Provisional liquidator control defeats cheque liability where dishonour is for account blocked, not insufficiency of funds.
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....Appointment of a Provisional Liquidator shifts control of the company's affairs from the board to the liquidator, and erstwhile directors become functus officio; cheques issued or presented thereafter without the liquidator's authority are not enforceable against the company. The text also states that dishonour marked "Account Blocked" in winding-up or liquidation proceedings does not satisfy Section 138 of the Negotiable Instruments Act because the essential ingredient of dishonour for insufficiency of funds is absent and the account is no longer under the drawer's effective control. On that basis, complaint proceedings under Section 138 against the company and former directors were held not maintainable.....
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