G.R Bhattacharjee, J.:— Midnapore Commercial Company, the opposite party No. 2 herein filed a petition of complaint under section 138 of the Negotiable Instruments Act against the Baranagore Jute Factory PLC (Pvt. Ltd. Company) as accused No. 1 and two others namely, Radheshyam Ajitsa-ria and Raj Kumar Nemani as accused No. 2 and accused No. 3 respectively on the allegation that the accused Nos. 2 and 3 were looking after the day to day business of the accused company and were responsible for the conduct of the business of the said company and that the complainant company sold raw jute to the accused company and in discharge of the existing liability two cheques were issued in favour of the complainant company on 21st July, 1990 for Rs. 64,050/- and Rs. 77,385/- respectively, but the cheques on presentation were dishonoured by the drawee bank by returning the same for referring to the drawer thereby indicating that there was no sufficient fund in the bank account of the accused company to honour the said cheques issued in discharge of existing liability and that the cheques were dishonoured ultimately (again) on 10th November, 1990 and then notice was duly issued by the complainant to the accused demanding payment but the same having not been complied with the complainant field the petition of complaint for prosecuting the accused persons under section 138 of the Negotiable Instruments Act. The accused persons filed an application before the learned court below praying for staying further proceeding of the case, but the learned court below after hearing the parties rejected that application and threafter the matter has come up before this court in revision.

2. It is the case of the revisionist that this court on 28th October, 1987 passed an order for winding-up the accused company in C.P No. 2 of 1987 and the Official Liquidator took over the possession of all assests and properties of the company. Subsequently on the 15th September, 1988 Manjula Bose, J. passed an order appointing a Committee of Management to run and manage the Jute Mill Unit of the accused company and thereafter by an order dated the 30th November, 1988 the Supreme Court in Civil Appeal No. 4022 of 1988 sanctioned a scheme for running the said Jute Mill by the Committee of Management appointed by the High Court and pursuant to the said order passed by the Supreme Court this court by an order dated the 16th June, 1989 made a detailed scheme for running of the said Jute Mill by the Committee of Management. In this background, Mr. Pradip Ghosh on behalf of the revisionist argued two points mainly. The first point of his argument was that the prosecution on the basis of the complaint was not maintainable under section 446 of the Companies Act, 1956 as no leave of the court which was winding-up the company was taken for the prosecution as required under the said section. The second point argued by Mr. Ghosh was that the Committee of Management of the Jute Mill having been appointed by the High Court for running the Mill during the pendency of the proceeding in the High Court its position was similar to the position of Page: 192a receiver appointed by court and therefore the members of the Committee of the Management were not liable to be prosecuted without the leave of the court appointing the committee.

