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Issues:
- Whether a company and its directors can be proceeded against for an offence under section 138 of the Negotiable Instruments Act after the expiry of the period of payment of the cheque amount before passing of the order of winding up under section 433(e) and (f) of the Companies Act, 1956. Analysis: 1. Common Question of Law: The petitions under section 482 of the Criminal Procedure Code raise the issue of whether a company and its directors can face proceedings for an offence under section 138 of the Negotiable Instruments Act after the cheque payment period has expired but before a winding-up order under the Companies Act. The cases were heard together due to similar facts and legal questions. 2. Contentions of Petitioners: The petitioners argue that once a winding-up petition is filed, section 536(2) of the Companies Act comes into effect, preventing the company and its directors from making payments. They claim that any payment made would be void, and the court cannot compel them to make void payments. They assert that the legal disability arising from the winding-up order prevents them from fulfilling the cheque payment obligation under section 138. 3. Respondents' Argument: The respondents argue that under section 138, the offence is deemed committed upon dishonour and non-payment of the cheque amount within 15 days of notice, irrespective of subsequent winding-up orders. They contend that the issuance of a cheque does not constitute property disposition, and the company cannot evade penal liability based on pending winding-up petitions. 4. Judicial Interpretation: Referring to the Supreme Court's decision in Pankaj Mehra v. State of Maharashtra, the High Court held that the company and its directors cannot avoid penal liability under section 138 due to pending winding-up petitions. Drawing a cheque does not amount to property disposition, and the company's inability to pay due to winding-up proceedings does not absolve them of the offence under section 138. 5. Effect of Winding-Up Order: The High Court emphasized that the winding-up order does not create a legal barrier to making payments or disposing of property under section 536(2) of the Companies Act. As there is no prohibition on payments, failure to pay the cheque amount due to pending winding-up petitions does not excuse the offence under section 138. 6. Final Decision: The High Court dismissed the petitions, concluding that the Magistrate's order did not have any legal defects justifying intervention under section 482 of the Criminal Procedure Code. The court upheld that the company and its directors could be proceeded against for the offence under section 138 despite the pending winding-up proceedings. The issue of director resignation before cheque issuance was deemed a disputed question of fact beyond the court's scope in the present proceedings.
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