Can section 138 NI Act COMPLAINT be amended after cognisance

 

The Supreme Court in a matter captioned as Bansal Milk Chilling Centre Vs Rana Milk Food Private Ltd. & Anr CRIMINAL APPEAL NO. OF 2025 (@ SPECIAL LEAVE PETITION (CRL.) NO.15699 OF 2024) had to settle the issue raised before it i.e whether a complaint u/s 138 of Negotiable Instruments Act could be amended after cognisance is taken on it by the Magistrate.

In Bansal Milk Chilling Centre (Supra), Summons was issued to the respondents and at the stage when the complainant was yet to be cross-examined, an amendment application to amend the complaint was moved by the appellant. It was contended by the appellant that due to a typographical mistake it had been pleaded that the respondents had been purchasing Desi Ghee (Milk Products) while it should have been that the respondents were purchasing “Milk”. The respondents, had opposed the pea on the premise that no amendment was permissible after cognizance is taken and that the amendment sought, shall change the very nature of the complaint.

The trial court had allowed the amendment as it was held that no prejudice shall be caused to the accused, since cross examination of complainant was yet to begun. Moreover, it was held that amendment was in the nature of a typographical error, and since the amendment sought is in the initial stage of the case, therefore, it was allowed.

The matter was agitated before the High Court u/s 482 of Cr.P.C. It was contended that the amendment sought was not a typographical error, since, even in legal notice that preceded filing of the complaint,

There was mention of “Desi Ghee (Milk Products)”. It was thus contended that by way of afterthought with a view to avoid liability under the Goods and Services Tax Act, 2017 (for short the ‘GST’) the amendment was mooted. The High Court had allowed the petition as it was held that the amendment sought was not in the nature of a typographical error, but it had a wider impact upon the entire matter in dispute and, therefore, it changed the nature of the complaint. The High Court also found merit in the contention of the respondents that the amendment was sought, as no GST was leviable on milk.

The order of the High Court was impugned before the Supreme Court in Bansal Milk Chilling Centre (Supra). The Supreme Court has observed that earlier, the Supreme Court has held that there is no prohibition to amendment.  In S.R Sukumar Vs Sunand Raghuram (2015) 9 SCC 609, the Supreme Court has earlier held as under :-

“19. What is discernible from U.P. Pollution Control Board case is that an easily curable legal infirmity could be cured by means of a formal application for amendment. 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.”

Thus, it is explicit that a complaint can be amended and there is no blanket prohibition to that.

Though, the respondent had contended that in the said case amendment was sought and allowed at the pre-cognizance stage and as such the said case can have no application here, but was rejected by the Supreme Court. It was held that a careful reading of the judgment in S.R. Sukumar’s case (supra) reveals that the said judgment followed the earlier judgment of this Court in U.P. Pollution Control Board vs. Modi Distillery and Others (1987) 3 SCC 684, where, after the process was issued to the respondents therein, a revision was filed by few of the accused and a Section 482 Cr.PC petition was filed by few other accused. Invoking the revisional jurisdiction, the High Court quashed the proceedings holding that vicarious liability could not be saddled on the Directors unless “Modi Industries Limited” was arrayed as accused. The Complainant in that case had arrayed “Modi Distillery”, an industrial unit and averred that Modi Distillery was a Company. The High Court focusing on the technical flaw in the complaint quashed the proceedings on the premise that “Modi Industries Limited” was not made an accused.

The Supreme Court in UP Pollution Control Board (Supra), while allowing the appeal of the Complainant has held as under:

“6. ……The learned Single Judge has focussed his attention only on the technical flaw in the complaint and has failed to comprehend that the flaw had occurred due to the recalcitrant attitude of Modi Distillery and 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 para 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. Although as a pure proposition of law in the abstract the learned Single Judge's view that there can be no vicarious liability of the Chairman, Vice-Chairman, Managing Director and members of the Board of Directors under sub-section (1) or (2) of Section 47 of the Act unless there was a prosecution against Modi Industries Limited, the company owning the industrial unit, can be termed as correct, the objection raised by the petitioners before the High Court ought to have been viewed not in isolation but in the conspectus of facts and events and not in vacuum. We have already pointed out that the technical flaw in the complaint is attributable to the failure of the industrial unit to furnish the requisite information called for by the Board. Furthermore, the legal infirmity is of such a nature which could be easily cured. Another circumstance which brings out the narrow perspective of the learned Single Judge is his failure to appreciate the fact that the averment in para 2 has to be construed in the light of the averments contained in paras 17, 18 and 19 which are to the effect that the Chairman, Vice-Chairman, Managing Director and members of the Board of Directors were also liable for the alleged offence committed by the Company.”

The Supreme Court has further held that in SR Sukumar (Supra) it does not follow from that the post-cognizance, no amendment can be allowed. In fact, a reading of the paragraph 20 of the said judgment clearly brings out the fact that four distinct reasons were given: -

The term “complaint” is defined in Section 2(d) of the Code of Criminal Procedure, 1973 [Section 2(1)(h) of the Bharatiya Nagarik Suraksha Sanhita, 2023] which reads as follows:-

“2 (d) “complaint” means any allegation made orally or in writing to a Magistrate, with a view to his taking action under this Code, that some person, whether known or unknown, has committed an offence, but does not include a police report.”

