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TMI Blog2019 (7) TMI 1617X X X X Extracts X X X X X X X X Extracts X X X X ..... cheque in order to launch prosecution against the accused. A careful analysis of Section 138 NI Act reveals that the first and foremost requirement to maintain the complaint under Section 138 NI Act is that the cheque issued by the account holder must be from the account maintained by account holder with the drawer-Bank for discharge in whole or in part of any debt or other liability. In the present case, it is evident that the proceedings against the company were initiated under the provisions of IB Code 2016 and the order in terms of Section 14 of IB Code was passed on 21.07.2017. The provisions of IB Code 2016 makes it absolutely clear that whenever a corporate debtor is facing the proceedings before the adjudicating authority (NCLT), then the control and management of the said corporate debtor can be vested with the Interim Resolution Professional. There is no conflict between the parties regarding the material facts including the proceedings before the NCLT and its consequences - Petition allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... d to serve the statutory notice dated 04.10.2017 which was served upon the accused persons on 09.10.2017. The complaint further revealed that the accused had sent the reply dated 16.10.2017 to the said legal notice, wherein a false and frivolous defence had been set up to evade the payment of the dues to the complainant. Finally, as the demand raised by the complainant was not adhered to, therefore, it compelled the complainant to institute a complaint dated 13.11.2017 seeking prosecution of the accused under Sections 138, 141 and 142 NI Act. In support of the complaint, complainant-Narender Singh examined himself as CW-1 in the pre-summoning evidence and the documents Exhibit C-1 to Exhibit C-15 were also tendered. The trial Court after examining the pre-summoning evidence and the fact that the alleged cheques were dishonoured with the remarks "account blocked" proceeded to summon the accused persons for the offence punishable under Section 138 NI Act alone vide impugned order dated 14.11.2017 (Annexure P-2). In the other connected petitions summoning order in each complaint was passed on 14.11.2017, 18.12.2017, respectively. Pursuant to the notice of motion, the respondent had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e pleadings contained in the petition(s) nor has disputed the fact that the alleged notice dated 04.10.2017 was duly replied by the petitioner through his response dated 16.10.2017. On behalf of the respondent No.2, it is argued that of course the provisions of Section 138 NI Act do contemplate that the penal provisions would be attracted in case the cheque in question is dishonoured on account of "insufficient funds" or "the amount exceeds the arrangement", but these provisions have been interpreted on number of occasions by this Court as well as by the Hon'ble Supreme Court, wherein it was held that in cases where the account is "closed" or "payment was stopped" by drawer even then complaint under Section 138 NI Act would be maintainable. It is vehemently argued that on the same analogy, the complaint is maintainable as it is not disputed by the accused that the blocked account belongs to it which resulted in dishonour of the cheques. According to the respondent, the trial Court has passed the summoning order carefully after examining the material on record and therefore, the petition deserves to be dismissed. At this stage, before adverting to the merits of this case, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the period of its validity whichever is earlier; (iii) that cheque is returned by the bank unpaid. either because of the amount of money standing to the credit of the account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with the bank; (iv) the payee or the holder in due course of the cheque makes a demand for the payment of the said amount of money by giving a notice in writing, to the drawer of the cheque, within 15 days of the receipt of information by him from the bank regarding the return of the cheque as unpaid; (v) the drawer of such cheque fails to make payment of the said amount of money to the payee or the holder in due course of the cheque within 15 days of the receipt of the said notice. Here it would be appropriate to deal with the argument of the learned counsel for the petitioner that the offence would be made out only in case if the cheque is dishonoured on account of "insufficient funds" or when "the amount exceeds the arrangement with the Bank". In NEPC Micon Ltd. Vs. Magma Leasing Ltd. 1999 (2) R.C.R.(Criminal) 648, the Hon'ble Supreme Court had examined the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in M.M.T.C Ltd. and Anr Vs. Medchl Chemicals and Pharma (P) Ltd. and Anr, 2001 (1) SCC 234, wherein following observations were made:- "It has been held that even though the cheque is dishonoured by reason of 'stop payment' instruction an offence under Section 138 could still be made out. It is held that the presumption under Section 139 is attracted in such a case also. The authority shows that even when the cheuqe is dishonoured by reason of stop payment instructions by virtue of Section 139 the Court has to presume that the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability. Of course this is a rebuttable presumption. The accused can thus show that the "stop payment" instructions were not issued because of insufficiency or paucity of funds. If the accused shows that in his account there was sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then an of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the company were initiated under the provisions of IB Code 2016 and the order in terms of Section 14 of IB Code was passed on 21.07.2017. The provisions of IB Code 2016 makes it absolutely clear that whenever a corporate debtor is facing the proceedings before the adjudicating authority (NCLT), then the control and management of the said corporate debtor can be vested with the Interim Resolution Professional. It is also not disputed by learned counsel for the parties that Sh. Virender Singh already stands appointed as Interim Resolution Professional who is seized of the management and operation of the corporate debtor (accused No.1). Admittedly, the post dated cheques were given containing the dates as 27.06.2017 and 27.07.2017, but prior to the effective dates the said account was blocked, which cannot at all be attributed to the account holder, as it was a result of the order passed by NCLT, New Delhi and therefore, by virtue of the said order, the authority and control of the account holder over the account ceased to exist. At this stage, it will be necessary to note the pleadings in the impugned complaint relating to the legal notice served by the complainant and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es because Hon'ble National Company Law Tribunal, New Delhi vide order dated 21.07.2017 have blocked the account as well as moveable and immoveable properties of my client under Section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (application to adjudicating Authority) Rule 2016. The copy of the order dated 21.7.2017 is attached herewith. 6. That in reply to para No.6 of your legal notice it is submitted that my client has replied above in detail in para No.5 of the reply. 7. That para No.7 of your legal notice is wrong and denied. My client had not guilty intention from the inception and my client dishonestly with a view to cause wrongful loss to your client. 8. That para No.8 of your legal notice is matter of record. I through this legal notice all upon you to advise your client to withdraw the above said legal notice because my client will pay the amount of cheques as and when my client do the work and the Hon'ble National Company Law Tribunal, New Delhi give permission to operate the account of the company." The above averment in the present petition is not refuted either by way of filing the reply or by way o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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