3. Let us now take up the first point argued by Mr. Ghosh. It is the contention of the accused persons that the winding-up order in respecl of the accused company was passed by the High court on 28th October, 1987 and pursuant to the said order the Official Liquidator took over the possession of all assests and properties of the said company. It appears that Raj Kumar Nemani who is the accused No. 3 moved an application before the High Court for an order staying the winding-up proceeding permanently and for constituting a Committee of Management with the persons mentioned in the scheme submitted by him for revival of the company pending disposal of his application. Manjula Bose, J. in the order dated the 15th September, 1988 (vide, Annexure-D to the revisional application) primarily in the interest of the workers of the Mill and also in the interest of the unsecured creditors and for ensuring benefit for all, considered it advisable to appoint an ad hoc Committee of Management for the purpose of immediate reopening of the Mill as contemplated by the scheme submitted by said Nemani and accordingly appointed the Committee of Management on an ad hoc basis by way of interim arrangement, without prejudice to the rights and contention of the parties and directed the said committee to take steps for re-opening of the Jute Mill and to run the same in terms of the scheme. At the same time by the same order the learned Judge also directed the Official Liquidator to take possession forthwith and remain in possession of the company and to complete the inventory which was yet to be completed as also of the finished goods and to take the assistance of a valuer from the panel of valuers of the High Court. The learned Judge, however, made it clear that the Committee of Management was appointed on an ad hoc basis and the said committee would have no power to charge or hypothecate any assests of the company. It was also made clear by the learned Judge that the Official Liquidator would continue in possession of the Mill but would not interfere with the management of the Mill by the ad hoc committee appointed by the court for the purpose of running the Mill. By the same order the learned Judge also appointed one Mr. M.A Latiff, Advocate, a Special Officer for the purpose of calling a meeting of the unsecured creditors of the company and for placing before them the scheme under which the ad hoc Committee of Management was appointed as well as a rival scheme which was also placed before the court. There are also subsequent orders of the High Court as well as of the Supreme Court which are however not very material for our present purpose. From what has been stated above it appears that an order for winding-up the accused company was pasesd by the High Court. During the continuance of the order the court appointed an ad hoc Committee of Management for re-opening and running the Mill for the benefit of the workers and the unsecured creditors. There was however Page: 193no order staying the operation of the winding-up order or the proceeding. Mr. Tapan Kumar Dutta the learned Advocate appearing for the complainant opposite party however submitted that section 446 of the Companies Act, 1956, in view of the facts and circumstances, is not attracted in this case inasmuch as the move taken by the court by appointing the ad hoc Committee of Management as an interim arrangement, for all practical purposes, was a move for revival or resuscitation of the company and not for winding-up the same and that being so section 446, considered in the spirit underlying the section, is not attracted here.

4. In this connection, we may profitably look to the provisions of section 446 of the Companies Act which is re-produced below :

“Section 446. Suits stayed on winding-up order:—

(1) When a winding-up order has been made or the Official Liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of winding-up order, shall be proceeded with, against the company, except by leave of the court and subject to such terms as the court may impose.

(2) The court which is winding-up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of—

(a) any suit or proceeding by or against the company;

(b) any claim made by or against the company (including claims by or against any of its branches in India);

(c) any application made under section 391 by or in respect of the company;

(d) any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in course of the winding-up of the company;

whether such suit or proceeding has been instituted, or is instituted, or such claim or question has arisen or arises or such application has been made or is made before or after the order for the winding-up of the company, or before or after the commencement of the Companies (Amendment) Act, 1960.

(3) Any suit or proceeding by or against the company which is pending in any court other than that in which the winding-up of the company is proceeding may, notwithstanding anything contained in any other law for the time being in force, be transferred to and disposed of by that court.

(4) Nothing in sub-section (1) or sub-section (3) shall apply to any proceeding pending in appeal before the Supreme Court or a High Court.”

Page: 1945. I have carefully considered the submission of Mr. Dutta but I am unable to pursuade myself to hold that section 446 of the Companies Act will not be attracted simply because an ad hoc Committee of Management has been appointed by the court for re-opening and running the Mill with the object of reviving the company where the other conditions necessary for attracting section 446 have been fulfilled. As I have already mentioned there has been an order of the court for winding-up the company. In spite of the appointment of the ad hoc Committee of Management the Official Liquidator was asked to take possession of the company and remain in possession of the company and to complete the inventory which was yet to be completed as also the finished goods and to take assistance of a valuer from the panel of valuers of the High Court. The Official Liquidator was also directed, by the very same order by which the ad hoc Committee of Management was appointed, to continue in possession of the Mill, of course without interfering with the management of the Mill by the ad hoc Committee appointed by the court for the purpose of running the Mill. After a winding-up order is passed by the court the Official Liquidator is required to function in a manner which serves the purpose of beneficial winding-up of the company. There is no doubt that even after a winding-up order has been passed the court may in an appropriate case revoke or recall the same (vide para 14 in Sudarsan Chits (I) Ltd. v. G. Sukumaran Pellai, AIR 1984 SC 1579), but nothing of the sort happened in this case. There was also no order of stay under section 466 of the Companies Act. The move taken by the court as an interim arrangement to get the company revived, if possible, by appointing an ad hoc Committee of Management, even if it fails in its objective of revival may still serve as a step in aid of beneficial winding-up of the company by generating more resources or funds for satisfying the creditors of the company as best as possible. Therefore the appointment of the ad hoc Committee of Management cannot be construed, in the facts and circumstances of the case, as ipso facto a negation of the factors which are otherwise plainly attracted in this case for invoking section 446 of the Companies Act. It is needless to mention that a plain reading of section 446 of the Companies Act will show that the said section is applicable also to criminal proceedings. Therefore there is no escape from the conclusion that the section 446 of the Companies Act is applicable in the present case.

