N. HARIHARA KRISHNAN versus J. THOMAS

Citation: [2017] 9 S.C.R. 324 · Decided: 30-08-2017 · Supreme Court of India · Bench: JASTI CHELAMESWAR · Disposal: Appeal(s) allowed
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Judgment (excerpt)

A 
B 
[2017] 9 S.C.R. 324 
·N. HARIHARA KRISHNAN 
v. 
J. THOMAS 
(Criminal Appeal No. 1534 of2017) 
' 
AUGUST 30, 2017 
[J. CHELAMESWAR ANDS. ABDUL NAZEER, JJ.] 
Negotiable instruments Act, 1881: 
ss. 138, 141 and 142 - Complaint u!s. 138 - During the 
trial application u/s. 319 Cr.P.C. to imp/eadlsummon a Company 011 
C the ground that the complainant/applicant came to know the fact 
that the Compa11y was the drawer of the disho11oured cheque and 
the accused was only a signatory - Application was allowed by 
trial cou,.t and further affirmed by High Court - On appeal, held: 
The application u!s. 319 Cr.P. C was only a device by which the 
D complaina11( sought to initiate prosecution u/s. 138 against the 
Company beyond the period of limitatio11 as stipulated in 1881 Act 
- No doubt s. 142 authorises the court to condone the delay i11 
appropriate cases - In the facts of the present case, there is no 
reason to co11done the delay - Code of Criminal Procedure, 1973 -
s. 319. 
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s. 138 - Prosecution under - Distinction from the prosecutio11 
under Cr.P.C. - Discussed - Code of Criminal Procedure, 1973. 
s. 138 - Offe11ce u11der s. 138 - Cog11izance of- Whether 
cognizance is taken of the offence and not the offender - Held: 
Offence uls. 138 is person specific - Under the scheme of s. 138, 
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there cannot be prosecution without an accused - Failure to comp(v 
with any one of the steps contemplated uls. 138 would not provide 
cause of action for prosecution - The complaint should contain all 
the necessary factual allegations - Disclosure of name of the person 
d,.mving the cheque is one of the factual ingredients - Therefore, in 
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the context of prosecution u!s. 138, the concept of taking cognizance 
of the offence, but not the offender, is not appropriate. 
Allowing the appeal, the Court 
HELD: 1. The High Court failed to appreciate that the 
liability of the appellant (if any in the context of the facts of the 
H present case) is only statutory because of his legal status as the 
324 
N. HARIHA:RA KRISHNAN v: t THOMAS 
325 
Director of the Company. Every person signing a cheque on A 
behalf of a company on whose account a cheque is drawn does 
not become the drawer of the cheque. Such a signlitory i.s only a . 
person duly authorised to sign the cheque on behalf of the 
company/drawer of the cheque. If the Company/drawer of the 
cheque is sought to be summoned for being tried for an offence 
under Section 138 of the Negotiable Instruments Act, 1881 B 
beyond the period of limitation prescribed under the Act, the 
appellant cannot be to.Id that he can make no grievance of that 
fact on the ground that the Company did not make any grievance 
of such summoning. It is always open to the Company to raise 
the defense that the initiation of prosecution against it is barred C 
by limitatio~1. The Company need not necessarily challenge the 
summoning order. It can raise such a defe!Jse in the course of 
trial. !Para 20)(336-G-H; 337-A-B] 
2.1 The view of the High Court that only the offence is 
taken cognizance of ancl there is no need to take cognizance of . 0 
an offence accused~wise is an errom·ous view in the context of a 
prosecution under the Act. The logic of the High Court that since· 
the offence is already taken cognizance of, there is no need to · 
take cognizance of the offence against the Company is flawed. 
Section 141 of the Act stipulates the liability for the offence 
punishable under Section 138 when the person committing such 
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an offence happens to be a company. [Paras 20, 21](336-A-B; 
337-C) 
2.2 The scheme of the prosecution in punishing under 
Section 138 of the Act is different from the scheme of the CrPC. 
Section 138 creates an offence and prescribes punishment. No 
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procedure for the investigation of the offence is contemplated. 
The prosecution is initiated on the basis of a written complaint 
made by the payee of a cheque. Obviously such complaints must 
contain the factual allegations constituting each of the ingredients 
of the offence under Section 138. Those ingredients are: (1) that 
a person drew a cheque.on an account maintained by him with G 
the banker; (2) that such a cheque when presented to the bank is 
returned by the bank unpaid; (3) that such a cheque was presented 
to the bank within a period of six mo.nths from the date it was 
drawn or within the period of its validity whichever is earlier; (4) 
that the payee demanded in writing from the drawer of the cheque H 
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