Holding

Section 319 CrPC may be exercised only when evidence adduced during trial establishes that the person has committed the offence and can be tried with the existing accused; a mere registration document is insufficient, and partner liability under Section 141 NI Act requires proof of control over the firm at the time of the offence.

Summary

A complaint under Section 138 of the Negotiable Instruments Act was filed against a partnership firm and its two partners. The complainant later applied under Section 319 of the Code of Criminal Procedure to join two additional partners as co‑accused, relying solely on the firm's registration document that listed them as partners. The Judicial Magistrate ordered their addition and the Gujarat High Court upheld that order. On appeal, the Supreme Court held that the High Court failed to examine whether the registration document qualified as "evidence" within the meaning of Section 319 and whether the partner was in charge of the firm at the time of the offence, a requirement under Section 141 of the NI Act. The Court reiterated that Section 319 is an extraordinary power that can be exercised only when trial evidence establishes the person's guilt and that a fresh trial must be conducted for the newly added accused. Consequently, the appeals were allowed, the High Court’s order was set aside, and the criminal miscellaneous applications were restored for rehearing.

Issues considered

Whether Section 319 CrPC can be invoked to join a partner as accused solely on the basis of the firm's registration document.
Whether the registration document constitutes "evidence" under Section 319 for the purpose of adding an accused.
Whether a partner can be held liable under Section 141 of the Negotiable Instruments Act without proof that he was in charge of the firm at the time of the offence.
Whether the High Court correctly considered the mandatory fresh‑trial requirement under Section 319(4).
Whether the Magistrate’s order to join the partners was valid in view of the evidentiary requirements of Section 319.

Legislation cited

Code of Criminal Procedure, 1973s. 319, s. 482
Indian Penal Code, 1860s. 114, s. 420
Negotiable Instruments Act, 1881s. 138, s. 141

Subjects

Section 319 CrPCpartner liabilityNegotiable Instruments Actcriminal procedureaddition of accusedevidencefresh trialextraordinary judicial power

Judgment

[2011] 9 S.C.R. 1138

A SAROJBEN ASHWINKUMAR SHAH <"
v.
STATE OF GUJARAT AND ANR.
(Criminal Appeal No. 1554-1557 of 2011)
AUGUST 10, 2011
B
[AFTAB ALAM AND R.M. LODHA, JJ.]

Code of Criminal Procedure, 1973 - s. 319 - Power to
proceed against other persons appearing to be guilty of
c offence - On facts, complaint uls. 138 Negotiable Instruments
Act against a firm and its partners - Subsequently, application
u/s. 319 for joining appellant and one other person as co-
accused in the complaint, on basis of document (copy of
registration of the firm) whereby the proposed accused were
D shown as partners of the firm - Direction by Judicial
Magistrate to join them as co-accused - Said order upheld
by the High Court - On appeal, held: High Court failed to
consider whether the Magistrate had addressed to the
essential aspects before invoking power u/s. 319 - A/so the
E High Court did not advert to the question whether or not filing
of copy of registration of the firm by its partners would be
covered by expression in the course of inquiry into or trial and
evidence occurring ins. 319 which would also show that the
appellant committed the offence - With regard to the criminal
F liability of a partner in the firm, there has to be evidence that
when the offence was committed, the partner was in-charge
of and was responsible to the firm for the conduct of the
business of the firm - High Court did not consider these
aspects -· Thus, matter remitted back to the High Court for
reconsideration - Negotiable Instrument Act, 1881 - ss. 138
G and 141.
...
Code of Criminal Procedure, 1973 - s. 319 - Power
under - Ambit and scope of - Explained.