6. Mr. Ghosh also submitted that since in this case the offence has been committed by the company, if at all, the liability of the other two accused persons who are allegedly looking after the day to day business of the accused company and are responsible for the conduct of the business of the said company, is a vicarious liability if at all, under section 441 of the Negotiable Instruments Act for the offence committed by the company under section 138 of the said Act and therefore they cannot be prosecuted separately or independently if the company cannot be prosecuted and as Page: 195such the criminal proceeding in the court below is not tenable in respect of all the accused persons without the leave of the court under section 446 of the Companies Act. In this connection Mr. Ghosh attracted my attention to the decision of a Division Bench of this court in Dilip Kumar Jaiswal v. Debapriya Banerjee, 1991 C. Cr. L.R (Cal) 171 where it has been held that the liability to make payment being that of the limited company, it was the limited company who was the drawer of the cheque and not the petitioner who was one of its Directors and that the petitioner, being at the time of issuing of the cheque in charge of the business of the company, issued the cheque for and on behalf of the limited company and therefore it was a cheque issued by the limited company and as a limited company has to Act through its instrumentality, such as, a Director or a Secretary or any other principal officer, the petitioner as Director signed that cheque but that would not make him the maker of the cheque and the limited company in question must be held to be the maker of the cheque. In my opinion there is force in the contention of Mr. Ghosh as supported by the said decision of this court. According to the allegations made in the petition of complaint the offence was committed under section 138 N.I Act by the accused company as the cheque issued was the cheque of the company to be drawn against the account of the company maintained in the bank. The liability of the other two accused persons is a vicarious liability, if at all, under section 141 N.I Act. In the circumstances, they also cannot be prosecuted without the leave of the appropriate court, in respect of the very same transaction for which the primary responsibility is that of the company and there is only a vicarious liability and for which the company cannot be prosecuted without the leave of the court under section 446 of the Companies Act. The position perhaps would have been different if the accused No. 2 and the accused No. 3, instead of incurring mere vicarious liability, would have incurred any independent personal liability unconnected with the liability of he accused company to face prosecution for which leave is necessary. In the facts and circumstances of the present case I however hold that the criminal prosecution against all the accused persons is not tenable without the leave of the concerned court under section 446 of the Companies Act.

