Pankaj Mehra And Anr. Etc vs State Of Maharashtra And Ors

The Supreme Court ruled that a company cannot evade penal liability under Section 138 of the Negotiable Instruments Act merely because a winding-up petition was pending at the time of the cheque's dishonor. The Court clarified that the liability under Section 138 persists despite the initiation of winding-up proceedings, as the provisions of Section 536(2) of the Companies Act do not create a legal disability to make payments until an order for winding up is passed. Consequently, the appeals against the Bombay High Court's decision were dismissed, affirming the criminal proceedings against the company and its directors.