H 1138
SAROJBEN ASHWINKUMAR SHAH v. STATE OF 1139
GUJARAT' AND ANR.
-'
~ Respondent No. 2 filed a complaint against a A
partnership firm and its two partners-accused no. 2 and
3, before the Judicial Magistrate, alleging commission of
offence under Section 138 of the Negotiable Instruments
Act, 1881 and under Section 114 of the Penal Code, 1860.
Subsequently, the complainants filed an application
-· under Section 319 of the Code of Criminal Procedure,
B
1973 for joining two other partners • 'PL' and appellant,
.~ as accused no. 4 and accused no. 5 respectively. It was
averred that accused nos. 2 and 3 submitted a copy of
the registration of the firm wherein proposed accused no.
4 and 5 were shown as partners of the firm. The Judicial
c
Magistrate directed that 'PL' and the appellant be joined
as accused no. 4 and 5. The High Court upheld the order.
Thus, the appellant filed the instant appeal.

Allowing the appeals, the Court D

HELD: It would transpire from the order of the High
Court that after noticing the provisions contained in
Section 319 Cr.P .C. and its scope, the High Court
proceeded to hold that the order of the Magistrate did not E
call for any interference. The High Court, however, failed
to consider whether Magistrate has addressed to the
essential aspects before invoking his power under
Section 319 of the Code. Moreover, the High Court did not
advert to the question whether or not filing of copy of
F
registration of the firm by Accused Nos. 2 and 3 would
' be covered by expressions 'in the c.ourse of any inquiry
into or trial' and 'evidence' occurring in Section 319 of the
Code and also the aspect as to whether such document
could be treated as an evidence to show that !he
G
appellant (newly added accused) has committed an
_.>
offence of cheating under Section 420 IPC. As regards
the criminal liability of a partner in the firm, in light of the
provisions contained in Section 141 of the Act, there has
to be evidence that at the time the offence was
H
1140 SUPREME COURT REPORTS [2011] 9 S.C.R.

A committed, the partner was in-charge of and was
responsible to the firm for the conduct of the business
of the firm. A perusal O·f the impugned order would show
that all these relevant aspects have not been considered
by the High Court at all and the petitions under Section
8 482 of the Code were dismissed. As the matter needs to
be considered by the High Court afresh, the orders of the
Magistrate is not dealt with on merit lest it may prejudice
the consideration of the petitions under Section 482 of
the Code before the High Court. The impugned order is
C set aside. Criminal Miscellaneous Application are restored
to the original number for hearing and reconsideration by
the High Court in accordance with law. [Paras 17 and 18]
[1150-B-G]
Joginder Singh and Anr. v. State of Punjab and Anr.
D (1979) 1 SCC 345: 1979 (2) SCR 306; Municipal
Corporation of Delhi v. Ram Kishan Rohtagi and Ors. (1983)
1 SCC 1: 1983 (1) SCR: 884; Michael Machado and Anr. v.
Central Bureau (2000) 3 SCC 262: 2000 (1) SCR 981;
Shashikant Singh v. Tarkeshwar Singh and Anr. (2002) 5
E SCC 738: 2002 (3) SCR 400; Krishnappa v. State of
Karnataka (2004) 7 SCC 792: 2004 (3) Suppl. SCR 894;
Palanisamy Gounder and Anr. v. State represented by
Inspector of Police. (2005) 12 SCC 327; Guriya. alias
Tabassum Tauquir and Ors. vs. State of Bihar and Anr. (2007)
F 8 SCC 224: 2007 (10) SCR 385 - referred to.
Case Law Reference:
1979 (2) SCR 306 Referred to Para 9
•1953 (1) SCR 884 Referred to Para 10
G
2000 (1) SCR 981 Referred to Para 11
2002 (3) SCR 400 Referred to Para 12
2004 (3) Suppl. SCR 894 Referred to Para 13
H
SAROJBEN ASHWINKUMAR SHAH v. STATE OF 1141
GUJARAT AND ANR.
.) ;

(2005) 12 sec 321 Referred to Para 14 A
2007 (10) SCR 385 Referred to Para 15

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
No. 1554-1557 of 2011.
.J
B
From the Judgment and Order dated 05.05.201 O of the
High Court of Gujarat at Ahmedabad in Criminal Appeal Nos.
5157, 5158, 5159 and 5160 of 2000.

-'( Huzefa Ahmadi, Pradhuma Gohil, Vikas Singh, S. Hari
Haran and Jayesh Bhairaria (for Charu Mathur) for the c
Appellant.

