Between The Lines - May, 2016

I. Bombay High Court clarifies that proceedings under Section 138 of Negotiable Instruments Act, 1881 cannot be stayed under Section 446(1) of the Companies Act, 1956

The judgment in the case of Indorama Synthetics(India) Limited vs State of Maharashtra and Ors in CrWP No. 1280 of 2010 arises out of a reference made to the Division Bench of the Bombay High Court to reconcile conflicting views recorded in two Single Judges' judgments on the issue "Whether the expression 'suit or other proceedings' in Section 446(1) and the expression 'suit of proceedings' in Section 442, under Chapter II of Part VII of the Companies Act, 1956 (Companies Act), include criminal complaints filed under Section 138 of the Negotiable Instruments Act, 1881 (NI Act)". Since Section 442 stood repealed pursuant to enactment of the Companies (Second Amendment) Act, 2002, the judgment restricts itself to the interpretation of the term 'suit or other proceedings' in Section 446(1) as above.