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13. Mr. Manohar showed to Court section 138 of the Negotiable Instruments Act. He submitted that under section 138 of the Negotiable Instruments Act, an offence is deemed to have been committed only after the three conditions laid down in the proviso to the said section were fulfilled. He submitted that therefore the offence is deemed to have been committed only if the drawer of the cheques "fails to make payment" of the money to the payee or to the holder in due course within 15 days of the receipt of notice as stipulated in section 138. He submits that therefore till the expiry of the period of 15 days, there is no offence. He further submits that an offence can only be deemed to have taken place if there was "failure to make payment". He submits that a drawee or holder of a cheque cannot be elevated to a position of a secured creditor or put on a level higher than an unsecured creditor. He submits that there wilt be no difference between a drawee or a holder of a cheque and a person who holds a promissory note or a hundi. He submits that if before the period of 15 days is over, any circumstance intervenes which makes it impossible to make payment, then there can be no "failure to make payment". He submits that thus there can be no offence under section 138 of the Negotiable Instruments Act. He submits that if within this period of 15 days or earlier a petition for winding up of the company has been presented, then the provisions of section 536(2) of the Companies Act would come into effect. He submits that then there is a legal bar and there can be no disposition of property by the company or its Directors. He submits that section 141 of the Negotiable Instruments Act, makes it clear that, in cases where an offence under section 138 is committed by a company, persons who at the time of the offence were in charge of and responsible to the company shall also be deemed to be guilty of the offence. He submits that if therefore a company itself cannot make payment or dispose off any of its property then the persons who are in charge of the company also cannot make payment or dispose off any property. He submits that where the law makes a transaction void, the law is in effect laying down a restriction on the parties preventing them from entering into a transaction which is void. He submits that in such cases parties cannot be expected to and even courts cannot direct parties to perform acts or things which are not permitted by law or which are illegal.

52. To be immediately noted that there is no such submission in respect of Atash Industries (India) Limited. In fact, on a query from Court, it was clarified that Atash Industries (India) Limited is not willing to make such a statement. It must be mentioned that in fact Atash Industries (India) Limited has filed proceedings under the Board for Industrial & Financial Reconstruction and, therefore, it is clear that they are not willing to be wound up.

53. We are unable to accept this submission. As set out above, it is clear that there was no payment within the period of 15 days after receipt of the notice. Therefore there was a failure to make payment. Thus at the end of the period of 15 days, the offence is deemed to have been committed. The offence was therefore completed at that point of time. We are in agreement with the submission that a subsequent order appointing a Provisional Liquidator or winding up the company can have no bearing on the proceedings under section 138 of the Negotiable Instruments Act once the offence is deemed committed prior to such an order being passed. If prior to the order of winding up or appointment Provisional Liquidator an offence has already been committed then the subsequent order cannot absolve the company or its Directors of the offence nor give rise to any defence in the proceedings under section 138 of the Negotiable Instruments Act. To be remembered that the subsequent order would only relate back and affect dispositions of property or payments made. In proceedings under section 138 of the Negotiable Instruments Act the deemed commission of offence is not by virtue of any disposition of property or payment but the by virtue of any non-payment. Thus once there is "failure to make payment" during the period of 15 days from receipt of notice, the subsequent order of winding up or appointment of Provisional Liquidator does not absolve the failure during the period of 15 days. For this reason we do not accept the submission of Mr. Manohar that the subsequent order appointing the provisional liquidator and also that the certainty of an order of winding up being passed in case of Orkay Industries Limited absolves the offence which has already been committed much earlier.

54. Mr. Manohar also submitted that there is a conflict between the provisions of section 138 of the Negotiable Instruments Act and the provisions of section 536(2) read with section 441(2) of the Companies Act. He submitted that a conflict arises because if during the pendency of winding up proceedings, certain payments were made or dispositions took place then on an order of winding up being passed, they would definitely relate back. He submitted that it is very possible that the winding up petition may remain pending for a long period of time and it may be years before the final order of winding up is passed. He submitted that in the meantime prosecution and proceedings under section 138 may proceed and may result in conviction and sentence. He submitted that if thereafter a winding up order is passed and the same relates back to the date of the filing of the petition then there would have been miscarriage of justice inasmuch as the company and/or its Directors would have been prosecuted and convicted for an act which is void. He submitted that as there is a conflict between these two provisions, the provisions of the Companies Act must prevail. In this behalf he pointed out that under the Negotiable Instruments Act and in section 138 there is no non obstante clause which provides that the provisions of the Negotiable Instruments Act or section 138 would apply over the provisions of any other Act. He submitted that on the contrary, section 138 provides that it is without prejudice to the other provisions of the Act. He submitted that therefore section 138 does not prevail over the other Act and cannot prevail over the provisions of the Companies Act.

56. Mr. Manohar also submitted that till the disposal of all the winding up petitions there should be a stay of the proceedings under section 138 of the Negotiable Instruments Act. These submissions were based on the same grounds on which the proceedings were sought to be quashed. In our view, there can be no stay of the proceedings under section 138 of the Negotiable Instruments Act. As stated above, these proceedings have no bearing and are entirely unrelated and unconnected with the pending petitions. Even if an order of winding up is now passed and/or the order appointing Provisional Liquidator can have no effect on the proceedings under section 138 of the Negotiable Instruments Act. Therefore, there can be no stay of these proceedings. The authority relied upon by Mr. Manohar in the case of Sunil Chandra has no relevance at all. That was a case where the Company Court in exercise of its power under the Companies Act had granted a stay of proceedings. In this case the Company Court has granted no stay of proceedings. In view that we have taken, we seen no reason to grant the stay of the proceedings under section 138 of the Negotiable Instruments Act.