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TMI Blog2010 (1) TMI 1302X X X X Extracts X X X X X X X X Extracts X X X X ..... (Special Provision) Act, 1985 (hereinafter referred as 'SICA'), on the ground that in the opinion of the Board of Directors, the company had become a Sick Industrial Company. Vide order dated 1st December 1998, BIFR nominated UPFC as the Operating Agency to work out the rehabilitation scheme for the company and also directed that neither the company nor any of the involved party should dispose of/alienate any of the assets of the company. On 4th October 2002 BIFR recommended that the company be wound up. Vide order dated 13th December 2002, passed in Company Petition 89 of 1997, this Court directed the company to be wound up and appointed Official Liquidator as Provisional Liquidator for the company and instructed him to take over t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an account maintained by him with a banker, for payment to another person from out of that account for discharge in whole/part any debt or liability, (2) presentation of the cheque by the payee or the holder in due course to the bank, (3) returning the cheque unpaid by the drawee bank for want of sufficient funds to the credit of the drawer or any arrangement with the banker to pay the sum covered by the cheque, (4) giving notice in writing to the drawer of the cheque within 15 days of the receipt of information by the payee from the bank regarding the return of the cheque as unpaid demanding payment of the cheque amount, (5) failure of the drawer to make payment to the payee or the holder in due course of the cheque, of the amount covered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipt of the notice. It is not necessary that all the above five acts should have been perpetrated at the same locality. It is possible that each of those five acts could be done at five different localities. But a concatenation of all the above five is a sin qua non for the completion of the offence under Section 138 of the Code.... 6. In Harman Electronics (P) Ltd. v. National Panasonic India (P) Ltd. 2009 (1) SCC 720, the Hon'ble Supreme Court observed as under: A distinction must also be borne in mind between the ingredient of an offence and commission of a part of the offence. While issuance of a notice by the holder of a negotiable instrument is necessary, service thereof is also imperative. Only on a service of such notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouring the cheques when they were presented for encashment prior to 1st December 1998 and/or from complying with the notice prior to order dated 1st December 1998 being passed by BIFR. But, the offence itself came to be complete only on 3rd December 1998. No offence under Section 138 of Negotiable Instruments Act was committed by the company or any of its Directors prior to 3rd December 1998. 8. Since the company was not in a position to dispose of or alienate any of its assets and it was not possible for them to make payment of amount of the cheques on 3rd December 1998, no offence under Section 138 of Negotiable Instruments Act was committed by the company on account of non-payment of these cheques. As regards the cheques, subject matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restraining the company or its directors not to dispose of any of its assets except with consent of the Board then the contention raised on behalf of the appellants that a criminal case or the alleged offence under Section 138 NI Act cannot be instituted during the period in which the restraint order passed by the BIFR remains operative cannot be rejected outright. Whether the contention can be accepted or not will depend on the facts and circumstances of the case. Take for instance, before the date on which the cheque was drawn or before expiry of the statutory period of 15 days after notice, a restraint order of the BIFR under Section 22A was passed against the company then it cannot be said that the offence under Section 138 NI Act was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge funds at the time of presentation of the cheque to his bank, to show his bona fide, by making payment within 15 days of the receipt of the notice. If a person is prohibited on account of an order passed by BIFR from making payment on the date the statutory period of 15 days expires, non-payment being beyond his control, no offence under Section 138 of Negotiable Instruments Act would be made out against him. 11. The decision of the Hon'ble Supreme Court in the case of Kusum Ingot (supra) was applied by this Court in some subsequent cases involving this very company. In Crl.M.C. 52/2003, decided on 22nd January 2004, this Court quashed the complaint that had been instituted against this company under Section 138 of Negotiable Instr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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