The Kerala High Court has held that an Official Liquidator can be permitted to proceed with the criminal complaints pending against a Company wound up by the High Court without the necessity of obtaining leave from NCLT.

The High Court was considering a report filed by the official liquidator in respect of the company which was ordered to be wound up as per an earlier order of the Court.

The Single Bench of Justice Viju Abraham held, “In view of the declaration of law as stated above, I am of the opinion that the relief sought for in the report can be allowed by permitting the Official Liquidator to proceed with the criminal complaints pending under Section 138 of the NI Act before the Chief Judicial Magistrate Court, Kalpetta as S.T.Nos.370 of 2016, 380 of 2016, 46 of 2022, 165 of 2022, 175 of 2022 and 68 of 2023, without the necessity of obtaining leave from NCLT.”

Factual Background

It was brought to the Court’s notice that multiple criminal cases under Section 138 of the Negotiable Instruments Act, 1881 (NI Act), were pending before the Chief Judicial Magistrate Court, Kalpetta, against the company. By an official memorandum, the company under liquidation was directed to obtain leave of the Tribunal under Section 279 of the Companies Act, 2013 to proceed with the case. In the report, permission was sought to permit the Official Liquidator to proceed with criminal complaint pending under Section 138 of the NI Act without the necessity of obtaining leave from NCLT.

Reasoning

The Bench took note of the fact that the company was wound up and orders were passed as per the provisions of the Companies Act, 1956, and it was still under the jurisdiction of the High Court. As per the Bench, in view of Section 434 of the Companies Act, 2013 and the Companies (Transfer of Pending Proceedings) Rules, 2016, the matter had not been transferred to NCLT and hence the proceedings remained before this Court.

“Since the company has been wound up as per the provisions of the Companies Act, 1956 and the matter is pending before this Court and not before the Tribunal, the provisions of the Companies Act, 1956 will apply in the present case and Section 446 of the Companies Act, 1956 which is the corresponding Section to Section 279 of the Companies Act, 2013 for obtaining leave will have no application in the present case”, it noted.

The Bench next dealt with the issue of whether leave of the Court is to be obtained for proceeding with a complaint filed under Section 138 of the NI Act, 1881. Reference was made to the judgment in Jose Antony v. Official Liquidator (1998) wherein it was held that only those criminal proceedings which relate to the assets of the company will come within the ambit of legal proceedings contemplated under Section 446 of the Companies Act, 1956. Reference was also made to the judgment of the Bombay High Court in M/s Indorama Synthetics (I) Ltd v. State of Maharashtra and another (2016).

Thus, the Bench disposed of the petition by permitting the Official Liquidator to proceed with the criminal complaints pending under Section 138 of the NI Act without the necessity of obtaining leave from NCLT.

Cause Title: Shaju.K.G v. M/s. Kalpetta Janakshema Maruthi Chits Private Limited (Neutral Citation: 2025:KER:66124)

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Justice Viju AbrahamKerala High Court

Tulip Kanth

Assistant Editor

Tulip Kanth is an Assistant Editor at Verdictum having over 5 years of experience in the field of legal journalism and editing. She extensively covers judgments of the Supreme Court, High Courts as well as Tribunals. She has previously worked with a legal publishing website where she oversaw the work of other editors and has also created updates on notifications of different Government Ministries. She holds an English Honours Degree from SGTB Khalsa College, Delhi University and has completed her LLB course with specialisation in Corporate Law from Amity University.