7. There is no doubt that in the present case the prosecution has been filed without obtaining necessary leave under section 446 of the Companies Act but the question is whether the proceeding itself should be quashed for that reason. In this connection, I would refer to the decision of the Supreme Court in Bansidhar Sankarlal v. Md. Ibrahim, (1971) 41 Company Cases, 21 where the Supreme Court rather approved the decision of the Calcutta High Court in Suresh Chandra v. Bank of Calcutta, (1951) 21 Company Cases, 110 where this court held that the High Court has jurisdiction to grant leave to proceed with the suit or other proceedings against a company in liquidation even if such leave was not obtained for its commencement. Therefore even if the criminal proceeding was instituted without the leave of the Page: 196appropriate court under section 446 of the Companies Act this defect can be cured by obtaining leave subsequently. In Zahama Bee v. Reliable Corporation (P) Ltd., (1974) 44 Company Cases, 483 it has been held by the Andhra Pradesh High Court that the object of section 446 was only to safeguard the company from being subjected to liability or being deprived of its rights and claims without the knowledge of the winding-up court and therefore the leave of the court can be obtained even subsequently and with retrospective effect. I fully agree with the said decision of the Andhra Pradesh High Court. There is no doubt that if leave can be granted by the appropriate court subsequent to the institution of the proceeding the same can be granted also with retrospective effect, otherwise in some cases the very purpose of granting leave may be frustrated. As for example, a prosecution for an offence under section 138 of the Negotiable Instruments Act is required to be instituted within one month from the accrual of the cause of action for filing the prosecution. Evidently it will be almost impossible to move the appropriate court and obtain necessary sanction under section 446 of the Companies Act within the short period of one month from the accrual of cause of action for prosecution for an offence under section 138 N.I Act and therefore any leave or sanction for prosecution, in a fit case, for an offence under section 138 N.I Act must have to be given with retrospective effect to make the sanction meaningful, purposeful and effective. Again there may be cases where the person or persons appointed by the court might have been acting without disclosing that they were appointed by the court or were acting and functioning under the authority of an appointment by court and any person aggrieved by such act may bring legal action for the same in the ordinary manner without being aware of the facts which would necessitate leave of the concerned court for such action. The aggrieved person bringing the action may, in such case, for the first time come to know of the special facts, only after filing of the action, from the objection raised by the person or persons proceeded against and in such a situation it will be a flagrant failure of justice, for no fault of the aggrieved person, to hold that no leave can be obtained with retrospective effect which will only encourage fraudulent transactions with impunity by misuse of the protective cover of the appointment made by the court. The irresistible conclusion consistent with the principles of justice, therefore, is that in appropriate cases the court will be entitled not only to grant leave subsequent to the initiation of the prosecution or other legal action but such leave may also be granted in appropriate cases with retrospective effect to make it effective, meaningful and purposeful. In this connection, I would also like to refer, in passing, to a decision dated the 16th February, 1993 of a learned Single Judge of this court in Criminal Revision No. 1550/91 (Committee of Management for Barranagore Jute Factory v. Atish Dipankar Chowdhury) which has been placed before me by Mr. Ghosh. In that case the prosecution was quashed it seems, for a different reason that there the Committee of Management was prosecuted, but here in the present case the Page: 197company itself has been prosecuted. Moreover, in the said decision no point was raised or considered as to whether leave can be granted subsequently. In the present case I however find that although the prosecution has been filed without the leave of the court, the defect can be cured by obtaining leave of the court subsequently before the proceeding is finally decided.

8. Now I come to the next branch of the argument of Mr. Ghosh that the members of the ad hoc Committee of Management appointed by the court enjoys a position similar to that of a receiver appointed by a court and as such they cannot be prosecuted without the leave of the court. In this connection Mr. Ghosh referred to a decision of this court in Banwarilal Agarwalla, Tenant… v. Sudhamoy Basu, Reciver…Opposite Party., 59 CWN 481 where it has been observed that the rule requiring leave to sue a receiver is not based on any statutory authority but had its origin or reasons on consideration of public policy and that it is an ancient rule of salutary import which has for all practical purposes become a part of the law of the land. It has been further observed therein (at page-484, ibid) that its application is not limited to suits strictly so-called but also extends to other legal proceeding. In that decision it was however observed (at pages 490-491, ibid) that it is now well established in this court and in the other High Courts as well that the absence of leave at the initial stage is not necessarily fatal to the particular proceeding and that in an appropriate case leave may be obtained subsequently and such subsequent leave may well suffice in law to cure the defect arising from the non-taking of leave prior to the institution of the proceeding. That leave is necessary for prosecuting a, receiver appointed by the court has also been held by this court in Rambadan Chaubey, 1982 (II) CHN 360 and Golak Pati Mahato v. State of West Bengal, 1990 (II) CHN 222. In Everst Cold Co. v. State of Bihar, AIR 1977 SC 2040 also it has been held by the Supreme Court that permission of the court is necessary for legal action against a receiver appointed by the court, but prior permission of the court appointing the receiver is not the condition precedent to the enforcement of the cause of action, nor is it so grave a vice that later leave sought and got before the decree has been passed will not purge it. It has been held therein that if, before the suit terminates, the relevant court is moved and permission to sue or to prosecute further is granted, the requirement of law is fulfilled, but of course failure to secure such leave till the end of the lis may prove fatal. In Corporation of Corporation Of Calcutta… v. Sudhamoy Bose…., AIR 1960 Cal 444, it was held by this court that a receiver of property appointed by a court cannot be prosecuted for an alleged offence under the Calcutta Municipal Act, in connection with the duties of a receiver as such, without the permission of the court appointing him. The court at page 445 in paragraph-10 of the said decision (ibid) observed thus :

