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Judgment
Satish Kumar Mittal, J.—This order shall dispose of Company Petitions Nos. 10 and 11 of 2007. Both these petitions have been filed by Manjit Singh Dhillon and Harmandeep Singh, the President and Secretary, respectively, of the Prehari Mutual Welfare Society (Registered), u/s 446 of the Companies Act, 1956 (hereinafter referred to as ''''the Act") for stay of proceedings in the criminal complaints u/s 138 of the Negotiable Instruments Act, 1881, pending in the court of Additional Chief Judicial Magistrate, Kapurthala, filed by the respondents Gurcharan Singh and Bachan Kaur.
In the petitions, it has been alleged that petitioners Nos. 2 and 3 are the directors of M/s. Prehari group of companies, against which liquidation proceedings in the shape of winding up petitions, i.e., C. Ps. Nos. 43, 65, 167, 140 of 2004, 1 to 4 and 66 of 2005, are pending in this Court. It has been stated that in these petitions, the provisional liquidator was appointed on April 20, 2006.
Counsel for the petitioners submit that since the respondents in these petitions have filed separate criminal complaints u/s 138 of the Negotiable Instruments Act, 1881, on the allegation of dishonour of the cheques issued by Prehari Mutual Welfare Society (Registered), therefore, proceedings in those criminal complaints be stayed during the pendency of the aforesaid winding up petitions.
Counsel for the official liquidator submits that perusal of the criminal complaints annexed with the petitions shows that these complaints were filed in the month of July, 2004, for the dishonour of the cheques dated February 6, 2004 and February 11, 2004, issued by Prehari Mutual Welfare Society (Registered). Those cheques were dishonoured on May 15, 2004 and May 12, 2004, respectively. Thereafter, legal notices were given on May 26, 2004. Subsequently, in the month of July, 2004, the aforesaid two complaints were filed by the respondents.
Learned Counsel submits that both the complaints were filed for the action of the petitioners much prior to the appointment of provisional liquidator. He further submits that petitioners Nos. 2 and 3 are the President and Secretary of Prehari Mutual Welfare Society (Registered), which is not a company under liquidation. Therefore, these two criminal complaints initiated by the respondents cannot be stayed u/s 446 of the Act.
Counsel for the petitioners could not dispute the aforesaid factual position. However, he submits that the petitioners accepted the deposit from the respondents for act on behalf of Prehari group of companies under liquidation, therefore, the proceedings should be stayed.
After hearing counsel for the parties, I do not find any merit in these petitions. Section 446 of the Act only bars proceedings against the company where a winding up order has been passed or the official liquidator has been appointed as provisional liquidator, except by leave of the court. This provision does not bar criminal proceedings against the employees, manager or director of the company for cheating or other offence. When the criminal proceedings of cheating are not against the company, but against the manager or director or employee of the company, the leave of the company court is not necessary, as the proceedings cannot be said to be against the company. In this regard, reference can be made to a decision of this Court in Gian Chand v. Amur Nath [1970] 40 Comp Cas 1158.
In the instant case, the complaints have been filed against the petitioners in their capacity as President/Secretary of the Prehari Mutual Welfare Society which is not the company under liquidation. Even in these cases, the complaints were filed for the alleged offence, for which the cause of action arose in the year 2004, much before appointing of provisional liquidator in C. Ps. Nos. 43, 65, 167, 140 of 2004.1 to 4 and 66 of 2005, which pertain to the winding up of the companies.
Therefore, in my opinion, the criminal complaints initiated by the respondents u/s 138 of the Negotiable Instruments Act, 1881, against the petitioners cannot be stayed u/s 446 of the Act.
In view of the above, both these petitions are dismissed.