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2023 (10) TMI 798 - HC - Indian Laws


Issues Involved:
1. Quashing of Complaint Case under Section 138 of the Negotiable Instruments Act, 1881.
2. Applicability of Moratorium under Insolvency and Bankruptcy Code, 2016.
3. Invocation of Section 210 of the Code of Criminal Procedure, 1973.

Summary:

Issue 1: Quashing of Complaint Case under Section 138 of the Negotiable Instruments Act, 1881
The petitioners sought quashing of Complaint Case No. 4350/2018, arguing that the cheque issued had been dishonored due to a fraud involving forged signatures and RTGS transactions. They contended that they were not responsible for the affairs of the company at the time of the offence due to the commencement of the Corporate Insolvency Resolution Process (CIRP). The court, however, noted that the complaint contained specific averments against the petitioners, indicating their responsibility and involvement in the issuance of the cheque. The court also emphasized that the liability of a director who is a signatory to the cheque is higher than that of other directors. The petitioners did not deny the issuance or signatures on the cheque.

Issue 2: Applicability of Moratorium under Insolvency and Bankruptcy Code, 2016
The petitioners argued that the proceedings should be stayed under the moratorium provisions of Section 14 of IBC, 2016, as per the Supreme Court's decision in P. Mohanraj v. Shah Brothers Ispat Pvt. Ltd. The court referred to this decision and clarified that the moratorium under IBC applies only to the corporate debtor and not to the natural persons such as directors. Thus, proceedings under Section 138/141 of NI Act can continue against the directors even after the commencement of the moratorium period.

Issue 3: Invocation of Section 210 of the Code of Criminal Procedure, 1973
The petitioners contended that the trial court should have stayed the proceedings under Section 210 of Cr.P.C. due to a pending police investigation related to the same offence. The court noted that the FIR registered in Noida pertained to different offences of forgery and cheating, which were not the subject matter of the present complaint under Section 138/141 of NI Act. Additionally, the court highlighted that the police investigation was outside the territorial jurisdiction of the trial court, making Section 210 Cr.P.C. inapplicable in this case.

Conclusion:
The court found no reasons to quash the proceedings under Section 138/141 of NI Act and dismissed the petitions, allowing the trial to proceed. The judgment emphasized that any crucial facts emerging from the FIR investigation could be presented during the trial.

 

 

 

 

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