{"id":229080,"date":"2000-07-04T00:00:00","date_gmt":"2000-07-03T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/rajiv-gupta-vs-state-and-another-on-4-july-2000"},"modified":"2016-06-06T11:42:40","modified_gmt":"2016-06-06T06:12:40","slug":"rajiv-gupta-vs-state-and-another-on-4-july-2000","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/rajiv-gupta-vs-state-and-another-on-4-july-2000","title":{"rendered":"Rajiv Gupta vs State And Another on 4 July, 2000"},"content":{"rendered":"<div class=\"docsource_main\">Delhi High Court<\/div>\n<div class=\"doc_title\">Rajiv Gupta vs State And Another on 4 July, 2000<\/div>\n<div class=\"doc_citations\">Equivalent citations: 2000 VAD Delhi 802, 2001 104 CompCas 26 Delhi, 86 (2000) DLT 798<\/div>\n<div class=\"doc_author\">Author: M Siddiqui<\/div>\n<div class=\"doc_bench\">Bench: M Siddiqui<\/div>\n<\/p>\n<pre><\/pre>\n<p>ORDER<\/p>\n<p>M.S.A. Siddiqui, J.<\/p>\n<p>1.     The common question that arises in these petitions filed under Section<br \/>\n482  Cr.  P.C.,  is whether a company and its  Director  can  be  proceeded<br \/>\nagainst for having committed an offence under Section 138 of the Negotiable Instruments  Act  (for short &#8216;the Act&#8217;) after the expiry of the  period  of payment  of  the cheque amount before passing of the order  of  winding  up<br \/>\nunder  Section 433(e) and (f) of the Companies Act.  Since  the  relevant facts  involved in all the cases are similar and a common question  of  law arises  in all the cases, they were heard together and they are being  disposed of by this order.\n<\/p>\n<p>2.   It  is sufficient to set out the facts from one of these petitions  in this batch. Facts in Crl. M. (M) No. 3444\/99 are the following: M\/s. Sakura Seimitsu  (India) Ltd. is a Limited Company incorporated under  the  Indian Companies Act. The petitioner was the Managing Director of the said  company. Mr. M.L.Gupta, Chairman of the said company issued the following  postdated cheques in favour of the respondent No. 2.\n<\/p>\n<pre>         CHEQUE  DATE            AMOUNT (Rs.)\n        No.\n        446072  19.4.1997       98,592.00\n        446073  19.5.1997       98,592.00\n        446074  19.6.1997       98,592.00\n        446075  19.7.1997       98,592.00\n        446077  19.9.1997       98,592.00\n\n \n\n<\/pre>\n<p>3.   These  cheques when presented for encashment were dishonoured  by  the drawee  bank on the ground of insufficiency of amount in the  account  concerned  and, the respondent No. 2 issued a notice on 18.10.1997,  demanding payment  of  the amount covered by the aforesaid cheques.  As  the  company failed  to make the payment within 15 days of the receipt of the notice,  a complaint  under Sections 138\/141\/142 of the Act read with Section 420  of the  Indian Penal Code was filed against the Company, its Chairman and  the Managing  Director. On such complaint being filed, the  learned  Magistrate issued  process vide orders dated 17.11.1998. Aggrieved thereby, the  petitioner has filed the petition under Section 482 Cr.P.C. seeking quashing of the  complaint.  A  petition for winding up of the  company  was  filed  on 18.3.1997 and the winding up order was passed on 23.11.1998 by the  Company Court.  The above is the background in which learned counsel for the  petitioner  contended  that on the company being wound up by the order  of  the Company  Court, no steps could be taken by the complainant for  realisation<br \/>\nof  the amounts said to be due to it and, therefore, the criminal  proceedings initiated against the drawer company and its Director is  misconceived and  should be quashed. He submitted that the expression &#8220;in the case of  a winding  up by the Court&#8221; employed in Section 536(2) of the  Companies  Act does  not  mean that the said Section is to come into force  only  after  a winding  up order is passed. According to him, the said expression must  be read  in  the light of Section 441(2) and, therefore, once a  petition  for<br \/>\nwinding  up is filed, Section 536(2) comes into operation and there can  be no  transfer  or disposition of properties. He submitted that even  if  any transfer  takes  place, such transfer would be void. He  further  submitted that in such a situation the Company and its Director would be entitled not to  make payment because if such payment is made it would be void. He  submitted that the Court cannot force a company or its director to make a void payment  or do something, which is not sanctioned or permitted by  law.  