1999 (2) TMI 706 - HC - Insolvency and Bankruptcy

Summary

Issues:
1. Maintainability of a complaint under Section 138 of the Negotiable Instruments Act during insolvency proceedings.
2. Validity of the trial court's dismissal of the application for discharge by the petitioner/accused.

Issue 1: The main issue in this case was whether a complaint under Section 138 of the Negotiable Instruments Act could proceed while insolvency proceedings were pending. The petitioner argued that the criminal proceedings should be halted due to the prior insolvency petition filed by the accused. However, the court noted the history of the case, including the issuance and dishonor of cheques, the statutory notice sent to the accused, and the subsequent filing of the complaint. The court highlighted that the accused had used various tactics to delay the proceedings over the years.

Issue 2: The court emphasized that the petitioner's attempt to challenge the trial court's dismissal of the discharge application was a strategic move to prolong the litigation. The court pointed out that the petitioner had already raised the same argument in a previous quashing petition, which was rejected. The court concluded that the pendency of insolvency proceedings or interim protection did not exempt the accused from criminal liability under Section 138 of the Negotiable Instruments Act. The court dismissed the revision, directing the trial court to continue and conclude the trial without further delay.

In conclusion, the court upheld the trial court's decision, emphasizing that the petitioner's actions were aimed at prolonging the legal process. The court clarified that the insolvency proceedings did not absolve the accused from criminal liability under the Negotiable Instruments Act. The revision was dismissed, and the trial court was instructed to proceed with the trial and reach a final decision based on the observations made in the judgment.