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2024 Supreme(All) 2454

IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD
ARUN KUMAR SINGH DESHWAL, J.
Smt Maya Rani Rao – Appellant
Versus 
State Of U.P And 2 Others – Respondents 
Application U/S 482 No.35434 of 2024
Decided on : 28-11-2024

Advocates Appeared:
For the Appellant : Sangeeta Shukla,Sushil Kumar Chaturvedi
For the Opposite Party : G.A.

Prosecution under Section 138 N.I. Act necessitates the company as the primary accused, without which proceedings against individuals related to the company are invalid.

Headnote:(A) Negotiable Instruments Act, 1881 - Sections 138, 141, 142 - Quashing of order rejecting application under Section 319 Cr.P.C. - The cheque issued on behalf of a company was not impleaded as an accused in the complaint, making the complaint defective in light of the Apex Court ruling in Aneeta Hada vs. M/S God Father Travels and Tours Pvt. Ltd. (2012) 5 SCC 661. The maintainability of summoning additional accused under Section 319 is questioned when the company was not initially named, thus requiring fresh cognizance. (Paras 5, 10-12)

(B) Legal principle established - For prosecution under Section 138 N.I. Act, it is imperative to implead the drawer company as the primary accused. The failure to do so renders the complaint against its directors or officers untenable. (Paras 11-12)

(C) The court reaffirmed that the absence of a notice to the company further restricts maintaining the prosecution against individuals connected to the company, marking all subsequent actions invalid. (Paras 20-22)

Facts of the case:
The applicant filed for quashing an order rejecting her application to summon a company as an accused post-filing a complaint regarding a bounced cheque issued under the company's name, alleging non-inclusion of the company as a party originally due to oversight.

Findings of Court:
The court reiterated that an application under Section 319 Cr.P.C. is not maintainable when the primary accused, the company, is absent from the complaint; thus, all actions against the director become irrelevant.

Issues: Whether the application under Section 319 Cr.P.C. can successfully summon a company that was not initially included despite a cheque bounce, and the conditions necessary for maintaining such a prosecution.

Ratio Decidendi: The high court concluded that a complaint lacking the company as an accused cannot move forward, as all essential conditions were not met, particularly regarding notice and acknowledgment of the cheque.

Result: Application dismissed.

Table of Content
1. introduction and application for quashing. (Para 1 , 2)
2. fact background of the cheque issuance and complaint process. (Para 3)
3. arguments regarding non-impleadment of company. (Para 4 , 5)
4. court's observations on maintainability of application. (Para 6 , 8 , 9 , 11 , 12)
5. legal standards for issuing demand notices. (Para 13 , 14 , 15 , 16 , 17)
6. invalidity of proceedings when initial action is not lawful. (Para 18 , 19 , 20)
7. court's review of section 319 cr.p.c. application. (Para 21 , 22 , 23)
8. permissible amendment in complaint under n.i. act. (Para 24 , 25 , 26)
9. failure to properly explain delay in impleading company. (Para 27 , 28)
10. conclusion: rejection of application. (Para 29)

JUDGMENT :

Arun Kumar Singh Deshwal, J.

1. Heard Sri Sushil Kr. Chaturvedi, learned counsel for the applicant and Sri Uday Bhan, learned A.G.A. for the State.

2. The instant application has been filed seeking quashing of the impugned order dated 10.9.2024 passed by Presiding Officer, Special Judge, N.I. Act, Agra in application dated 2.7.2024, under Section 319 Cr.P.C. in Complaint Case No. 2186 of 2017 (Maya Rani vs. Ram Autar), under Section 138 N.I. Act, P.S. Jagdishpura, District Agra. Further prayer is to summon the opposite party No.3/company for facing trial.

3. Facts giving rise to the present case are that a cheque dated 16.12.2016 for the amount of Rs.26,37,100/- was issued on behalf of the company M/s Anupam Omarion Infrastructure (India) Pvt. Ltd. by opposite party No.2 being its director as well as authorized signatory. That cheque was presented before the bank on 16.12.2016, but the same was returned on 8.3.2017 with the endorsement "fund insufficient", thereafter the applicant sent a notice to opposite party No.2 as well as the company (opposite party No.3) on 31.3.2017. However, despite expiry of 15 days from the date of receiving the notice, the cheque amount was neither paid by opposite party No.2 nor by opposite party No.3. Thereafter, the complaint was filed on 24.4.2017, impleading opposite party No.2 as proprietor of opposite party No.3. It is undisputed that respondent No.3 (company) was not arraigned as accused in the complaint. After perusal of the record, learned Magistrate took cognizance on 22.6.2017 and summon was issued to opposite party No.2. After conclusion of evidence of the applicant and an application under Section 319 Cr.P.C. was filed by the applicant on 2.7.2024 to summon opposite party No.3 on the ground that by mistake the opposite party No.3 could not be impleaded at the time of filing the complaint though the cheque in question was issued on behalf of the company. However, that application was rejected by the court below by impugned order dated 10.9.2024 which has been challenged in the present application.

4. Contention of learned counsel for the applicant is that the applicant is the complainant in the complaint in question and she could not implead the company but impleaded its proprietor at the time of filing the complaint in the year 2017. When this fact came into the knowledge of the applicant in the year 2024, then she filed an application under Section 319 Cr.P.C. to summon the company, namely, M/s Anupam Omarion Infrastructure (India) Pvt. Ltd. on the ground that by mistake it could not be impleaded as a party along with its proprietor and that application was rejected by the court below by the impugned order. It is further submitted that after bouncing of the cheque, issued on behalf of the company, though the applicant sent a demand notice to the company as well as its proprietor, but by mistake she could not implead the company as a party. Therefore, the court below erroneously rejected her application under Section 319 Cr.P.C. for summoning the company as additional accused.

5. Per contra, learned A.G.A. submitted that when the applicant has not impleaded the company on whose behalf the cheque in question was issued, then the complaint itself is defective in view o

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