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TMI Blog2002 (7) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany is said to be its customer. A cheque bearing No. 506485 dated 1-6-1999 for Rs. 10,68,000 was drawn on A.P. Mahesh Co-operative Urban Bank Ltd. towards repayment of sale consideration of the goods purchased. The cheque was presented to the bank and it was said to have been dishonoured on 28-6-1999. A legal notice dated 11-7-1999 was issued, which was sent by registered post on 12-7-1999. The accused received the said notice and acknowledged the same on 14-7-1999. Thereafter, the 1st respondent presented the complaint before the learned V Metropolitan Magistrate, who took it on file and numbered it as C.C. 584 of 1999. Aggrieved by the same the accused Nos. 1 to 3, namely, the company, the Managing Director and the Director presented t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount to disposition of property. We are unable to accept the said contention particularly in view of the definition of 'cheque' in the NI Act. 'A Cheque is a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.' 21A. Bill of exchange is 'an instrument in writing containing an unconditional order, signed by the maker, directing certain person to pay a certain sum of money only to, or to the order of a certain person or to the bearer of the instrument'. The cheque, therefore, can be an order on the banker to pay the amount to the holder thereof and no disposition of property would take place until the payment is made by the banker pursuant thereto. At the most, drawing of a cheque can be c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration of the scheme under section 18; and (b) during the period beginning with the recording of opinion by the Board for winding up of the company under sub-section (1) of section 20 and up to commencement of the proceedings relating to the winding up before the concerned High Court. This exercise of the power by the Board is condition by the prescription that the Board is of the opinion that such a direction is necessary in the interest of the sick industrial company or its creditors or shareholders or in the public interest. In a case in which the BIFR has submitted its report declaring a company as 'sick' and has also issued a direction under section 22A restraining the company or its directors not to dispose of any of its asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs in abeyance. It will be open to the appellants to place relevant materials in this regard before the learned Magistrate before whom the cases are pending and the learned Magistrate will examine the matter keeping in mind the discussions made in this judgment. We make it clear that we have not considered the question whether in the facts and circumstances of a particular case section 138 NI Act is attracted or not, for that is a question to be considered by the court at the appropriate stage of the case in the light of the evidence on record." 7. The following principles emerge on a close scrutiny of both the Supreme Court decisions. Firstly, there is no provision under the Companies Act prohibiting prosecution of the company for the off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aint has to be read as a whole. If it appears that on consideration of the allegations in the light of the statement made on oath of the complainant that the ingredients of the offence or offences are disclosed and there is no material to show that the complaint is mala fide, frivolous or vexatious, in that event there would be no justification for interference by the High Court. When an information is lodged at the police station and an offence is registered, then the mala fides of the informant would be of secondary importance. It is the material collected during the investigation and evidence led in Court, which decides the fate of the accused person. The allegations of mala fides against the informant are of no consequence and cannot by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt regarding applicability of section 22A of SICA and also whether the offence under section 138 of the Act arises. 12. Hence, I find there is no illegality in the order passed by the learned Magistrate. The Supreme Court has not stated that the matter has to be stayed till the disposal of the case before the BIFR, I am of the considered view that the matter cannot be postponed. It is clearly mentioned in the order passed under section 22A that no payment shall be made for which permission of the authorities of BIFR is required. It is always open for the Directors to seek permission before the authorities of BIFR to make provision for payment of the amount. The entire matter has to be judged after presenting the order of the BIFR before th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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