As would be seen ordinarily, a complaint could even be oral. However, dealing with a case under Section 138 of the NI Act, it may be noticed that Section 142 of the NI Act states that to take cognizance of any offence punishable under Section 138, a written complaint is mandatory. Unless expressly prescribed, if to set a criminal case in motion, ordinarily an oral complaint would be sufficient, any question about amendment of a written complaint should be considered by giving the widest latitude. However, as was rightly pointed out in S.R. Sukumar (supra), it should be ensured that no prejudice should be caused to the accused.

What clearly emerges that the amendment application if contains formal amendment but not a substantial one, the Magistrate may allow the amendment application when no cognizance was taken of the complaint, before the disposal of amendment application. Moreover, the situation will be different before issuing summons and hence no prejudice would be caused to the accused. It is also to be seen that amendment should not change the nature and character of the complaint. It is also a relevant factor that not allowing the amendment, if likely to lead to multiplicity of proceedings, the amendment should be allowed.

What is noteworthy is that amendments/alterations are not alien to the Code of Criminal Procedure. Section 216 of the Cr.P.C. deals with the power of Court to alter any charge and the concept of prejudice to the accused. No doubt when a charge is altered, what is altered is the legal provision and its application to a certain set of facts. The facts per se may not be altered. However, the section does throw some light in considering the issue of amendments.

Further, Section 216 and 217 of Cr.P.C [Section 239 and 240 of the Bharatiya Nagarik Suraksha Sanhita, 2023] read as follows:-

“216. Court may alter charge.-

(1) Any Court may alter or add to any charge at any time before judgment is pronounced.

(2) Every such alteration or addition shall be read and explained to the accused.

(3) If the alteration or addition to a charge is such that proceeding immediately with the trial is not likely, in the opinion of the Court, to prejudice the accused in his defence or the prosecutor in the conduct of the case, the Court may, in its discretion, after such alteration or addition has been made, proceed with the trial as if the altered or added charge had been the original charge.

(4) If the alteration or addition is such that proceeding immediately with the trial is likely, in the opinion of the Court, to prejudice the accused or the prosecutor as aforesaid, the Court may, either direct a new trial or adjourn the trial for such period as may be necessary.

(5) If the offence stated in the altered or added charge is one for the prosecution of which previous sanction is necessary, the case shall not be proceeded with until such sanction is obtained, unless sanction has been already obtained for a prosecution on the same facts as those on which the altered or added charge is founded.

217. Recall of witnesses when charge altered. –

Whenever a charge is altered or added to by the Court after the commencement of the trial, the prosecutor and the accused shall be allowed –

(a) to recall or re-summon, and examine with reference to such alteration or addition, any witness who may have been examined, unless the court, for reasons to be recorded in writing, considers that the prosecutor or the accused, as the case may be, desires to recall or re-examine such witness for the purpose of vexation or delay or for defeating the ends of justice;

(b) also to call any further witness whom the Court may think to be material.”

It will be noticed that when a charge is altered, if there is no prejudice to the accused, the trial can be proceeded with. Further, if it is likely to prejudice, the Court may either direct a new trial or adjourn the trial to such period. Section 217 of the Cr.P.C. grants liberty to the prosecutor and the accused to recall witnesses when charges are altered under the conditions prescribed therein. The test of ‘prejudice to the accused’ is the cardinal factor that needs to be borne in mind.

It was thus held by Supreme Court in Bansal Milk Chilling Centre (Supra):

 

17. We have carefully perused the complaint and the application for amendment. The amendment was moved at a stage when after summons being issued to the respondents, the chief examination of the complainant had concluded and when cross-examination was awaited. The amendment made is also only with regard to the products supplied. According to the complainant, while what was supplied was “milk”, by an inadvertent error “Desi Ghee (milk products)” was mentioned. The error which occurred in the legal notice was carried in the complaint also”.

 

18. On the facts of the present case and considering the stage of the trial, we find that absolutely no prejudice would be caused to the accused/respondents. The actual facts will have to be thrashed out at the trial. As to what impact the amendment will have on the existence of debt or other liability is for the Trial Court to decide based on the evidence. It was a curable irregularity which the Trial Court rightly addressed by allowing the amendment. It could not be said that by allowing the amendment at a stage when the evidence of the complainant was incomplete, failure of justice would occasion”.

It was thus observed that the High Court was in error and had completely mis-directed itself in delving into the aspects of GST and its leviability, as that could be a concern of the appropriate authorities under the relevant statute. Still further, the amendment as sought was not in any way to change the nature and character of the complaint. Hence, order passed by the High Court was set aside.

It is also necessary tom point out that all kinds of amendment cannot be allowed. In a matter reported as Munish Kumar Gupta Vs Mittal Trading Company 2024 SCC OnLine 1732 it is held as under:

“9. In the present matter, where the date is a relevant aspect based on which the entire aspect relating to issue of notice within time frame as provided under the Negotiable instruments Act, 1881, and also as to whether as on the date there was sufficient balance in the account of the issuer of the cheque would be the question, the amendment as sought for, the present circumstances was not justified.”

What could be culled out from the above discussion is that the amendment in the nature of above may not be allowed for the reason that time frame of issuance of notice is the backbone of complaint u/s 138 of Negotiable Instruments Act, as also the existence of sufficient balance in the account of issuer in the relevant time. Moreover, if amendment is sought after long delay, the same may not be allowed. However, a formal amendment before the cognisance is taken could be allowed. In fact, even after taking cognisance, the amendment application, provided the same are formal in nature can still be allowed.

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                                      Anil K Khaware

Founder & Senior Associate

Societylawandjustice.com