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TMI Blog2024 (6) TMI 749X X X X Extracts X X X X X X X X Extracts X X X X ..... y Code do not automatically extinguish criminal proceedings under the Negotiable Instruments Act. Considering the totality of facts and circumstances of the case and in view of the fact that merely because of initiation of proceedings under the Code, 2016 the signatory of the cheque cannot escape from his liability, it is held that conviction recorded by Trial Court was not bad on account of initiation of proceedings under the Code, 2016. The Appellate Court did not commit any mistake by directing the applicant to deposit an amount of Rs. 13,73,890/- as a condition precedent for suspension of sentence - application dismissed. - HON'BLE SHRI JUSTICE GURPAL SINGH AHLUWALIA For the Applicant : (By Shri Akshat Agrawal Advocate And Shri Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y said judgment of conviction, applicant filed an appeal alongwith an application under Section 389 of Cr.P.C. 4. It is submitted by counsel for applicant that applicant was the Guarantor of M/s Shree Geeta Textiles Private Limited, who has committed a default due to non-payment of borrowed debts. Accordingly, borrower moved an application under Section 94 of Insolvency Resolution Process of the Insolvency Bankruptcy Code, 2016 (hereinafter referred to as Code, 2016 ) before National Company Law Tribunal, Indore Bench for initiating/undergoing the insolvency resolution process vide Company Petition (IB)/74(MP)2022. It is submitted that as per Section 96 of Code, 2016, interim moratorium starts from the date of filing qua personal insolvency ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or an unsecured financial creditor within the meaning of the said Code is not something we can deal with as that is the matter of the proceedings under the said Code or any appeal preferred therefrom. The only issue with which we are concerned with is whether during the pendency of the proceedings under the said Code which have been admitted, the present proceedings under the NI Act can continue simultaneously or not. 17. We have no hesitation in coming to the conclusion that the scope of nature of proceedings under the two Acts is quite different and would not intercede each other. In fact, a bare reading of Section 14 IBC would make it clear that the nature of proceedings which have to be kept in abeyance do not include criminal proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19. We are unable to accept the plea that if proceedings against the Company come to an end then the appellant as the Managing Director cannot be proceeded against. We are unable to accept the plea that Section 138 of the NI Act proceedings are primarily compensatory in nature and that the punitive element is incorporated only at enforcing the compensatory proceedings. The criminal liability and the fines are built on the principle of not honouring a negotiable instrument, which affects trade. This is apart from the principle of financial liability per se. To say that under a scheme which may be approved, a part amount will be recovered or if there is no scheme a person may stand in a queue to recover debt would absolve the consequences un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to remain even at the end of the resolution process, the only consequence is that the erstwhile Directors can no longer represent it. 10. Considering the totality of facts and circumstances of the case and in view of the fact that merely because of initiation of proceedings under the Code, 2016 the signatory of the cheque cannot escape from his liability, it is held that conviction recorded by Trial Court was not bad on account of initiation of proceedings under the Code, 2016. 11. For the similar reason, Appellate Court did not commit any mistake by directing the applicant to deposit an amount of Rs. 13,73,890/- as a condition precedent for suspension of sentence. 12. Accordingly, no case is made out warranting interference. 13. The appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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