ORKAY INDUSTRIES LIMITED Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) BY all these Petitions the Petitioners pray that the proceedings before the Metropolitan Magistrate Courts, under Section 138 of the Negotiable Instruments Act, be quashed. In some of these Petitions a prayer is also made that undertakings given by the concerned Petitioners to those Courts, to pay amounts, be also quashed and/or set aside.

(2.) MOST of these Petitions have been filed by Directors of two Companies viz Orkay Industries Limited and Atash Industries (India) Limited. In most of these Petitions the concerned Company is also a party. In some, it is a co-Petitioner. In some, it is a Respondent. In all these Petitions common questions of law are raised. The main question raised before this Court is whether by virtue of Section 536 (2) read with Section 441 (2) of the Companies Act providing that all transfers made, after the commencement of winding up, will be void, any offence can be deemed to have been committed under Section 138 of the Negotiable Instruments Act. According to the Petitioners, as the payments, if made, would have been void under Section 536 (2) of the Companies Act, they were justified in refusing to do a void act and there is no "failure to make payment" and hence no offence has been committed under Section 138 of the Negotiable Instruments Act.

(3.) MR. Manohar points out that against Orkay Industry Ltd, today there are pending 39 Company Petitions for winding up. He points out that the total liability in all these Company Petitions is in a sum of app. Rs. 36,67,12,803/ -. MR. Manohar points out that against Atash Industries (India) Limited 24 Company Petitions were filed of which 19 are still pending. He points out that the total liability of the Company in these Petitions is in the region of app. Rs. 5 . 30 crores.