoli (dead) by L.Rs. v. Narvadeshwar Mishra (dead) by L.Rs. and Ors., [(2005) 3 SCC 422 : (AIR 2005 SC 1964)], the Supreme Court held that if an order at the initial stage is bad in law, then all further proceedings, consequent thereto, will be non est and have to be necessarily set aside. 55 In C. Albert Morris v. K. Chandrasekaran and Ors., [(2006) 1 SCC 228], the Supreme Court held that a right in law exists only and only when it has a lawful orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, in place of Modi Distillery . Furthermore, the legal infirmity is of such a nature which could be easily cured... 18. What is discernible from the U.P. Pollution Control Board s case is that easily curable legal infirmity could be cured by means of a formal application for amendment. If the amendment sought to be made relates to a simple infirmity which is curable by means of a formal amendment and by allowing such amendment, no prejudice could be caused to the other side, notwithstanding the fact that there is no enabling provision in the Code for entertaining such amendment, the Court may permit such an amendment to be made. On the contrary, if the amendment sought to be made in the complaint does not relate either to a curable infirmity or the same cannot be corrected by a formal amendment or if there is likelihood of prejudice to the other side, then the Court shall not allow such amendment in the complaint. 58 The Supreme Court in Delhi Administration vs. Gurdip Uban and others [(2007) 7 SCC 296] has explained the principle of doing something indirectly which is otherwise not permitted. The said principle has been explained in para 17 observing thus: 17. . . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned order. 2. Two main contentions have been advanced by learned counsel for quashing the order. The first is that since there is no provision in the Act for impleading a new accused in the case, the court cannot have recourse to the general provisions contained in the Code of Criminal Procedure, 1973 (for short the Code ). Even otherwise Section 142 of the Act makes it clear that the prosecution proceedings contemplated therein are either untrammelled or unaided by anything contained in the Code, contended counsel. The second contention is that the court is debarred from taking cognizance of the offence against the firm after the 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. 3. Section 142 of the Act reads as follows : Cognizance of offences.Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), (a) no court shall take cognizance of any offence punishable under Section 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 ; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the offence was taken, subsequent impleadment of any other person as accused would not affect the judicial process already adopted in taking cognizance of the offence. 7. In the aforesaid context, a reference to Section 319 of the Code, is necessary. Under Subsection (1), the court is given power to proceed against any other person who appears to have committed any offence for which such person could be tried together with the accused already arraigned in the case. Once the court decides to proceed against such other person then Subsection (4) will save the earlier act of taking cognizance of the offence. Subsection (4) says that the case may proceed as if such person had een an accused person when the court took cognizance of the offence upon which the inquiry or trial was commenced . Hence the stage at which the new accused was brought in the array of the accused has no legal impact on the proceedings. 8. In the result, I dismiss both criminal miscellaneous cases in limine. 60 In M/s. Plywood House (supra), one of the submissions before the learned Single Judge of the Kerala High Court on behalf of the petitioner was that since there was no provision in the N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed by the Supreme Court in State of Orissa vs. Sudhansu Sekhar Misra (AIR 1968 SC 647 vide para 13): A decision is only an authority for what it actually decides. What is of the essence in a decision is its ratio and not every observation found therein nor what logically follows from the various observations made in it. On this topic this is what Earl of Halsbury, LC said in Quinn v. Leathem, 1901 AC 495: Now before discussing the case of allen v. Floo (1989) A 1 and what was decided therein, there are two observations of a general character which I wish to make, and one is to repeat what I have very often said before, that every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ose, to think, decide or believe on considerations; to account, to regard; to adjudge or decide; to conclude upon consideration. (see Major Law Lexicon by P.Ramanatha Aiyar, 4th Edition 2010 Vol.2) 68 In this connection, I deem it necessary to consider few precedents on the true meaning of the word deemed and deeming fiction . 69 In Consolidated Coffee Ltd. v/s. Coffee Board, Bangalore, reported in AIR 1980 SC 1468, the purpose of the word deemed occurring in Section 5(3) of the Central Sales Tax Act, 1956 came for consideration. The issue that emanated was whether a legal fiction had been created by use of the word deemed . It is fruitful to reproduce what has been exposited by Their Lordships: A deeming provision might be made to include what is obvious or what is uncertain or to impose for the purpose of a statute an artificial construction of a word or phrase that would not otherwise prevail, but in each case it would be a question as to with what object the legislature has made such a deeming provision. In St. Aubyn and Ors. v/s. Attorney General, 1952 A.C. 15 at p.53 Lord Radcliffe observed thus: The word deemed is used a great deal in modern legislat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tood. It is because in modern legislation, the term deemed has been used for manifold purposes. The object of the Legislature has to be kept in mind. (See Andaleeb Sehgal v/s. Union of India and another, AIR 2011 Delhi 29(FB)). 72 I am of the view that by virtue of a legal fiction, it cannot be said that on the date of filing of the complaint, the Court was justified in taking cognizance and issue process against the partners in the absence of the legal entity and no fault could be found so far as the legality and validity of the cognizance is concerned. The legal fiction is altogether for a different purpose and it should not be brought in aid of curing a serious defect or infirmity in the complaint or the order taking cognizance. When Subsection (4)(b) of Section 319 of the Code says that it will be presumed that the newly added person had been an accused person when the Court took cognizance of the complaint upon which the inquiry or trial was commenced, the same indicates that the Court is not empowered to take cognizance of any fresh offence if any accused is impleaded by invoking Section 319 and the newly added accused could be tried only for the offence already taken cogn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The view taken by the learned Single Judge of the Madras High Court is quite commendable, and I propose to adopt the same line of reasoning. 75 Suryanarayan (supra) later came to be followed by the Madras High Court in the case of Anandan v. Arivazhagan [1999 (96) Company case 503]. A learned Single Judge observed in paras 7, 8 and 9 as under: 7. It is not in dispute that the cheque was issued by the first petitioner as managing partner of K. S. Muthu Constructions for the liability to the complainant. Learned counsel, Mr. Dhanyakumar, relying upon certain decisions of the Kerala High Court, would contend that when the court has taken cognizance of the offence against a partner, it will not affect the proceedings for the failure to implied the other accused including the company. In Alex v. Vijayan [1994] 81 Comp Cas 910 (Ker); [1993] MWN 192, the Kerala High Court has held that when the managing partner of a firm w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... next point with regard to the curable aspect of the defect in the complaint, by invoking Section 319 of the Code of Criminal Procedure, this court, in the above decision, following the view taken by the apex court in Delhi Municipality v. Ramkishan, , has held that when the complaint has the initial defect in its sustainability, the defect cannot be cured by amending the proceedings under Section 319 of the Code of Criminal. Procedure will not come to the rescue for such defects. Learned counsel for the respondent cited the decision of the apex court in U.P. Pollution Control Board v. Modi Distillery, to support his argument for the right to amend the complaint. This decision also has been distinguished in the above decision of this court and this court has held that the amendment to implied the company cannot be ordered. Therefore, as the view of this court is that the company or partnership cannot be subsequently impleaded to set right the defect in the proceedings, the respondent/complainant is not entitled to seek for amendment of the complaint. So, as on today, the proceedings under Section 138 of the Negotiable Instruments Act against the petitioners is defective for the nonp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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