“It must not be forgotten that the receiver is an officer of the court and Page: 198but for the salutary provision of leave to prosecute the work of the receiver may be made impossible by flooding him with frivolous criminal cases as well as civil suits. The authority of the court, whose officer he is, is not to be obstructed light-heartedly or brought into contempt by designing people when the receiver is prima facie acting within his rights”

(emphasis supplied).*

Again, in paragraph-13 (ibid) it has been observed thus :

“……..it cannot be said that the receiver was acting in excess of his duties as a receiver, far less in violation of these. Permission or leave of the court therefore in any case was necessary.”

9. Now the question that falls for consideration is whether the principle that leave of the court is necessary for taking any prosecution or legal proceeding against a receiver appointed by a court in respect of anything done by him in connection with the discharge of his function as such receiver is also applicable to the prosecution or legal proceeding against the members of the ad hoc Committee of Management appointed by the court. It has been argued by Mr. Ghosh that the principle applies in such a case. The reason why leave is necessary for bringing any legal proceeding against the receiver is that the receiver appointed by the court is an officer of the court so far as the discharge of his function as received is concerned and the court generally appoints a receiver for the purpose of ensuring beneficial management of an affair or for the preservation of any property or the prevention of mis-management of an affair or of wastage of any property which has been placed or brought under the control or supervision of the court in connection with any lis. In this background the very purpose of smooth and meaningful management of an affair or property under the control of the court would be frustrated if the receiver is exposed to threats of suits, prosecutions and others legal proceedings indiscriminately by motivated persons without the leave of the court. This is however not to say that the receiver is immune from legal action for his lapses, if these by any. On the other hand the receiver is also exposed to liability under law for his illegal acts and he is also entitled to protection of law as may be applicable in the facts and circumstances of a particular situation. The requirement of leave is to ensure that a receiver is not unduly harassed by being exposed to frivolous action at the instance of motivated quarters for any oblique purpose and that the authority of the court is not weakened, threatened or exposed to contumacious misadventures by undue harassment of its appointed delegate or officer in respect of functions discharged by him as such delegate or officer. There is therefore no reason why the same principle also should not apply in respect of any suit, prosecution or other legal proceedings against the members of the ad hoc Committee of Management appointed by the court for the purpose of doing something in respect of an affair or property Page: 199which has been placed or brought under the control or supervision of the court. In the present case the court passed an order for winding-up the company and placed the company and its property under the possession of the Official Liquidator. By appointing an ad hoc Committee of Management and requiring such Committee to run the Mill of the company free from any interference by the Liquidator virtually the court has sliced out a portion of the authority and function of the Official Liquidator in respect of the Mill and has entrusted the same to the ad hoc Committee of Management. Although the Committee will be functioning independently of the Official Liquidator in the matter of re-opening and running the Mill yet the Committee is answerable to the court which appointed it and will be subject to the directions and guidence which such court may give to the Committee from time to time. In fact from the materials placed it appears that such directions also have been given by the court to such Committee from time to time as was considered necessary. In the circumstances there is no reason why the requirement of leave for suing or prosecuting the members of the Committee for anything done by them in discharge of their entrusted function should not apply. At the same time I must hasten to say that this requirement of leave to sue or prosecute will not necessarily apply to all cases of appointment made by the court. There may be occasion where an appointment is made by the court or somebody is authorised by the court to do something not on behalf of or as an officer or delegate of the court but rather independently in his own capacity bestowed on him by such appointment. As for example, a competent court may appoint someone as a trustee under section 74 of the Indian Trusts Act, 1882 or as a guardian of a minor under the provisions of the Guardians and Wards Act, 1890. There the trustee or guardian so appointed while acting as such trustee or guardian does not act as an officer or delegate of the court, but he acts in his independent capacity as trustee or guardian subject to all liabilities and protections of law. Since in such a case the appointed trustee or guardian does not hold the position of trustee or guardian as an officer or delegate of the court, although he has been appointed as trustee or guardian by the court, no leave is necessary to sue or prosecute him for any liability incurred by him for anything done as such trustee or guardian except in respect of the particular matter in the limited situation specified in section 36 of the Guardians and Wards Act. These are only some of the instances where the appointment by the court itself does not extend any additional protection to the appointee as officer or delegate of the court beyond what is otherwise available to the appointee under the statute. Leave will be necessary however where the appointment made by the court places the appointee in the position of an officer of a court for any particular purpose or of a delegate of the court for the purpose of managing or dealing with an affair brought or placed under the control and supervision of the court making such appointment.

