Allowed¶63

P.Umashankar v. Top Thread Mills

Madras HC3 Sept 2025CRL RC/1285/2025

Case brief

AI extract

What is this about?

Official Liquidator necessary party; impleadment of liquidator in cheque/NI Act prosecution against wound-up company; amendment of criminal complaint proceedings; S.141(2) Negotiable Instruments Act; S.35(1)(k) IBC powers of liquidator; C.C.Nos.97 and 87 of 2017, JM FTC Tiruppur; Crl.M.P.Nos.6653 and 6651 of 2021 allowed; Crl.M.P.Nos.7613 and 7614 of 2022 dismissed and set aside; M.P.Shan Tex Private Limited winding up; Top Thread Mills complainant; P.Umashankar erstwhile Managing Director; P Atchutas Ramaiya Liquidator; Criminal Revision CRL RC Nos.1285 and 1286 of 2025; Madras High Court; T.V.Thamilselvi J.; order dated 03-09-2025.

What did the court decide?

The impugned orders passed by the learned Magistrate in Crl.M.P.Nos.7613 and 7614 of 2022 are set aside and both Criminal Revision Cases are allowed. ¶63

P.Umashankar Vs Top Thread Mills — Insolvency and Bankruptcy | Madras HC (2025)

What the court decided

AI extract

Outcome

The impugned orders passed by the learned Magistrate in Crl.M.P.Nos.7613 and 7614 of 2022 are set aside and both Criminal Revision Cases are allowed.

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Issue for consideration

Whether the official liquidator of the wound-up 1st accused company (M.P.Shan Tex Private Limited) is a necessary party to the cheque cases in C.C.Nos.97 and 87 of 2017, so that the complainant's petitions in Crl.M.P.Nos.7613 and 7614 of 2022 to implead him and carry out consequential amendment ought to have been allowed.

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Court's answer

The official liquidator is a necessary party to the proceedings: the first accused company was wound up by the official liquidator (letter dated 27.10.2013), the subject cheques are of the year 2015, and all records pertaining to the 1st accused company are now in the hands of the official liquidator.

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Ratio / Principle

The learned Magistrate's dismissal of Crl.M.P.Nos.7613 and 7614 of 2022, refusing the 1st respondent/complainant permission to implead the official liquidator and carry out the necessary amendments, is erroneous and liable to be set aside.

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Detailed headnote1 paragraphs

Criminal Revision (Madras High Court, T.V.Thamilselvi J., 03-09-2025) — Common order in CRL RC Nos.1285 and 1286 of 2025. Cheque cases C.C.Nos.97 and 87 of 2017 before JM FTC, Tiruppur against M.P.Shan Tex Private Limited (1st accused, since wound up) and its erstwhile Managing Director P.Umashankar (2nd accused/petitioner). The complainant's earlier petitions Crl.M.P.Nos.6653 and 6651 of 2021 to implead the Official Liquidator were allowed; the follow-up petitions Crl.M.P.Nos.7613 and 7614 of 2022 for impleadment and consequential amendment were dismissed on the ground that no appointment order was filed and the cheques were unconnected with the liquidation. Held: the Official Liquidator is a necessary party — the company was wound up (Official Liquidator's letter dated 27.10.2013), the subject cheques are of 2015, and all records of the 1st accused company are with the Official Liquidator; the dismissal was erroneous. Impugned orders dated 23.06.2025 set aside; both Criminal Revision Cases allowed. Counsel's grounds invoked S.141(2) of the Negotiable Instruments Act and S.35(1)(k) of the IBC.

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CRL RC No. 1285 of 2025

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 03-09-2025

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CORAM

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THE HONOURABLE MRS.JUSTICE T.V.THAMILSELVI

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CRL RC No. 1285 of 2025 & CRL RC NO. 1286 OF 2025 AND

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CRL MP NO. 14832 OF 2025 & CRL MP NO. 14828 OF 2025

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P.Umashankar

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Erstwhile Managing Director M/s,M.P. Shan Tex Private Limited, having Office at 145/A/A Parapalayam, Near Amman Koil, Mannarai Post, Tiruppur.

Petitioner in both

Crl.R.C.s

1. Top Thread Mills

Power of Attorney Holder K.P.K. Balasubramaniyam, Aged about 54 years S/o. K.P.Krishnan, Having Office at 35 Gajalakshmi Theatre Road, Tirupur.

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2.P Atchutas Ramaiya

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Liquidator of M.P.Shan Tex Private Limited, Office of Official Liquidator, High Court of Madras, Corporate Bhawan, 2nd Floor, No.29, Rajaji Salai, Chennai600001.

