Bombay High Court stays trial court order directing Venugopal Dhoot to pay interim compensation in cheque bouncing case

The Bombay High Court on Monday stayed the order of the Metropolitan Magistrate at Ballard Pier, Mumbai by which Venugopal Dhoot, Director of Videocon Industries, was ordered to deposit Rs. 6.75 crore by way of interim compensation in a cheque bouncing case..The Bench of Justice RP Mohite-Dere issued notice in the plea and stayed the impugned order till the next date of hearing..Dhoot had approached the High Court seeking to set aside the order passed by the trial court in cheque bouncing proceedings initiated by Bank of Maharashtra..The trial court order directed Dhoot to deposit 20% of the total amount (Rs. 33.75 crore) mentioned in the cheque alleged dishonoured by Videocon..Senior Advocate Abad Ponda, appearing for Dhoot, argued that his client was only the authorised signatory of the cheque issued by Videocon, and that he was not the ‘drawer’ of the cheque..Ponda relied upon judgments of the Supreme Court to argue that it was Videocon Industries that was required to make the payment as directed by the trial court, and not the Director of the company. .Dhoot's plea, filed through Advocate Akash Menon, mentioned that after the National Company Law Tribunal (NCLT), Mumbai admitted insolvency proceedings against Videocon in 2018, a resolution professional (RP) stood appointed to manage the financial and administrative affairs of the company..The RP would also be representing the company in the pending proceedings before the Metropolitan Magistrate, the High Court was apprised..Bank of Maharashtra had even raised a claim with the RP for recovery of the amounts owed to it. Thus, the plea contends, there was no need for payment of any interim compensation..The plea clarified that after appointment of the RP, the Board of Directors stood suspended and all financial and administrative affairs of the company were transferred to the RP. In light of the transfer, Dhoot had no control over the finances of Videocon..The dishonoured cheque was claimed to have been issued by Videocon as one of the several blank cheques in relation to the 'Working Capital Term Loan' executed with the Bank of Maharashtra. .Videocon allegedly issued the cheques to meet the unilateral demand of the Bank, and the cheques were not issued as security against the loan..[Read order here]