Sanjoy Ghose (for Anitha Shenoy) Jesal and Hemantika
Wahi for the Respondents.
D
The Judgment of the Court was delivered by

R.M. LODHA, J. 1. Leave granted.

2. These four appeals, by special leave, are directed
against the common order of the Gujarat High Court whereby E
single Judge of that Court refused to interfere with the orders
(all dated July 11, 2000) of the Judicial Magistrate First Class,

. . Prantij directing addition of the present appellant as an
accused (Accused No. 5) in various complaints .
F
3. For the sake of brevity and convenience, we shall refer
to the facts from the appeal arising from complaint (Criminal
Case no. 1132 of 1999) pending in the Court of Judicial
Magistrate First Class, Prantij. Respondent no. 2-Gulamnabi
Hebatkhan Sumara - filed a complaint against (i) M/s. Rashmi
G
Builders, a partnership firm, (ii) Ashwinkumar Tribhovandas
' f
Shah and (iii) Chandravadan Gopaldas Thakkar in the Court
of Judicial Magistrate, First Class, Prantij. It was alleged in the
complaint that M/s. Rashmi Builders (Accused No. 1) is a duly
I registered partnership firm and Ashwinkumar Tribhovandas
Shah (Accused No. 2) and Chandravadan Gopaldas Thakkar H
1142 SUPREME COURT REPORTS [2011] 9 S.C.R.

A (Accused No. 3) are its partners. On the recommendation and
advise of one Balkabhai alias Himatlal Dwarkadas Lal, a
financial broker, the complainant lent and advanced a sum of
Rs. 5 lakhs to the firm. The firm through its partner Ashwinkumar
Tribhovandas Shah acknowledged the receipt of the said
3 amount and also executed and delivered a promissory note for
Rs. 5 lakhs on the same date. Later in discharge of its liability,
the firm through its partner (Accused No. 2) issued a cheque
for Rs. 5 lakhs drawn on the Federal Bank of India, Fort Branch,
Bombay and delivered the same to Balkabhai alias Himatlal I
c Owarkadas Lal who handed over the said cheque to the
complainant along with the promissory note. The complainant
presented the said cheque for encashment on May 31, 1999
with his Banker but the same was dishonoured on June 3, 1999
with the remark "account closed". The complainant then sent a
statutory notice of 15 days to the firm and its two partners which
0
was received by them on or about June 23, 1999. The accused
failed and neglected tc>" make payment within the statutory
period and instead in its reply dated June 29, 1999, the firm
denied having entered into any financial transaction with the
E complainant. The complainant thus alleged that the accused
have committed offencE~ under Section 138 of the Negotiable
Instruments Act, 1881 (for short, 'N.I. Act') and under Section
420 and Section 114 of the Indian Penal Code. The other
complaints were lodgE~d by Usmanmiya Nanumiya Ghori,
Mohamad Umarkhan Akbarkhan Ghori and Oaudbhai
F Rasulbhai Mansuri against the above three accused on the
identical facts.

4. The Judicial Magistrate, First Class, Prantij took
cognizance in the aboVE! complaints against the three accused,
G namely, (i) M/s. Rashmi Builders (a partnership firm), (ii)
Ashwinkumar Tribhovandas Shah and (iii) Chandravadan
Gopaldas Thakkar.

5. On November 4, 1999, the complainant in each of the
H complaints made an application under Section 319 of the Code
SAROJBEN ASHWINKUMAR SHAH -v. STATE OF 1143
GUJARAT AND ANR. [R.M. LODHA, J.]
~

of Criminal Procedure, 1973 (for short, 'the Code') for joining A
Paresh Lakshmikant Vyas and Sarojben Ashwinkumar Shah
(appellant herein) as Accused Nos. 4 and 5 respectively. It was
averred that Accused Nos. 2 and 3 have submitted a copy of
. the registration of the firm-Mis. Rashmi Builders (Accused No .
1) wherein the proposed Accused No. 4 and Accused No. 5 B
have been shown as the partners of the firm and in this view of
the matter, it was prayed that complainant may be permitted
to join them as accused.

