GYAN CHAND Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) CHALLENGE is made to the order dated April 7, 2005 of Judicial Magistrate Niwai District Tonk whereby the proceedings under Section 138 of Negotiable Instruments Act, 1881 were stayed in view of the provisions contained in Section 446 of the Companies Act, 1956.

(2.) I have heard learned counsel for the parties and scanned the material on record.

(3.) I am also of the view that the provisions of Section 446 of Companies Act are intended to safeguard the assets of the company in liquidation which are in the hands of the Official Liquidator. Section 138 of the Negotiable Instruments Act is enacted in order to safeguard the credibility of commercial transactions and to prevent bouncing of cheques by providing a personal criminal liability against the drawer of the cheque in public interest.