TMI Blog2000 (4) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... company as a sick industry. Once a reference has been made under section 15, the Board is empowered to conduct enquiry in such manner as it may deem fit in respect of the sick industry under section 16. It is also not disputed that in these cases, enquiry under section 16 can be said to be pending. 4. Section 22(1) on which the learned counsel for the petitioners rely reads as follows : " Suspension of legal proceedings, contracts, etc. (1) Where in respect of an industrial company, an inquiry under section 16 is pending or any scheme referred to under section 17 is under preparation or consideration or a sanctioned scheme is under implementation of where an appeal under section 25 relating to an industrial company is pending, then, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or any other law or the memorandum and articles of association of the industrial company of any other instrument having effect under the said Act or other law, no proceedings for the winding up of the industrial company or for execution, distress or the like against any of the properties of the industrial company or for the appointment of a receiver in respect thereof and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of no avail to the appellants. 7. Underlining the intention of the Legislature in this regard, the Supreme Court further observed in para 21 that in the above context it is pertinent to point out that section 138 of the NI Act was introduced in 1988 when the Act was already in vogue. Even when the amplitude of the word company mentioned in section 141 of the NI Act was widened through the explanation added to the section, Parliament did not think it necessary to exclude companies falling under section 22 from the operation thereof. If the Parliament intended to exempt sick companies from prosecution proceedings, necessary provision would have been included in section 141 of the NI Act. More significantly, when section 22(1) was amended in 1994 by inserting the words and not suit for the recovery of money or for enforcement of any security against industrial company or of any guarantee in respect of any loans or advance granted to industrial company , the Parliament did not specifically include prosecution proceedings within the ambit of the said ban. 8. A Division Bench of this Court presided over by His Lordships Umeshchandra Banerjee, CJ (as he then was) in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as held was that the provisions in section 22(1) of the Act are not attracted where the offence under section 138 of the Negotiable Instruments Act was completed before the commencement of the proceedings under section 22(1) and it, therefore, follows, according to the learned counsel, that if in any case a reference under section 15 has been made to the BIFR and enquiry under section 16 is pending before completion of the offence under section 138 of the NI Act, namely, before the expiry of the period of notice of 15 days required to be given to the accused calling upon him to pay the amount due under the cheque, then embargo under section 22(1) applies. This argument proceeds on the basis that because the Supreme Court held in that case that inasmuch as the offence was completed in respect of section 138 before commencement of proceedings under section 15, the bar under section 22 of the Act does not apply. The argument is further extended to contend that the said bar under section 22 would apply where the offence was not completed by the time reference under section 15 was made to the Board. This contention is logically untenable. 12. The concluding para of the Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proceedings that in these cases, the complaint sought to proceed against its Managing Director and other Directors. The plea in respect of accused other than the company and the Managing Director is that there is nothing in the averments in the complaint to show that they are liable by virtue of provisions under section 141 of the NI Act. Section 141 contemplates that if a person who commits an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of offence and shall be liable to be proceeded against. Sub-section (2) of section 141 further provides that where any offence under the Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of or is attributable to, any neglect on the part of, any Director, Manager, Secretary or other officer, he shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. 16. The contention is that the allegations in the complaint ..... X X X X Extracts X X X X X X X X Extracts X X X X
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