10. Again, even in respect of a receiver the requirement of leave to sue or prosecute is confined to such acts of a receiver which have been done in Page: 200discharge of his functions as receiver while prima facie acting within his rights. The question of leave however may not arise in respect of an act of a receiver which is patently outside the scope of the entrusted functions or is manifestly in excess of the authority given to the receiver so as to render it unreferable to his functions as receiver. In the present case, for reasons I have discussed, the ad hoc Committee of Management appointed by the court is entitled to the process of the requirement of leave of the court concerned for being sued or prosecuted in respect of anything done in discharge of their functions. Here by issuing the cheques on behalf of the company or by failing to make payment in compliance with the demand of the complainant the appointed Committee of Management or its members cannot be said to have acted in violation of or in excess of their authority to discharge their function of running the mill for which the appointment has been made. In the circumstances, on the analogy of the principle applicable in prosecuting or suing a receiver I am of the opinion that in the present case also leave of the court is necessary for prosecuting the accused persons. Admittedly no such leave has been taken by the complainant in this case.

11. The question which is now to be considered lastly is whether the prosecution itself should be quashed for absence of leave of the appropriate court. I have already discussed elaborately and shown on the basis of a good number of judicial decisions that such leave can be obtained even during the pendency of the proceeding and this is the position both in respect of a proceeding coming under the purview of section 446 of the Companies Act as well as under the general law in respect of any proceeding against a receiver or against anyone holding a position analogous to the receiver. Instead of quashing the proceeding the complainant therefore should be given an opportunity to obtain the necessary leave from the concerned court. It is therefore directed that the proceeding in the court below will remain stayed initially for a period of three months from this date so that the complainant may obtain necessary leave from the concerned court in the meantime. In the event further stay is necessary for the said purpose the complaint will be at liberty to apply before the court below for extension of stay and the learned court below in that case will be entitled to pass such order on such application as may be considered proper after giving opportunity of hearing to the parties concerned. In case no application for leave is made before the concerned court within this initial period of three months or in case leave is refused by the concerned court the proceeding of the court below shall stand quashed. Nothing in this order will however affect the application of the provisions of sub-sections (2) and (3) of section 446 of the Companies Act. The revisional application stands disposed of accordingly.

Application disposed of accordingly.

K.P