You can't add accused in 138 later and amend the complaint. It's not permissible in law
NI act
Complainant filed a case against accused one is firm and another is firm represented by its managing partner Mr.X(issued the cheque infavour of complainant) under sec.138 of NI act. Two more partners are left out which was not included at the time of filing. Now Mr.X is died on a year back. Can we amend the complaint by adding the left out partners at any stage of the case? Is there any latest judgement available for adding the left out partners? Imp Note : Mr.X executed the partnership deed between his mother and his wife for the firm. Hon'ble Judge enquires about the latest judgment for adding the partners. Honble Judge is stating that "based on cheque only the competent authority who are all holding the banking operation can be added but not partners" How to convince these ? Is this correct ?
Asked 5 years ago in Criminal Law
Religion: Hindu
8 Answers
Section 141 of the Negotiable Instruments Act deals with the offence of cheque bounce by a company or Partnership and provides vicarious liability on every person who is in charge of the conduct of the business when the offence was committed.
Section 141 of the NI Act, 1881 states that
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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:
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Provided that nothing contained in this sub-section 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.
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Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved 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 officers of the company, such director, manager, secretary or other officers shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
As per the cheque bounce laws, every person who is connected with the partnership will not fall within the ambit of Section 141 of the NI Act. It is only applicable over those persons who were in charge of and responsible for the conduct of the business of the partnership at the time of cheque bounce.
If a person, who was not in charge of and was not responsible for the conduct of the business of the company at the relevant time, he/she cannot be held liable for a crime committed by the persons who were in charge of the conduct of the business. The liability in ca cheque bounce arises from being in charge of and responsible for the cheques from the partnership at the time when the cheque bounce offence was committed and not on the basis of merely holding a designation or office in a partnership.
The Gujarat High Court has also held that not all partners are liable for the bouncing of a cheque and the liability is upon only those partners who were responsible to the partnership and in charge of the partnership when the offence was committed.
The Supreme Court has further held that there may be sleeping partners who are not required to take any part in the business of the firm; they may be ladies and others who may not know anything about the business of the firm. The primary responsibility is on the complainant to make necessary averments in the complaint so as to make the accused vicariously liable. For fastening the criminal liability, there is no presumption that every partner knows about the transaction.
- On reading of the provisions, it is apparent that Section 141 of NI Act deals with the offences committed by the companies and says that if an offence is committed by a company under Section 138 of the Act, every person, at the time, the offence was committed, was in-charge and responsible to the company in the conduct of the business of the company, is liable along with the company to be proceeded against and punished accordingly.
- In the case of Aneeta Hada v. Godfather Travels & Tours (P) Ltd.[2] the Supreme Court has held that there cannot be any vicarious liability unless there is prosecution against the company.
- In the case of M.S. Pharmaceuticals Corporation Ltd v/s Neeta Bhalla & Anr[3], National Small Industries Corporation Ltd v/s Harmeed Singh Paintal & Anr[4], and K.K. Ahuja v/s V.K. Vora & Anr[5], the Supreme Court had explained the necessity of specific averment in the complaint regarding the company and that director/ managing director/ joint managing director/ other employees of the company cannot be prosecuted under Section 138 of the NI Act unless the company is impleaded as an accused.
You cannot amend complaint by adding names of partners left out earlier
better option is to file summary suit against firm , partners to recover your dues
1. The accused who have been left out cannot be added without the leave of the court.
2. The complainant can file an application under Section 319 Cr.P.C to summon the left out partners.
1. If it was a partnership firm then you should have added all partners and if any partner was not involved in the business then onus was upon him to prove this fact.
2 . So it was your mistake in not doing so. There are many decisions which allows amendment of cause title of thus nature. Ask your advocate for the same.
As the Firm is an accused, all the partners are equally liable for the same.
if the court convicts the firm then it will consider that all the partners of the firm are convicted and they have to pay the cheque amount/fine and compensation as per section 357 of Cr.P.C.
the Hon'ble Supreme Court discussed the scope of amendment of criminal complaint was U.P Pollution Control Board v. Modi Distilleries, (1987) 3 SCC 684. Therein, the name of the accused company was wrongly mentioned in the complaint as Modi Distilleries instead of Modi Industries Limited, which was sought to be amended. The Hon'ble Supreme Court, considering the same as a mere curable legal infirmity observed, ".....furthermore the infirmity is one which could be easily removed by having the matter remitted to the Chief Judicial Magistrate with a direction to call upon the appellant to make the formal amendments to the averments contained in paragraph 2 of the complaint so as to make the controlling company of the industrial unit figure as the concerned accused in the complaint. All that has to be done is the making of a formal application for amendment by the appellant for leave to amend by substituting the name of Modi Industries Limited, the company owning the industrial unit, in place of Modi Distillery... Furthermore, the legal infirmity is of such a nature which could be easily cured." Clearly, as per the Hon'ble Supreme Court, an easily curable legal infirmity in complaint can be permitted to be cured by means of a formal application of amendment.
In S.R. Sukumar v. S. Sunaad Raghuram, (2015) 9 SCC 609, the Hon'ble Supreme Court relying on the aforesaid judgment, held, "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." In fact, in the instant case, despite noting that the amendment sought to be made in the complaint was not formal in nature but substantial, the Hon'ble Supreme Court, upheld the order(s) of the Courts below permitting the amendment to the complaint. The factors which weighed with the Hon'ble Court while passing its decision were that in the instant case neither the cognizance of the offence was taken nor summons issued. Further, the Hon'ble Court observed that the amendment sought to be made did not change the original nature of the complaint and no prejudice was caused to the accused by amendment in question. In fact, as per the Hon'ble Court, such amendment was necessary to avoid multiplicity of proceedings.
Further considering the fact that a Magistrate takes cognizance of an offence and not the offender under Section 190 CrPC, the Hon'ble Bombay High Court, in Mr. Amol Shripal Sheth v. M/S. Hari Om Trading Co. & Ors., (2014) 6 MhLJ 222, held that where the name of an accused is wrongly mentioned in the complaint4, complainant may be permitted to amend his complaint. As per the Hon'ble Court, Magistrate has "incidental and ancillary power to the main power of taking cognizance of offence to allow such amendment" and that such "power can be exercised before and after taking cognizance of the offence."
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 sub-section 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: 22 [Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.]
(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved 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. Explanation.— For the purposes of this section,—
(a) “company” means any body corporate and includes a firm or other association of individuals; and
(b) “director”, in relation to a firm, means a partner in the firm.]
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Dear Sir,
However the accused who signed the cheque died, but the accused No. 1 which is firm is still subsisting and the it is managed by other partners and hence they are able to be impleaded as parties.
As the partnership firm issued the cheque which bounced, your remedy will lie against the firm as such, and not against individual partners constituting it. In your case, the managing partner who signed the cheque on behalf of the firm shall alone be liable. Other partners will be liable if only they have personally guaranteed the payment/repayment.
