IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE R.BASANT WEDNESDAY, THE 6TH FEBRUARY 2008 / 17TH MAGHA 1929 WP(C).No. 38158 of 2007(P) -------------------------- CC.2667/1989 of J.M.F.C.-I,KOCHI .................... PETITIONER: ------------ 1. M/S.AYYAPPA ROLLER FLOUR MILLS LTD., IV/798, SOUTH KALAMASSERY, COCHIN-682 033, REPRESENTED BY ITS DIRECTOR SANJAY GUPTA. 2. SANJAY GUPTA, S/O.S.K.GUPTA, DIRECTOR, M/S.AYYAPPA ROLLER FLOUR MILLS LTD., RESIDING AT SAKET ST.VINCENT CROSS ROAD, ERNAKULAM NORTH, COCHIN-18. BY ADV. SRI.S.GOPAKUMARAN NAIR (SR.) SRI.M.CHANDRA BOSE RESPONDENTS: ------------- 1. KERALA STATE INDUSTRIAL DEVELOPMENT CORPORATION LIMITED (KSIDC) CHOICE TOWERS MANORAMA JUNCTION, COCHIN-16, REPRESENTED BY ITS DEPUTY MANAGER (LEGAL) V.R.USHA. 2. STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, DEPARTMENT OF INDUSTRIES, GOVT. SECRETARIAT, THIRUVANANTHAPURAM. 3. BOARD OF INDUSTRIAL AND FINANCIAL RECONSTRUCTION, JAWAHAR VYAPAR BHAVAN, TOLSTOY MARG, NEW DELHI- REPRESENTED BY ITS CHAIRMAN. BY ADV. SRI.M.PATHROSE MATTHAI (SR.) R1 BY ADV. SRI.SAJI VARGHESE R2 BY GOVT. PLEADER SRI. GIKKU JACOB THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 06/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX PETITIONERS' EXTS. EXT.P1 TRUE COPY OF INTIMATION OF 1ST PETITIONER TO 1ST RESPONDENT DT,26.12.02. EXT.P1(a) TRUE COPY OF DO. DO. EXT.P2 TRUE COPY OF ORDER IN CRL.M.C. 782 AND 1028 OF 2006. EXT.P3 TRUE COPY OF PROCEEDINGS OF 3RD RESPONDENT. EXT.P3a TRUE COPY OF GUIDELINES EXT.P4 TRUE COPY OF STAY ORDER OF 3RD RESPONDENT. EXT.P5 TRUE COPY OF COVERING LETTER DT. 24.4.07. EXT.P5a TRUE COPY OF RELEVANT EXTRACT OF REHABILITATION PACKAGE. EXT.P6 TRUE COPY OF MINUTES OF MEETING EXT.P7 TRUE COPY OF COMMUNICATION. RESPONDENTS EXTS: EXT.R1(a) TRUE COPY OF THE JUDGMENT OF THIS COURT IN WPC 39632/03 DT.18.12.03. EXT.R1(b) TRUE COPY OF DO. DO. IN WPC 8049/04 DT.8.3.04. EXT.R1(c) TRUE COPY OF DO. DO. IN WPC 10691/04 DT.5.4.04. /TRUE COPY/ R. BASANT, J. - - - - - - - - - - - - - - - - - - - - - - W.P(C).No. 38158 of 2007 P - - - - - - - - - - - - - - - - - - - - - - Dated this the 6th day of February, 2008 JUDGMENT The petitioners are accused 1 and 2 in a prosecution launched against them by the first respondent under Section 138 of the N.I. Act. Proceedings were initiated as early as in 1989, as can be seen from the number assigned to the case as C.C.No. 2667 of 1989. About a decade has elapsed, but the trial has not commenced so far. The petitioners had come to this Court with Crl.M.C. 782 of 2006 and by order dt.21.11.2006 the prayer of the petitioners to quash the proceedings against them was rejected. This Court had placed reliance on the decision of the Supreme Court in Kusum Ingots & Alloys Ltd. v. P.P.S. Ltd. (2000 (1) KLT 846). Ext.P2 is the order passed by this Court in that proceedings. 2. After suffering Ext.P2 order, undaunted, the petitioners have again come to this Court with a grievance that the learned Magistrate has not stayed further proceedings in the matter. It is W.P(C).No. 38158 of 2007 2 prayed that directions may be issued to keep the prosecution in abeyance until the proceedings before the third respondent, BIFR, is completed. The learned counsel for the petitioners relies on the observations in paragraph 9 of Ext.P3 order passed by the BIFR as also paragraph 18 of Ext.P3(a) guidelines for preparation of rehabilitation scheme for the petitioner company. The learned counsel for the petitioners further relies on the observations in paragraph 4 of Ext.P4 order passed by the BIFR on 25.4.2006. 3. The learned counsel for the petitioners, in these circumstances, prays that though it is not open to the petitioners now to pray for quashing of proceedings in the light of the Supreme Court decision in Kusum Ingots & Alloys Ltd. (supra) and the decision in BSI Ltd. & anr. v. Gift Holdings Pvt. Ltd. & anr. (Vol.100, 2000 Company Cases 436), the petitioners' request for keeping the prosecution in abeyance may be considered favourably. 4. I have gone through all the relevant materials available. I am unable to agree that the order passed by the BIFR or the pendency of the proceedings before the BIFR or even the subsequent efforts to W.P(C).No. 38158 of 2007 3 settle the claims of all the creditors and to revive the company as revealed from Exts.P6 and P7 are sufficient to justify the prayer to keep the proceedings in abeyance. I must alertly note that the complainant has been waiting from 1989 for the redressal of his grievances and no satisfactory reasons whatsoever are urged by the petitioners to justify the prayer to keep the proceedings in abeyance. It is by now trite, and the learned counsel for the petitioners does not dispute that proposition, that the prosecution is justified notwithstanding the proceedings before the BIFR. I am of the opinion that the prayer to keep the proceedings in abeyance cannot, in these circumstances, be allowed. 5. The learned counsel for the petitioners impassionately appeals that though the proceedings are in the nature of a criminal prosecution, virtually the proceedings are for recovery of amounts due under the cheque and the gravamen of the allegation is the non-payment of the amounts in time. The counsel therefore contends that a prosecution under Section 138 of the N.I. Act must also be reckoned as a quasi- civil proceedings to coerce the company to pay the amounts allegedly W.P(C).No. 38158 of 2007 4 due. This contention cannot obviously be accepted in the light of the decision in Kusum Ingots & Alloys Ltd. The prosecution under Section 138 of the N.I. Act is for the breach of a penal liability under Section 138 of the Act and it cannot be reckoned as quasi-civil proceedings for enforcement of a monetary liability to be discharged by the indictee. 6. I am, in these circumstances, satisfied that this Writ Petition only deserves to be dismissed. The learned counsel contends that the indictee/second accused is not personally liable and that he may not be compelled to face the penal consequences for not discharging the liability of the company in respect of which proceedings are pending before the BIFR. Those submissions can certainly be made by the petitioners if and when the courts are called upon to consider the question of sentence and in the course of trial. 6. This Writ petition is accordingly dismissed. (R. BASANT) tm Judge W.P(C).No. 38158 of 2007 5