SOUTHERN STEEL LTD. vs JINDAL VIJAYANAGAR STEEL LTD.

The Supreme Court upheld the High Court's dismissal of the appellants' petitions to quash criminal proceedings under Section 138 of the Negotiable Instruments Act, 1881, stating that the appellants could not evade liability by claiming to be a sick company under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The Court emphasized that the purchases were made after the declaration of sickness, and the appellants had made representations to pay for the goods. The Court affirmed that the legal proceedings initiated for dishonored cheques were valid and could not be dismissed on the grounds of the appellants' financial status.