He also  submitted  that on 23rd November, 1998, an order of  winding  up  was passed by the Company Court and an official liquidator was appointed, which bars  the  company and its Director from making any payment.  According  to him,  the said bar would operate retrospectively by virtue of  Section 441<br \/>\nbut the bar would come into existence only on the order of winding up being passed  or a provisional liquidator being appointed. He  further  submitted that the said legal disability prevented the company and its Director  from making payment. He submitted that the offence under Section 138 of the  Act is deemed to have been committed only if the drawer of the cheque fails  to make the payment of the money to the holder in due course within 15 days of the  receipt  of  the notice as stipulated in Section 138 of  the  Act.  If before  the  period of 15 days is over, any circumstance  intervenes  which makes  it impossible to make payment, then there can be no failure to  make<br \/>\npayment within the meaning of Section 138 of the Act.\n<\/p>\n<p>4.   On  the  other  hand, learned counsel appearing  for  the  complainant submitted  that  under Section 138 of the Act the offence is deemed  to  be committed on dishonour and non-payment of the amount covered by the  cheque within  15  days of receipt of notice of demand and a subsequent  order  of winding  up, even though it relates back, would have no effect on  the  offence which is already deemed to be committed.\n<\/p>\n<p>5.   It  needs  to be highlighted that the offending  cheques  were  issued between 19th April, 1997 and 19th September, 1997. The petition for winding of  the company was filed on 18.3.1997 and the winding up order was  passed on  23.11.1998 by the Company Court. The demand notice was issued  on  18th October,  1997. Thus, till the end of the period of 15 days there has  been no  order of winding up. That being so, the question for  consideration  is whether merely by reason of a winding up petition being presented there was a  bar or legal disability in making payment by the company and its  Director.  The  Supreme Court had an occasion to consider  similar  question  in Pankaj  Mehra &amp; Anr. Vs. State of Maharashtra &amp; Ors., .\n<\/p>\n<p>After  analysing the scope and ambit of Sections 441(2) and 536(2)  of  the<br \/>\nCompanies  Act  and  Sections 138\/141 of the Act, their  Lordships  of  the<br \/>\nSupreme Court have held that a company and its directors cannot escape from<br \/>\npenal liability under Section 138 of the Act on the premise that a petition for winding up of the company has been presented and was pending during the relevant time. Thus, in my opinion, the present case is squarely covered by the said authoritative pronouncement of the Supreme Court.\n<\/p>\n<p>6.   For  the  foregoing  reasons, I am not inclined to  interfere  in  the matter in exercise of the inherent power under Section 482 Cr.P.C.  Accord-\n<\/p>\n<p>ingly, the petitions are dismissed.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Delhi High Court Rajiv Gupta vs State And Another on 4 July, 2000 Equivalent citations: 2000 VAD Delhi 802, 2001 104 CompCas 26 Delhi, 86 (2000) DLT 798 Author: M Siddiqui Bench: M Siddiqui ORDER M.S.A. Siddiqui, J. 1. The common question that arises in these petitions filed under Section 482 Cr. P.C., is whether [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,8],"tags":[],"class_list":["post-229080","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Rajiv Gupta vs State And Another on 4 July, 2000 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/rajiv-gupta-vs-state-and-another-on-4-july-2000\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Rajiv Gupta vs State And Another on 4 July, 2000 - Free Judgements of Supreme Court &amp; 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