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TMI Blog2023 (1) TMI 1453X X X X Extracts X X X X X X X X Extracts X X X X ..... lution Process. Under Section 95 of IBC, a creditor may move an application to initiate the Insolvency Resolution Process. The adjudicating authority is expected to pass an order either allowing or rejecting the application under Section 94 or under Section 95, as the case may be. If the application is admitted under section 100 of IBC, moratorium shall commence in relation to all the debts and shall cease to have effect at the end of the period of 180 days beginning with the date of admission of the application or on the date, the Adjudication Authority passes an order on the repayment plan under Section 114 of IBC, whichever is earlier. Section 41 of the Indian Evidence Act speaks of a final judgment, order or decree of a Competent Court, in the exercise of insolvency jurisdiction, operates as a judgment in rem - On going through the scheme of Insolvency Resolution Process contained in Chapter III of IBC, the contention of learned Advocate for respondent-NSEL that proceeding under Section 95 of IBC and outcome thereof is a party specific (parties to the said proceeding only), can not be accepted. Conclusion - i) The interim moratorium under IBC applies broadly to any debt-related ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dance with Rules and Bye-laws of NSEL. The applicant herein in addition thereto, is a signatory to the postdated cheques issued along with the agreement and PDC declaration. 6. There were defaults of pay-ins on NSEL by its members, including PDAPPL. On working out liability in respect of outstanding trades, it was found that Rs. 687.30 crores were due from PDAPPL. The cheques bearing nos. 734357, 734358 734359, dated 05/05/2014 of Rs. 50 crores each issued for payment of Rs. 150 crores, were therefore presented for encashment. The cheques returned unpaid for the reasons Stop Payment instructions. A statutory Demand Notice/s was therefore issued. Since the notice/s was not complied with, the prosecutions under Section 138 of NI Act came to be initiated. 7. Learned Senior Counsel for the applicant would submit that in view of the commencement of interim moratorium in terms of Section 96 of IBC, the proceedings under Section 138 of NI Act shall be deemed to have been stayed. According to him, learned Magistrate erred in rejecting the applications preferred by the applicant for stay of those proceedings. 8. Learned Senior Counsel for the applicant relied on the following judgments of H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed the revision applications on the ground of the orders, challenged therein, were interlocutory. 13. Considered the submissions advanced. Perused the authorities relied on. 14. Learned Trial Court rejected the prayer with the following observations :- In order to attract Section 96 of the Insolvency and Bankruptcy Code, 2016 to the present case, there must have been insolvency resolution process pending against the present accused no. 1 of which the accused no. 5 is alleged to be partner or the director. Any other insolvency resolution process filed against the accused no. 5 for her alleged liability, which has no concern with the present accused no. 1 or the subject transaction would not, by itself, attract Section 96 to the present proceeding. I do not find substance in the application. Hence, I pass the following order :- ORDER The application is rejected. 15. In the case of P. Mohanraj and Others v/s. Shah Brothers Ispat Private Limited (supra), the Hon ble Apex Court has observed thus - 35 - When the language of Section 14 and Section 85 is contrasted, it becomes clear that though the language of Section 85 is only in respect of debts, the moratorium contained in Section 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder these sections is far greater than that of Section 14 in that pending legal proceedings in respect of the debt and not the debtor are stayed. The difference in language between Sections 14 and 101 is for a reason. 16. As such, the proceedings under Section 138 read with 141 of NI Act get covered by the term any legal action or proceeding pending in respect of any debt appearing in Section 96(1) of IBC. 17. The contention of learned Advocate for the respondent-NSEL that NSEL is not a party to the proceedings, will be of no consequence. Admittedly, the SBI has filed a petition before National Company Law Board against the applicant herein to initiate Insolvency Resolution Process. It is necessary to have a glance at the relevant provisions of IBC. Chapter III of IBC speaks of Insolvency Resolution Process. Section 94 thereof pertains to the application by debtor to initiate the Insolvency Resolution Process. Under Section 95 of IBC, a creditor may move an application to initiate the Insolvency Resolution Process. For ready reference, Section 95(1) of IBC is reproduced, which reads thus :- 95 Application by creditor to initiate insolvency resolution process. - (1) A creditor may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated by respondent-NSEL, is covered by the term any debt appearing under Section 96 of Sub-section (1) of IBC. As per provisions under Section 103 of IBC, all the creditors are expected to register their claims with the resolution professional by sending details of the claims by way of electronic communications or through courier, speed post or registered letter. 22. Section 41 of the Indian Evidence Act speaks of a final judgment, order or decree of a Competent Court, in the exercise of insolvency jurisdiction, operates as a judgment in rem . 23. On going through the scheme of Insolvency Resolution Process contained in Chapter III of IBC, the contention of learned Advocate for respondent-NSEL that proceeding under Section 95 of IBC and outcome thereof is a party specific (parties to the said proceeding only), can not be accepted. 24. Learned Magistrate ought to have allowed the application/s for stay of the proceedings pending before it. Since the same has not been done, interference with the order/s impugned herein is warranted. In the result, the applications succeed. Hence, the following order is passed :- ORDER 1. Criminal Application Nos. 1151 to 1153 of 2022 and 1170 of 2022 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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