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2022 (8) TMI 479 - HC - Companies LawValidity of summon order - Winding up of the company - appointment of Provisional Liquidator of the company on the ocassion of winding up of the company - continuation of criminal proceedings - Dishonor of Cheque - Section 138 of NI Act - HELD THAT - It is implicit through Section 273(1)(c) of the Companies Act, 2013 that the Provisional Liquidator of the company may be appointed by the Tribunal till the making of a winding up order. The order dated 28.02.2013 relied upon on behalf of the petitioner in Co.Pet. 36/2013 is not an order for winding up of the company M/s Catmoss Retail Private Limited. - in terms of Section 279(1) of the Companies Act, 2013, a suit or other legal proceedings can be commenced, or if pending on the date of the winding up order may be proceeded with by or against the company with the leave of the Tribunal and subject to such terms as the Tribunal may impose. Dishonor of Cheque - HELD THAT - Undoubtedly, in the instant case, the complaint has been instituted under Section 138 of the Negotiable Instruments Act, 1881 on 12.08.2013 and that thus, the said complaint under Section 138 of the Negotiable Instruments Act, 1881 has been filed after the date 28.02.2013 when the Provisional Liquidator had been appointed in Co.Pet. 36/2013 qua M/s Catmoss Retail Private Limited - The complaint filed in CC No.452/2014 relating to the cheque bearing No.206731 dated 30.06.2013 for an amount of Rs.8,00,000 was instituted on 12.08.2013 prior to the winding up order dated 27.03.2014 and vide order dated 10.07.2017 in CA No.52/2017 in Co.Pet. 36/2013, permission had been granted to the applicant thereof to continue with the complaint CC No. 2913/1/15. Application disposed off.
Issues Involved:
1. Quashing of the summoning order dated 15.10.2014. 2. Impact of the company's liquidation on the maintainability of the complaint under Section 138 of the Negotiable Instruments Act, 1881. 3. Validity of the complaint filed after the appointment of the Provisional Liquidator. 4. Permission granted by the court to continue with the complaint proceedings. Issue-wise Detailed Analysis: 1. Quashing of the Summoning Order Dated 15.10.2014: The petitioner sought the quashing of the summoning order dated 15.10.2014 issued by the Court of the learned ACMM East KKD in Complaint Case No. 9168/2019. The petitioner argued that the accused company, M/s Catmoss Retail Private Limited, had gone into liquidation as per the order dated 28.02.2013, and the dishonored cheque in question was dated after this order. The petitioner relied on the verdict in M.L. Gupta & Anr. vs. Ceat Financial Services Ltd., which held that a complaint under Section 138 of the Negotiable Instruments Act is not maintainable if filed after the company has gone into liquidation. 2. Impact of the Company's Liquidation on the Maintainability of the Complaint: The petitioner argued that since the company was in liquidation, it could not have committed any offense under Section 138 of the Negotiable Instruments Act. The petitioner also cited the Karnataka High Court's decision in M/s Religare Finvest Limited vs. Vijay Steel Tubes and Fitting Private Limited, which held that a complaint under Section 138 is not maintainable if filed after the company has gone into liquidation. However, the court noted that the winding-up petition (Co.Pet. 36/2013) was still pending, and only a Provisional Liquidator had been appointed, not a final winding-up order. 3. Validity of the Complaint Filed After the Appointment of the Provisional Liquidator: The court observed that the complaint under Section 138 of the Negotiable Instruments Act was filed on 12.08.2013, after the appointment of the Provisional Liquidator on 28.02.2013. However, the court highlighted that the order dated 28.02.2013 was kept in abeyance on 12.03.2013 and was later recalled on 06.05.2013. The final winding-up order was issued on 27.03.2014, which was after the filing of the complaint. Therefore, the complaint was validly instituted before the final winding-up order. 4. Permission Granted by the Court to Continue with the Complaint Proceedings: The respondent opposed the petitioner's submissions, citing the order dated 10.07.2017, which permitted the continuation of the complaint proceedings under Section 138 of the Negotiable Instruments Act against the respondent and its directors. The court noted that the respondent had been granted permission to proceed with the complaint CC No. 2913/1/15, which was related to the dishonored cheque in question. The court also referred to the observations in para 7(B) of the verdict in M.L. Gupta & Anr., which stated that if a winding-up petition is pending and no winding-up order is passed, a complaint under Section 138 is maintainable. Conclusion: The court dismissed the petition, taking into account the permission granted to continue with the complaint proceedings and the observations in the M.L. Gupta & Anr. case. The court clarified that nothing stated in the judgment would affect the merits or demerits of the adjudication in the ongoing complaint case.
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