Summary
The Court rejected belated addition of the company that drew a dishonoured cheque to a prosecution initially brought only against its alleged director-signatory. Company arraignment was essential to the asserted vicarious liability, and Section 319 could not bypass the Negotiable Instruments Act’s complaint and limitation requirements. The claimed late discovery of the company’s identity was false on the cheque and prior notice; no delay condonation was justified.
Issues
- Whether cognizance against the director allowed the company to be added later without meeting the Act’s limitation requirements.
- Whether the director could challenge that addition and whether delay should be condoned.
Provisions considered
- Sections 138, 141 and 142, Negotiable Instruments Act, 1881The reproduced offence, corporate-liability and cognizance provisions required the drawer company to be prosecuted and the statutory complaint framework satisfied, subject to justified condonation. (¶¶ 12, 18–24, 26)
Held
- A person signing for a company is not thereby the drawer in his personal capacity. The company is the drawer, and prosecution of the alleged director under Section 141 depended on arraigning it as required by Aneeta Hada. The director could challenge the belated summoning even though the company itself had not sought revision. (¶ 20–21)
- The ordinary proposition that cognizance concerns an offence rather than an offender could not bypass the special person-specific complaint scheme under Sections 138 and 142. The complaint had to identify the drawer and allege all statutory ingredients. (¶ 18–24)
- The Section 319 application was a device to initiate prosecution against the company outside the prescribed time. Neither lower court had examined sufficient cause, and the Supreme Court found none: the company’s identity appeared on the cheque and the complainant had admittedly served it statutory notice. (¶ 25–26)
- The judgment upholding addition of the company was contrary to the statutory framework and Aneeta Hada and could not stand. (¶ 27)
Result
Appeal allowed; impugned judgment set aside, with costs quantified at Rs 1 lakh.