In this case, Pankaj Mehra and another appellant were directors of a company that issued a cheque dated 30 October 1996 for ₹5,72,432. The cheque was dishonored upon presentation on ... 26 December 1996 due to insufficient funds. A notice was issued to the company on 21 December 1996, demanding payment. Subsequently, a complaint was filed against the company and its directors under Section 138 of the Negotiable Instruments Act.​ The appellants contended that since a winding-up petition had been filed against the company on 27 May 1996, and a provisional liquidator was appointed on 21 April 1998, the company was under winding-up proceedings. They argued that any disposition of property, including issuing cheques, during this period was void under Section 536(2) of the Companies Act, and thus, they should not be held liable under Section 138 of the Negotiable Instruments Act