Section 138 of the Negotiable Instruments Act,1881
Querist :
Anonymous
(Querist) 16 June 2011
This query is : Resolved
A Company A had filed a case u/s 138 of the NI Act,1881 against another Company B
1. Company B has gone into liquidation and its Managing Director and the Promoter passes away.The Official Liquidator hasnot appeared at all.
2. Company A is merged with another Group Company but doesnot disclose this fact before the Court.
In view of the above,what shall be the implications of the case ?
PALNITKAR V.V.
(Expert) 16 June 2011
Depends on the clauses of merger agreement. If the merger is with all the assets and liabilities without any reservation whatsoever, then non disclosure of the fact of merger would be unfair.If A does not take steps to bring on record some representative of B, then the case will have to dismissed for non prosecution.
Guest
(Expert) 22 June 2011
Yes, it depends upon the merger agreement (company A)plus managing director is also liable ..if the director is alive also the official liquidator can manage all this debt.
