IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL APPLICATION NO.2325 OF 2006 Sun Pharamceuticals Industries Ltd. .. Applicant Versus The State of Maharahstra & Ors. .. Respondents Mr.Benny Joseph with Ms.Pallavi Dedhia i/by Sanjay Udeshi & Co for the applicant. Mr.J.P.Yagnik, A.P.P for respondent No.1. Mr.Niranjan Singh for respondent Nos.2 and 3. CORAM CORAM CORAM : A.S.OKA, J. : A.S.OKA, J. : A.S.OKA, J. DATE DATE DATE ON WHICH SUBMISSION ARE HEARD : 02nd March 2009. ON WHICH SUBMISSION ARE HEARD : 02nd March 2009. ON WHICH SUBMISSION ARE HEARD : 02nd March 2009. DATE DATE DATE ON WHICH JUDGMENT IS PRONOUNCED: 13th March 2009. ON WHICH JUDGMENT IS PRONOUNCED: 13th March 2009. ON WHICH JUDGMENT IS PRONOUNCED: 13th March 2009. JUDGMENT: JUDGMENT: JUDGMENT: . This is an application under sub-section 4 of section 378 of the Code of Criminal Procedure, 1973 (hereafter referred to as the said Code). The applicant (Sun Pharmaceuticals Industries Ltd.) is the complainant. The 1st respondent is a limited company. The 2nd respondent is the Managing Director of the 1st respondent company who is alleged to be incharge of and was responsible for day to day affairs of the 1st respondent company. 2. The case made out in the complaint is that Gujarat Lyka Organics Ltd merged and/or amalgamated with (2) Sun Pharmaceuticals Industries Ltd (applicant) as per the scheme of amalgamation sanctioned by the Board for Industrial Finance and Reconstruction (BIFR) in its hearing held on 27th March 2000. It is stated that the scheme became effective from the month of April 2000. It is contended that by virtue of the said order, all the assets and liabilities of Gujarat Lyka Organics Ltd (for short "Gujarat Lyka") now belong to the applicant company including the right to take legal action on behalf of Gujarat Lyka. 3. The case made out in the complaint is that Gujarat Lyka had supplied goods worth Rs.12,42,540/- to Dee Pharma Laboratories Ltd (hereinafter referred to as the said Company). As the said Company was not having sufficient funds to pay the price of the goods, the said company requested the said Gujarat Lyka to draw a bill of exchange for the said amount. The said bill of exchange was discounted by the applicant after the same was duly accepted for payment by the said Company. Certain cheques were issued by the said Company in favour of the complainant/applicant. The said cheques were dishonoured and therefore a complaint under section 138 read with section 141 of the said Act was filed by the applicant. During pendency of the said complaint, on the request made by the said Company, its sister (3) concern i.e the 2nd respondent issued a cheque in the name of Gujarat Lyka in the sum of Rs.50,000/- dated 20th May 2000. The said cheque was presented by the applicant on 20th May 2000 for collection. On 23rd May 2000 the said cheque was dishonoured on the ground that account was freezed. Therefore, the present complaint has been filed after issuing a statutory notice. The learned Judge has passed the impugned order of acquittal on the ground that the payee under the cheque subject matter of the complaint was Gujarat Lyka which was not in existence on the date on which cheque was issued in view of order of amalgamation. The trial Court held that the applicant was neither the payee nor holder in due course of the cheque in dispute. 4. The learned counsel appearing for the applicant has placed on record a copy of the merger scheme of Gujarat Lyka with the applicant. He has also placed on record a copy of order dated 27th March 2000 passed by the BIFR. His submission is that all the assets and liabilities of Gujarat Lyka were taken over by the applicant. He invited my attention to clauses 1 to 4 of the scheme. He submitted that in view of the merger of the Gujarat Lyka with the applicant, now the applicant has stepped into shoes of the said company Gujarat Lyka and therefore the applicant is the payee of the cheque (4) subject matter of the complaint. He placed reliance on decision of Madras High Court in the case of Surendra Mal Mehta and Deepak Mehta Vs. Gillette India Ltd [(2006) 133 Company Cases 412 Madras] as well as a decision of Karnataka High Court in the case of Sri.Ashok Kumar Vs. Dr.T.R.Bhageerathi (ILR 2008 Karnataka 3865). 5. The learned counsel appearing for the 2nd respondent submitted that on the date on which the cheque was issued the payee Gujarat Lyka was not in existence. He submitted that the applicant cannot claim to be a holder in due course. He, therefore, submitted that no interference is called for with the impugned order. 6. I have given careful consideration to the submissions. It will be necessary to refer to the merger scheme of Gujarat Lyka with the applicant. Under the said scheme Gujarat Lyka is described as the transferor company and the present applicant has been described as transferee company. The scheme provides that the transfer date/date of amalgamation is 01st April 1999. My attention was invited to clause 1 of the scheme which provides that with effect from transfer date, the undertaking of the transferor company shall be (5) deemed to have been transferred to and vested in the transferee company. Clause 2b provides that the undertaking of transferor company shall include all rights, privileges, powers and authorities and all properties movable or immovable, real, corporeal or incorporeal in possession or reversion, present or contingent or of whatsoever nature of the transferor company or to which the transferor company is entitled to. It is not in dispute that the effective date under the scheme is 27th April 2000. The cheque subject matter of the complaint has been issued on 20th May 2000 favouring the company Gujarat Lyka. At this stage it will be necessary to refer to the decision of the Apex Court in the case of Saraswati Industrial Syndicate Ltd Vs. C.I.T Harayan, Himachal Pradesh, Delhi (AIR 1991 Supreme Court 70). In paragraph No.6 the Apex Court held thus: ".... But there can be any doubt that when two companies amalgamate and merge into one the transferor company loses its entity as it ceases to have its business. However, their respective rights or liabilities are determined under the scheme of amalgamation but the corporate entity of the transferor company ceases to exist with (6) effect from the date the amalgamation is made effective." Thus, the Apex Court held that from the date on which amalgamation is made effective, the transferor company ceases to exist. In the circumstances, on 20th May 2000 the payee under the cheque (Gujarat Lyka) was not in existence as the merger had already taken effect. 7. A submission was tried to be canvassed by the learned counsel appearing for the applicant that though the cheque is dated 20th May 2000 it was issued prior to April 2000. However, in the complaint as well as in affidavit in lieu of examination in chief, no such case is made out by the applicant. A specific case has been made out in affidavit in lieu of examination in chief of the authorised representative of the applicant that the scheme of amalgamation became effective from month of April 2000. 8. In the circumstances, the payee under the cheque on the date on which cheque was issued was a non-existing entity. Therefore, the applicant cannot be held to be the payee under the said cheque. The learned counsel for the applicant has not come out with the case (7) that the applicant is a holder in due course and the only submission made is that the applicant was the payee. 9. Reliance was placed by the counsel for the applicant on the decision of the Madras High Court in the case of Surendra Mal Mehta (supra). However, this decision does not decide the issue in question. The judgment of the Karnataka High Court in the case of Ashok Kumar (supra) which is pressed into service by the learned counsel for the applicant deals with a case where an individual filed a complaint under section 138 of the said Act and after his death, his legal representatives desired to prosecute the complaint under section 138 of the said Act. Therefore, the said decisions will not help the applicant. 10. The view taken by the learned trial Judge is certainly a possible view. No case is made out for grant of special leave. Application is rejected. 11. It is made clear that none of the observations made herein shall be construed as any finding on the right of the applicant to recover the amount subject matter of the cheque and the observations made herein are confined to the prayer made for grant of special (8) leave. (A.S.Oka,J)