Document Fragment View

Matching Fragments

1. These are four criminal revision petitions arising out of similar orders passed in four cases u/s 138 of Negotiable Instruments Act (NI Act). Vide the impugned order, the learned Additional Sessions Judge dismissed the application of the petitioners for discharge from the case u/s 138 of Negotiable Instruments Act (NI Act). Petitioners Rajesh Jain and Rajan Bhardwaj are the Chairman and Managing Director of the company known as Vinayak Industries Ltd.. They were under debt of Rajasthan State Industrial Development & Investment Corporation Ltd. (RIICO). Petitioners sought discharge on the ground that vide order 13th February, 1996 u/s 29 of the State Financial Corporation Act RIICO had taken over the possession of the fixed assets of the company and therefore the petitioners ceased to be the persons responsible for the affairs of the company and hence not liable u/s 138 of the Negotiable Instruments Act (NI Act). The order is an under :-

"RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD, UDYOG BHAWAN, TILAK MARG, JAIPUR -5.
NO: F&R/R-641/967936 Dt: 13th /15th February, 1996.
OFFICE ORDER Shri G.S. Shekhawat, Sr. Regional Manager, Bhiwadi (in his absence Shri Rajiv Gupta, Regional Manager, Bhiwadi) of the Corporation is hereby authorised to takeover the possession of the fixed assets of M/s. Vinayak Industries Ltd. situated at G-282, 283, RIICO Industrial Area, Bhiwadi, Distt. Alwar on 20th February, 1996 and to do all necessary acts and things for that purpose for and on behalf of the Corporation in pursuance of the powers conferred on the Corporation under Section 29 of the State Financial Corporation Act, 1951.
(c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or as the case may be, to the holder in due course of the cheque within fifteen days of the receipt of the said notice.

Explanation- For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability."

7. A proper reading of Section 29 shows that the State Financial Corporation, which in the present case is RIICO, can take over the management or possession of the industrial concern as well as right to transfer by way of lease or sale and realise the property pledged, mortgaged, leased or assigned to the financial corporation. The financial corporation has to decide whether it wants to take over the management or the possession of the industrial concern or both management and possession of the industrial concern. It can also take over the right to transfer the industrial concerned by way of lease or sale and realise the property pledged, mortgaged or hypothecated or assigned to the financial corporation. In the present case, the RIICO has taken over the possession of the fixed assets of Vinayak Industries Ltd. situated at G- 282, 283 RIICO Industrial area Bhiwadi, District Alwar. The assets other than fixed assets at the address mentioned above have not been taken over by the RIICO. Further, the management of M/S Vinayak Industries Ltd. has also not taken over by the RIICO. Vinayak Industries Ltd. exists and has not gone into liquidation. The company may still have its business and assets other than those mentioned in the order dated 13th February, 1996. It cannot be said that nothing remains to manage M/s Vinayak Industries and there can be nobody responsible for the affairs of the company.

9. This judgment is on facts different from the facts in the present case, there is no allegation that Vinayak Industries Ltd. is not a running concern. Nor is the same in liquidation as DISCO was at that time. There is no allegation anywhere that nothing other than fixed assets taken over by the RIICO was available with the Vinayak Industries Ltd. In the present case, therefore it could not be said that taking over the possession was synonymous with taking over of the management. As explained earlier, the act specifically uses the two words the management and possession and a reading of the Section 29 shows that they were not meant to be synonymous except in situations where they may become so.