M L GUPTA Vs. CEAT FINANCIAL SERVICES LTD

JUDGEMENT

(1.) The question, which falls for consideration, is as to whether a complaint under Section 138 of the Negotiable Instrument Act can be filed against the company and/or its Managing Director/Director after the winding up of the said company.

(2.) Petitioner no.1 was the Managing Director and petitioner no.2 is the Director of a public limited company called Sakura Seimitsu India Ltd. It entered into Lease Agreement dated 12.1.1995 with Ceat Financial Services Ltd. (hereinafter called 'complainant') and issued post-dated cheques on 12.1.1995 for future lease rentals. There were certain defaults in making payment of lease rentals as a result of which complainant filed winding up petition being CP.No.23 of 1998 against the company in the High Court of judicature at Allahabad. Vide order dated 24.7.1998 the said petition was admitted and thereafter this company was finally wound up by the orders of the High Court passed on 23.11.1998 and Official Liquidator (OL) was appointed to take charge of all the assets and properties of the company. The necessary legal consequence was discharge of all the employees and officers from the services of the company including the Board of Directors. It is not in dispute that complainant presented cheque dated 19.10.1999 for payment much after the winding up of the company. This cheque which was issued by the company and returned with the remarks "No Account/Account Closed". Notice of dishonour of the cheque was issued to the company in liquidation at the registered office of the company in liquidation and thereafter complaint filed under Section 138 of the Negotiable Instruments Act. In this complaint the company is made accused No.1 whereas petitioners are arraigned as accused nos.2 and 3. The cause title of the complaint reads as under: <FRM>JUDGEMENT_1465_ILRDLH15_2006Html1.htm</FRM>

(3.) When the complaint is filed against a company prior to the winding up of the company and during the pendency of such a complaint under Section 138 of the Negotiable Instruments Act and the company is ordered to be wound up, the complaint against the company cannot proceed without the permission of the Company Judge of the High Court which ordered winding up. Reason is simple. A fortiori, the complaint under Section 138 cannot be filed against the company which is already wound up on the date when the cheque was dishonoured and notice of dishonour of the cheque was given.