A Complaint Under Section 138 of the Negotiable Instruments Act,1881 had been filed in year 2020 against 8 accused. Now, in year 2022, 2 of those 8 accused, who were director of the same company (i.e., company A) filed a petition in higher court claiming that the company was non-existent in the year 2020 as the company has been already amalgamated with Company B in 2016 as per the order of High Court.
But the company’s status on MCA was still ‘Active’ even in year 2021.
(i) How will this amalgamation affect our case and how will you defend the company A?
(ii) Are we a bona fide complainant or the accused? Give reasons.
(iii) What is the time limit for seizing the operations of the company after amalgamation.
Let's break down your queries:
(i) **Effect of Amalgamation on the Case**: The amalgamation of Company A with Company B in 2016 means that Company A ceased to exist as a separate legal entity from that date. However, if the company's status on the Ministry of Corporate Affairs (MCA) portal was still 'Active' in 2021, it indicates a discrepancy. This could affect the case as the accused directors may argue that the complaint should have been filed against Company B, the surviving entity post-amalgamation. To defend Company A, you can argue that the amalgamation was not properly reflected in the MCA records, and the directors continued to act on behalf of Company A, making them liable under Section 138 of the Negotiable Instruments Act.
(ii) **Bona Fide Complainant or Accused**: You are a bona fide complainant if you filed the complaint based on the information available at the time, which showed Company A as an active entity. The accused directors' claim about the amalgamation does not negate the fact that the cheque was dishonored, and they were responsible for the company's obligations at the time.
(iii) **Time Limit for Seizing Operations After Amalgamation**: The operations of the amalgamated company should cease as per the terms of the amalgamation scheme approved by the High Court. Typically, the effective date of amalgamation is mentioned in the scheme, and from that date, the operations of the amalgamating company (Company A) should cease. The surviving company (Company B) takes over all assets, liabilities, and operations. If the amalgamation was effective in 2016, Company A should have ceased operations from that date.
For precise legal advice and to address any discrepancies, consulting a local legal expert is recommended.
