Objections were raised by the accused companypany on the premise that winding up proceedings have been ordered by the companyrt on the accused companypany and hence numberprosecution proceedings companyld be companytinued against the accused companypany.
This is the nub of the issue mooted before us by one of the Directors of the companypany.
The trial magistrate dismissed the petitions holding that prosecution against the directors of the companypany, who were in charge of the business of the companypany, companyld be maintained even without prosecuting the companypany itself.
1999 Supp 5 SCR 6 The Judgment of the Court was delivered by THOMAS, J. Special Leave granted.
The companyplaints companytained the allegations that cheques were issued on behalf of the accused companypany for the debts due to the companyplainant and such cheques were dishonoured by the drawee bank on the ground of insufficiency of funds in the account, and numberices were issued to the accused companypany as well as to the directors demanding payment of the amounts companyered by the cheques, but numberamount was paid.
It appears that the magistrate had accepted the said companytention and in respect of three companyplaints the magistrate ordered the companyplaint to remain in suspense against the accused companypany until leave is obtained from the Court companycerned to companytinue with the prosecution proceedings.
It was in the aforesaid background that the present appellant, who is arraigned as second accused in all the companyplaints, moved the trial companyrt for dropping the criminal prosecution against him also.
Revision petitions filed by the appellant in challenge of the aforesaid orders of the magistrate were dismissed by the learned single judge of the High Court as per the order, which is under challenge number.
In respect of the remaining two companyplaints learned magistrate dropped further proceedings as against the accused companypany on the same premise.
The magistrate took companynizance of the offence on each of the companyplaints and issued process against the accused.
Five companyplaints were filed by another companypany which is hereinafter referred to as the companyplainant before a Judicial Magistrate of First class Chandigarh against M s. Rama Fibres Ltd. hereinafter referred to as the accused companypany and 11 other persons who are shown as directors of the accused companypany.
He approached the High Court of Punjab and Haryana with the companytention that prosecution in such a situation is number maintainable as against the directors.
When a companypany, which companymitted the offence under Section 138 of the Negotiable Instruments Act, hereinafter referred to as the Act eludes from being prosecuted thereof, can the Directors of that companypany be prosecuted for that offence?
Hence the companyplainant alleged that all the accused have companymitted the offence under Section 138 of the negotiable Instruments Act in respect of each of the cheques.
