TaxTMI 
TaxTMI 
2019 (7) TMI 891
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....lainants for the sake of convenience. 4] Accused 1 is a Company Registered under the Companies Act. Accused 2 is the Managing Director and accused 3 is the Chief Financial Officer of accused 1 company. 5] The accused contend that the company was registered with the Board for Industrial and Financial Reconstruction (BIFR) w.e.f. 03.12.2008 and was declared a sick unit on 16.07.2009 and a direction under Section 22­A of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) restraining the company from disposing of the assets was issued. 6] The accused contend that the company was in the business of manufacturing and selling rayon, yarn, nylon, tyre, cord and chemicals and has a manufacturing unit at Mohone, Kalyan, District Thane. The company entered into coal supply agreement with Western Coal Fields Limited, Nagpur to cater to the coal requirements of the manufacturing unit. Complainant 1 M/s Fuel Corporation of India acted as an agent of accused 1 company for lifting the coal and transporting the same to the manufacturing unit of the accused company. It is contended that complainant 1 was also providing trade credit to the accused company for the cost of coal ....
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....as not signed by the learned Magistrate. This Court vide order dated 31.08.2017 directed the learned Magistrate to reconsider the issuance of process. 11] The accused contends that on 25.09.2017 the complainants filed an application for amendment of the complaint. The accused contends that although the submission was that the amendment is formal in nature and seeks to bring on record the change of registered office address of the accused company, in the pleadings incorporated in proposed paragraph 2, material changes to the original pleadings were affected. The learned Magistrate vide order dated 07.12.2017 allowed the application for permission to amend the complaint reasoning that no prejudice will be caused to the accused. 12] It is contended that the complainants filed an application to issue process against the accused on 26.02.2018 and sought permission to issue summons by registered post acknowledgment due. Even before the issuance of process, the learned Magistrate directed the issuance of summons which were made returnable on 07.04.2018. 13] The accused aver that the learned Magistrate directed issuance of process for offence punishable under Section 138 of the Act vide....
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.... can be taken to the order of issuance of process dated 20.04.2018. 22] The complainants then contend that Section 22 of the SICA as then, stood did not contemplate stay or suspension of criminal proceedings. The next submission is that the restraint order stood revoked due to abatement of the proceedings w.e.f. 01.12.2016. The complainants also rely on the decision in M/s. Kusum Ingots & Alloys Ltd. to contend that criminal proceedings were not contemplated even by the then existing Section 22 of the SICA. 23] The complainants contend that the restraint order which is the basis of the challenge to the issuance of process is not placed on record. Reference is made to internal page 80 of the paper­book and to the following observations in the summary proceedings dated 22.01.2014 of BIFR. "However, if the unit is working the current assets could be utilized for running day­to­day operations, subject to keeping proper records thereof and routing all transactions through the account with the company's financing bank(s) only." The complainants then rely on the decision in Harshad Jayprasad Bakshi v. State of Maharashtra and another reported in 2014(2) Mh.L.J. 95 and....
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....ation or consideration of the scheme under S 18; and (b) during the period beginning with the recording of opinion by the Board for winding up of the company under sub­section (1) of S 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 conditioned 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 S 22A 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 for the alleged offence under S 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 w....
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.... period expired. In view of the enunciation of law in paragraph 19 in Kusum Ingots, the seminal issue is whether the accused company was declared sick and a restraint order under Section 22­A of the SICA was issued prior to the issuance of the cheques or the expiry of the 15 days statutory period. 27] It is not in dispute that the accused company was declared sick vide BIFR order dated 16.07.2009. However, the complainants contend that the restraint order was not absolute and the observations in paragraph 19 of Kusum Ingots would not come to the rescue of the accused. Paragraph 2.10.1 of the order dated 16.07.2009 reads thus: 2.10.1 Having considered the submissions made and the material on record, the Bench observed that there being no valid objections to the company's sickness from the parties present today and considering that the company fulfilled the various criteria for sickness under SICA, the Bench was satisfied that the company had become a sick industrial company in terms of section 3(1)(o) of SICA. The company vide their letter dated 15.07.2009 has requested the Board to appoint Punjab National Bank as Operating Agency (OA). In view of this the Bench noted tha....
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.... which is allegedly outstanding against the accused company is arrived at after adjusting the payments made by the accused company from 2006­2007 onwards against the coal and transportation cost incurred by the complainant company from 2006­2007 till 2008­2009. The averment in the complaint is that there is no transaction between the complainant and the accused after 29.07.2009. In such a situation, and taking the complaint averment at face value, it cannot be said that the permission to utilize the current assets for running day­to­day operations could have permitted the accused, even if it is assumed that there were current assets available to pay the complainant company, to comply with the statutory notice. 29] The submission of the learned counsel for the complainants that in view of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 coming into force w.e.f. 01.12.2016, the statutory disability to prosecute the accused is removed, cannot be countenanced. Nor it is necessary to consider the provisions of the saving clause in juxtaposition with Section 6 of the General Clauses Act, 1897. The statutory immunity available under Section 22 of th....