6. The Judicial Magistrate First Class, PrantiJ; as noted
above, has directed that Paresh Lakshmikant Vyas and c
Sarojben Ashwinkumar Shah (appellant herein) be joined as
Accused Nos. 4 and 5 and the High Court maintained such
direction.

7. Section 319 of the Code reads as under: D
"S. 319. Power to proceed against other persons
appearing to be guilty of offence.-(1) Where, in the
course of any inquiry into, or trial of, an offence, it appears
from the evidence that any person not being the accused
E
has committed any offence for which such person could
be tried together with the accused, the court may proceed
against such person for the offence which he appears to
.; have committed .

(2) Where such person is not attending the court, he may F
be arrested or summoned, as the circumstances of the
case may require, for the purpose aforesaid.

(3) Any person attending the court although not under arrest
or upon a summons, may be detained by such court for G
.> ! the purpose of the inquiry into, or trial of, the offence which
he appears to have committed.
(4) Where the court proceeds against any person under
sub-section (1), then-
H
1144 SUPREME COURT REPORTS [2011] 9 S.C.R.

A (a) The proceedings in respect of such person shalt
be commenced afresh, and witnesses re-heard:

'' (b) Subject to the provisions of clause (a), the case
may proceed as if such person had been an
accused person when the court took cognizance of
B the offence upon which the inquiry or trial was
commenced."

8. The ambit and scope of the power of the Court under
Section 319 of the Code has come up for consideration before
C this Court on more than one occasion.

9. In Joginder Singh and Another v. State of Punjab and
Another1, this Court stated that the power conferred under
Section 319(1) of the Code is applicable to all courts including
0 a Sessions Court and the Court has power to add any person,
not being the accused before it, against whom there appears
during trial sufficient evidence indicating his involvement in the
offence, as an accused and direct him to be tried along with
the other accused.
E 10. In the case of Municipal Corporation of Delhi v. Ram
Kishan Rohtagi and Others, 2 this Court (at page 8) held as
under:
"19. In these circumstances, therefore, if the prosecution .
F can at any stage produce evidence which satisfies the court
that the other accused or those who have not been arrayed
as accused against whom proceedings have been
quashed have also committed the offence the Court can
take cognizance against them and try them along with the
G other accused. But, we would hasten to add that this is
really an extraordinary power which is conferred .on the
court and should be used very sparingly and only if
compelling reasons exist for taking cognizance against the
1. (1979) 1 sec 345.
H 2. (1983) 1 sec 1.
SAROJBEN ASHWINKUMAR SHAH v. STATE OF 1145
GUJARAT AND ANR. [R.M. LODHA, J.]
_)
' other person against whom action has not been taken. f.l
More than this we would not like to say anything further at I
this stage. We leave the entire matter to the discretion of
the court concerned so that it may act according to law.
We would, however, make it plain that the mere fact that
the proceedings have been quashed against respondents E
2 to 5 will not prevent the court from exercising its discretion
if it is fully satisfied that a case for taking cognizance
against them has been made out on the additional
evidence led before it."

11. In Michael Machado and Another v. Central Bureau
c
of Investigation and Another3, this Court on extensive
consideration of the provision contained in Section 319 stated
the (at pages 267-268) as follows :

"11. The basic requirements for invoking the above section D
is that it should appear to the court from the evidence
collected during trial or in the inquiry that some other
person, who is not arraigned as an accused in that case,
has committed an offence for which that person could be
tried together with the accused.already arraigned. It is not E
enough that the court entertained some doubt, from the
evidence, about the involvement of another person in the
offence. In other words, the court must have reasonable
• satisfaction from the evidence already collected regarding
two aspects. First is that the other person has committed F
an offence. Second is that for such offence that other
person could as well be tried along with the already
arraigned accused.
12. But even then, what is conferred on the court is only a

.. ~
discretion as could be discerned from the words "the court
may proceed against such person". The discretionary
power so conferred should be exercised only to achieve
G

criminal justice. It is not that the court should turn against
another person whenever it comes across evidence
3. c20ooi 3 sec 2$2. H
1146 SUPREME COURT REPORTS [2011] 9 S.C.R.

