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TMI Blog2023 (12) TMI 1360X X X X Extracts X X X X X X X X Extracts X X X X ..... corporate debtor, which filed application under section 9 of the IBC. In the said judgment, the Hon'ble Supreme Court has held that the proceedings initiated under section 138 of NI Act falls within the scope of Section 14(1)(a) of the Code. In that judgment, at paragraph 102, the Hon'ble Supreme Court has made it clear that interim moratorium in a corporate debtor's application will not extend to the natural persons, who are prosecuted under section 138/141 of NI Act. Section 14 of IBC will apply only to the corporate debtor, the natural persons mentioned in Section 141 of NI Act continue to be statutorily liable. The Directors as Signatory or Guarantor or Person responsible for the affairs of the company, which has issued cheque to discharge its liability, can not have the advantage of their application to declare them as insolvent as an individual to seek moratorium. If such plea is entertained, then as observed by the Hon'ble Supreme Court, it will lead to absurdity. To demonstrate, for instance, in this case, if the interim moratorium under section 96 is extended to these petitioners, who are the representatives of the company, which is not a corporate debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t C.C.No: 1425/2016 taken cognizance by the Metropolitan Magistrate, Fast Track Court at Magistrate Level-V, Saidapet, Chennai, is a private complaint presented by M/s Redington India Limited through its Power of Attorney against M/s Pacific Infotech Private Limited represented by its Directors. The two Directors of the first accused Company are the petitioners herein. The trial Court vide, its judgement dated 19/06/2023 held that the first accused company and its two Directors are guilty of offence under section 138 of the Negotiable Instruments Act, 1881 for issuing cheques for Rs. 1,34,23,970/- without sufficient fund, but instructing the bank to stop payment. The trial Court sentenced these two petitioners to undergo simple imprisonment for a period of Nine months and all the accused to pay jointly the cheque amount as compensation to the complainant. 4. Against the judgement of conviction and sentence, these petitioners preferred Crl A.No.405/2023 along with application to suspend the sentence, pending appeal. The Learned Principal Session Judge at Chennai allowed the application for suspension of sentence on condition to deposit 20% of the compensation amount. The Appeal was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... solvent and for appointment of resolution professional. The Judgement of Mohanraj case is not applicable to the petitioners herein, since that case is in respect of corporate debtor, wherein the moratorium mentioned under section 14(1) of the IBC discussed and explained. In that judgment, it is made clear that the moratorium is only for the corporate debtor and not to the sureties in a contract of guarantee to a corporate debtor, in the light of section 14(3)(b) of the Code. 8. In a proceedings under section 138/141 of NI Act, already initiated and culminated in conviction, the application under section 94 of the Code, after the judgement of conviction by the petitioners before NLCT will not provide them any moratorium. The application by debtor under section 94 of IBC will not provide them the protection of interim moratorium under section 96 of the IBC for the proceedings initiated against the petitioners as representatives of the accused Company being vicariously liable on behalf of the company. 9. Further, in the application for suspension of sentence, the Court of appeal passed a conditional order against these petitioners being the Directors of the first accused company to de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioners is in respect of corporate debtor, which filed application under section 9 of the IBC. In the said judgment, the Hon'ble Supreme Court has held that the proceedings initiated under section 138 of NI Act falls within the scope of Section 14(1)(a) of the Code. In that judgment, at paragraph 102, the Hon'ble Supreme Court has made it clear that interim moratorium in a corporate debtor's application will not extend to the natural persons, who are prosecuted under section 138/141 of NI Act. Section 14 of IBC will apply only to the corporate debtor, the natural persons mentioned in Section 141 of NI Act continue to be statutorily liable. 14. Later, on considering the judgement rendered in Mohanraj case (cited supra), the Hon'ble Supreme Court in Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation of India Ltd. reported in [2023 (1) MadWN (cri) 145] has reiterated that, if the guarantors does not get the benefit of extinguishment of debt, the Signatory or Director cannot get any benefit. If the argument that the Signatories or Directors are not liable to be proceeded under section 138/141 of NI Act, once the resolution plan is approved, it may lead to a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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