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Manjula Kapoor v. The State of Himachal Pradesh and Anr.

Criminal Appeal · 2026 INSC 789Decided 29 Jul 2026
Criminal Appeal (arising out of SLP (Crl.) No. 8240 of 2016)
Justice Manoj Misra · Justice Vijay Bishnoi

Background

Pankaj Sharma filed a cheque-bounce complaint under Section 138 of the Negotiable Instruments Act against Manjula Kapoor, a director and authorised signatory of a company (M/s Cine Prime Entertainment), for a Rs. 5 lakh cheque that came back marked "payment stopped by drawer", but the complaint never named the company itself as an accused, only Kapoor personally. Midway through trial, Kapoor sought to quash the case, relying on the Supreme Court's earlier ruling in Aneeta Hada that a company must be made an accused before its director can be prosecuted for a cheque issued on its account. The High Court agreed with that legal position but, instead of quashing the case, directed the trial court to use its power under Section 319 of the CrPC to add the company as a co-accused mid-trial and start the trial over.

Decision Breakdown

The Supreme Court held that failing to implead the company was a "fatal defect" that meant the complaint was never validly instituted in the first place: no valid cognizance could have been taken on it. Since limitation periods under Section 142 of the NI Act had already expired, this fatal defect could not be cured later by invoking Section 319 CrPC, because that provision is meant to add genuinely new accused discovered during trial, not to rescue a complaint that was defective from the outset and time-barred for being refiled correctly. Relying on its earlier decision in N. Harihara Krishnan v. J. Thomas, the Court held that the High Court had exceeded its jurisdiction by directing the trial court to add the company this way, and quashed the complaint and all proceedings arising from it.

Lesson Learnt

In a cheque-bounce case against a company, the complaint must name the company itself as an accused from the start: a personal complaint against only a director or signatory, filed without impleading the company, is not just an irregularity but a fatal, incurable defect that cannot be patched up later once the limitation period has run out.

Official source (sci.gov.in)View Judgment (PDF)

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