A connecting that other person also with the offence. A
judicial exercise is called for, keeping a conspectus of the
case, including the stage at which the trial has proceeded
already and the quantum of evidence collected till then,
and also the amount of time which the court had spent for
B collecting such evidence. It must be remembered that
there is no compelling duty on the court to proceed against
other persons.

xxx xxx xxx xxx xxx
C 14. The court while deciding whether to invoke the power
under Section 319 of the Code, must address itself about
the other constraints imposed by the first limb of sub-
section (4), that proceedings in respect of newly-added !
persons shall be commenced afresh and the witnesses
D re-examined. The whole proceedings must be
recommenced from the beginning of the trial, summon the
witnesses once again and examine them and cross-
examine them in order to reach the stage where it had
reached earlier. If the witnesses already examined are
E quite large in number the court must seriously consider
whether the objects sought to b.e achieved by such
exercise are worth wasting the whole labour already
undertaken. Unless the court is hopeful that there is a
reasonable prospect of the case as against the newly-
F brought accused ending in being convicted of the offence
concerned we would say that the court should refrain from
adopting such a course of action.

12. In Shashikant Singh v. Tarkeshwar Singh and
Another4, this Court considered the scope of Section 319 of
G the Code at page 743 of the Report in the following words:

"9. The intention of the provision here is that where in the
· course of any enquiry into, or trial of, an offence, it appears
to the court from the evidence that any person not being
H 4. c2002) s sec 738.
SAROJBEN ASHWINKUMAR SHAH v. STATE OF 1147
GUJARAT AND ANR. [R.M. LODHA, J.]

~ the accused has committed any offence, the court may f.
proceed against him for the offence which he appears to
have committed. At that stage, the court would consider
that such a person could be tried together with the accused
who is already before the court facing the trial. The
safeguard provided in respect of such person is that, the E
.,
proceedings right from the beginning have mandatorily to
be commenced afresh and the witnesses reheard. In short,
there has to be a de novo trial against him. The provision
of de novo trial is mandatory. It vitally affects the rights of
a person so brought before the court. It would not be c
sufficient to only tender the witnesses. for the cross-
examination of such a person. They have to be examined
afresh. Fresh examination-in-chief and not only their
presentation for the purpose of the cross-examination of
the newly added accus.ed is the mandate of Section
D
319(4). The words "could be tried together with the
accused" in Section 319(1), appear to be only directory.
"Could be" cannot under these circumstances be held to
be "must be". The provision cannot be interpreted to mean
that since the trial in respect of a person who was before
the court has concluded with the result that the newly added E
person cannot be tried together with the accused who was
before the court when order under Section 319(1) was
'- passed, the order would become ineffective and
inoperative, nullifying the opinion earlier formed by the court
on the basis of the evidence before it that the newly added F
person appears to have committed the offence resulting
in an order for his being brought before the court."
13. In Krishnappa v. State of Karnataka 5 , this Court
reiterated what has been repeatedly stated that the power to G
summon an accused is an extraordinary power conferred on
-#> .• the court and should be used- very sparingly and only if
compelling reasons exist for taking cognizance against the other
person against whom action has not been taken.
5. (2004) 1 sec 792. H
1148 SUPREME COURT REPORTS [2011] 9 S.C.R.