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Respondents in both Crl.R.C.s

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1/7

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https://www.mhc.tn.gov.in/judis

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CRL RC No. 1285 of 2025

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CRL RC No. 1285 of 2025

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PRAYER

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To set aside the impugned order dated 23.06.2025 in Cr.M.P.No.7613 of 2022 in C.c.No.97 of 2017 passed by the Honble JM FTC at Tiruppur.

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CRL RC No. 1286 of 2025

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PRAYER

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To set aside the impugned order dated 23.06.2025 in Crl.M.P.No.7614/2022 in CC No.87/2017 passed by the Honble Judicial Magistrate Fast Track Court at Tiruppur.

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In both CRL RC.s

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For Petitioner: Mr. Anirudh A Sriram For Respondents: R1 - Out Of Station R2 - Service Awaited

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COMMON ORDER

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Challenging the impugned orders passed by the learned Judicial

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Magistrate, Fast Track Court, Tiruppur in Crl.M.P.Nos.7613 and 7614 of 2022

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in C.C.Nos.97 and 87 of 2017, the petitioner/2nd accused has preferred these

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Criminal Revision Cases.

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The learned counsel for petitioner/2nd accused would submit that

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before the trial court, he filed petitions in both Criminal Cases praying to

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implead the official liquidator as a party to represent the 1st accused company.

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2/7

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https://www.mhc.tn.gov.in/judis

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CRL RC No. 1285 of 2025

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Since already the 1st Accused company was wound up by the official

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liquidator, if any proceedings is initiated against the said company, the 1st respondent/complainant has to proceed with 2nd respondent/official liquidator

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as on date, since all the documents were taken up by official liquidator on the date of liquidation. So, he filed petitions in both the Criminal Cases to implead official liquidator as 2nd respondent, but the learned Magistrate has allowed the said petitions filed in Crl.M.P.Nos.6653 and 6651 of 2021. Thereafter to carry out amendment, the 1st respondent/complainant again filed

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the petitions in Crl.M.P.Nos. 7613 and 7614 of 2022 to implead and amend the proceeding to represent the 1st accused company and the same were dismissed by the learned Magistrate holding that the 1st respondent/complainant has not filed any order copy of the appointment of official liquidator and also observed that the cheques involved in the cases no way connected with official liquidator proceedings. Therefore, he is not a necessary party. Accordingly, both petitions were dismissed. Challenging the said findings, now the petitioner/2nd accused preferred these Criminal Revision Cases.

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3/7

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https://www.mhc.tn.gov.in/judis

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CRL RC No. 1285 of 2025

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Notice sent to respondents, in which notice sent to 1st respondent was

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returned as “out of station”. The learned counsel for petitioner/2nd accused

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argues that the official liquidator is a necessary party to the proceedings, but it was failed to take note of by the trial court and prayed to set aside the findings of learned Magistrate and to allow these Criminal Revision Cases by raising following grounds for consideration:-

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(i) The trial court failed to take into account that Sec.141(2) of the Negotiable Instruments Act states that if the offence has been committed with the consent or connivance of, or attributable to, any neglect on the part of director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Since the alleged offence took place after the liquidation order, Liquidator should also be made a arty to the proceedings.

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(ii) The trial court has failed to consider that Sec.35(1)(k) of the IBC specifically allows the liquidator to institute or defend any suit, prosecution or other legal proceedings, civil or criminal in the namd and on behalf of the corporate debtor.

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4/7

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https://www.mhc.tn.gov.in/judis

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CRL RC No. 1285 of 2025

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On perusal of records, it reveals the fact that learned Magistrate

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already allowed the petitions filed by the 1st respondent/complainant in

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Crl.M.P.Nos. 6653 and 6651 of 2021 holding that the official liquidator is the

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necessary party to the proceedings. Thereafter, to implead and to follow the other consequential amendment, the 1st respondent/complainant again filed another petitions in Crl.M.P.Nos. 7613 and 7614 of 2022 and the same was not allowed by the trial judge holding that the date of appointment of official liquidator has not been stated in the petitions nor he is necessary party to the proceedings. But already the trial judge has made an observation that the first accused company was wound up by the official liquidator through his letter dated 27.10.2013 and the subject cheques involved in these case is of the year 2015. Now, all the records pertaining to the 1st accused company are under the hands of official liquidator. Therefore, the official liquidator is the necessary party to the proceedings. Contradicting the same, the learned Magistrate dismissed the petitions and not permitted the 1st respondent/complainant to implead and carry out necessary amendments as such is erroneous one and liable to be set aside. Accordingly, the impugned orders passed by the learned

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5/7

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https://www.mhc.tn.gov.in/judis

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CRL RC No. 1285 of 2025

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Magistrate in Crl.M.P.Nos. 7613 and 7614 of 2022 are set aside and these

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Criminal Revision Cases are allowed.

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03-09-2025