9911796707
TMI Blog2023 (6) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... what flows from the above law laid down by the Hon'ble Supreme Court is that whereas recovery proceedings barred under Section 14 of the IBC are primarily civil in nature, the proceedings under Section 138 of the NI Act are criminal in nature, and both have a different set of purpose. Furthermore, the complainant approaches the Criminal Court not only for recovery of the legally enforceable debt but also for taking penal action under Section 138 of the NI Act for the offence already committed by the accused by not making the payment of the cheque amount despite the receipt of the statutory notice. Therefore, by operation of the provisions of the IBC, the criminal prosecution initiated against the natural persons under Section 138 read w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel while drawing the attention of this Court to the order dated 28.07.2022 passed by NCLT (Annexure P- 3) contends that upon passing of the admission order by NCLT, the Board of Directors of the company i.e. Respondent No.2, was suspended, and thus the petitioners have since then ceased to be the Directors of the respondent company. He submits that by virtue of interim moratorium applied by the said order, the independent recovery as well as criminal proceedings cannot continue against the Directors by virtue of provisions of Sections 14 and 96 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as 'IBC'). Learned counsel further submits that the petitioners and respondent No.2 company have now been summone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt in abeyance do not include criminal proceedings, which is the nature of proceedings under Section 138 of the N.I. Act. We are unable to appreciate the plea of the learned counsel for the Appellant that because Section 138 of the N.I. Act proceedings arise from a default in financial debt, the proceedings under Section 138 should be taken as akin to civil proceedings rather than criminal proceedings. We cannot lose sight of the fact that Section 138 of the N.I. Act are not recovery proceedings. They are penal in character. A person may face imprisonment or fine or both under Section 138 of the N.I. Act. It is not a recovery of the amount with interest as a debt recovery proceedings would be. They are not akin to suit proceedings. XXX ..... X X X X Extracts X X X X X X X X Extracts X X X X
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