A 14. In Palanisamy Gounder and Another v. State
represented by Inspector of Police6, this Court referred to two
earlier decisions of this Court in Michael Machado 3 and
Krishnappa 5 and observed that power under Section 319 of the
Code cannot be exercised so as to conduct a fishing inquiry.
B
15. In Guriya alias Tabassum Tauquir and Others v. State
of Bihar and Another7 most of the above decisions were
referred to and it was observed that the parameters for dealing
with an application und4~r Section 319 of the Code have been
laid down in these cases.
c
16. The legal position that can be culled out from the
material provisions of Section 319 of the Code and the decided
cases of this Court is this :
(i) The Court can exercise the power conferred on it
10 under Section 319 of the Code suo motu or on an
application by someone.
(ii) The power conferred unc'er Section 319(1) applies
to all courts including the Sessions Court.
E
(iii) The phrase "any person not being the accused"
occurring in Section 319 does not exclude from its
operation an accused who has been released by
the police under Section 169 of the Code and has
F been shown in Column 2 of the charge-sheet. In
other words, the said expression covers any person
who is not being tried already by the court and
would include person or persons who have been
dropped by the police during investigation but
G against whom evidence showing their involvement
in the offence comes before the court.
(iv) The power to proceed against any person, not

s. c2oos) 12 sec 327.
H 1. (2007) a sec 224.
SAROJBEN ASHWINKUMAR SHAH v. STATE OF 1149
GUJARAT AND ANR. [R.M. LODHA, J.]

being the accused before the court, must be A
exercised only where there appears during inquiry
or trial sufficient evidence indicating his involvement
in the offence as an accused and not otherwise.
The word 'evidence' in Section 319 contemplates
the evidence of witnesses given in court in the B
inquiry or trial. The court cannot add persons as
accused on the basis of materials available in the
charge-sheet or the case diary but must be based
on the evidence adduced before it. In other words,
the court must be satisfied that a case for addition
of persons as accused, not being the accused
c
before it, has been made out on the additional
evidence let in before it.
(v) The power conferred upon the court is although
discretionary but is not to be exercised in a routine D
manner. In a sense, it is an extraordinary power
· which should be used very sparingly and only if
evidence has come on record which sufficiently
establishes that the other person has committed an
offence. A mere doubt about involvement of the
E
other person on the basis of the evidence let in
before the court is not enough. The Court must also
be satisfied that circumstances justify and warrant
that other person be tried with the already arraigned
accused.
F
(vi) The court while exercising its power under Section
319 of the Code must keep in view full conspectus
of the case including the stage at which the trial has
proceeded already and the quantum of evidence
collected till then.
G
(vii) Regard must also be had by the court to the
constraints imposed in Section 319 (4) that
proceedings in respect of newly - added persons
shall be commenced afresh from the beginning of
the trial. H
1150 SUPREME COURT REPORTS (2011) 9 S.C.R.

A (viii) The court must, therefore, appropriately consider
the above aspects and then exercise its judicial
discretion.
17. Now, if the order of the High Court is seen, it would
transpire that after noticing the provisions contained in Section
B 319 and its scope, the High Court proceeded to hold that the
order of the Magistrate did not call for any interference. The
High Court, however, failed to consider whether Magistrate has
addressed to the essential aspects before invoking his power
under Section 319 of the Code. Moreover, the High Court did
c not advert to the question whether or not filing of copy of
registration of the firm by Accused Nos. 2 and 3 would be
covered by expressions 'in the course of any inquiry into or trial'
and 'evidence' occurring in Section 319 of the Code and also
the aspect as to whether such document could be treated as
o an evidence to show that the appellant (newly added accused)
has committed an offence of cheating under Section 420 IPC.
As regards the criminal liability of a partner in the firm, in light
of the provisions contained in Section 141 of the N.I. Act, there
has to be evidence that at the time the offence was committed,
E the partner was in-charge of and was responsible to the firm
for the conduct of the business of the firm. A perusal of the
impugned order would show that all these relevant aspects have
not been considered by the High Court at all and the petitions
under Section 482 of the Code were dismissed. As, in our
• view, tlle matter needs to be considered by the High Court
F afresh, we refrain from dealing with the orders of the Magistrate
on merit lest it may prejudice the consideration of the petitions
under Section 482 of the Code before the High Court .
. 18. Consequently, these appeals are allowed and the
G impugned order dated May 5, 2010 is set aside. Crhninal
Miscellaneous Application Nos. 5157 of 2000, 5158 of 2000,
5159 of 2000 and 5160 of 2000 are restored to the original
number for hearing and reconsideration by the High Court in
accordance with law.
H N.J. Appeals allowed.

'"'i=