JOSE ANTONY Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) This appeal is at the instance of the applicant in C. A. No. 257/98 in C.P. 20/94 on the file of this Court (Company Court). The applicant, the Managing Director of M/s. Belhouse Associates (P) Ltd., who was an accused in C.C. No. 456/96 pending before the Additional Chief Judicial Magistrate's Court, Ernakulam, filed C.A. 257/98 before the Company Court to stay the above proceedings invoking S.446 of the Companies Act. The company court dismissed the above application and the above order is under challenge in this appeal.

(2.) The 2nd respondent herein (complainant) filed C.C. 456/96 before the Additional Chief Judicial Magistrate's Court, Ernakulam against the applicant and M/s. Belhouse Associates (P) Ltd., a company under liquidation, for the commission of an offence under S.138 of the Negotiable Instruments Act. It was alleged that a cheque for Rs. 1,12,000/- issued by the accused on 19.1.96 towards discharge of a liability to the complainant for the electrical works done by them, was dishonoured when presented for encashment, due to the insufficiency of funds in the accounts in the name of the accused and they had not cared to pay the amount inspite of demand through registered notice. Accordingly, the complainant filed the complaint after complying with all the legal formalities.

(3.) The first accused in the complaint M/s. Belhouse Associates (P) Ltd. is a company under liquidation as per the order passed by the Company Court in C.P. 20/94 and the Official Liquidator had been appointed as liquidator of the company. According to the appellant he issued the cheque as the managing director of the company and as there was no allegation made personally against him, the liability under C. C. 456/96 was entirely upon the company and as such the entire proceedings of the case are to be stayed under S.446 of the Companies Act. The Official Liquidator filed an objection contending that the proceedings cannot be stayed under S.446 of the Companies Act, and similar applications in MCA No. 106 and 109 of 1990 and 155/94 in C. P. No. 54 and 57 of 1989 were dismissed by this Court by its order dated 12.6.97. The Company Court after hearing the appellant and the Official Liquidator held that S.446 of the Companies Act cannot be attracted in criminal proceedings where the assets of the company are not involved and the proceedings pending against the accused were only in respect of the commission of the offence and the punishment thereon. Accordingly the petition was dismissed and the above order is now under challenge.