IMPORTANT POINT
Offences punishable under Insolvency and Bankruptcy Code, 2016 having imprisonment of two years or more will have to be tried by a Special Court presided by a Sessions Judge or an Additional Sessions Judge.

JUDGMENT :

B.R. GAVAI, J.

I. FACTUAL BACKGROUND

1. This appeal challenges the judgment and order dated 14th February 2022, passed by the learned Single Judge of the High Court of Judicature at Bombay in Writ Petition No. 2592 of 2021, thereby allowing the petition filed by Satyanarayan Bankatlal Malu and Ramesh Satyanarayan Malu, the Ex-Directors of M/s. SBM Paper Mills Pvt. Ltd. (hereinafter referred to as ‘the Respondents’) challenging the order dated 17th March 2021 passed by the learned Additional Sessions Judge, 58th Court in Special Case No. 853 of 2020 (‘learned Sessions Judge’ for short). The learned Sessions Judge had directed issuance of process against the Respondents on account of a Complaint filed by the Insolvency and Bankruptcy Board of India (hereinafter referred to as ‘the Appellant-Board’) under Section 236 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “the Code”) read with Sections 190, 193 and 200 of the Code of Criminal Procedure, 1973 (“Cr.P.C.) for the offences punishable under Section 73(a) and Section 235A of the Code.

2. The facts in brief, giving rise to the present appeal are as under:

2.1 M/s. SBM Paper Mills Private Limited (hereinafter referred to as “the Corporate Debtor”) filed a petition on 4th September 2017 under Section 10 of the Code for initiation of the Corporate Insolvency Resolution Process (hereinafter referred to as “CIRP”) of itself vide CP/1362/I&BC/NCLT/MB/MAH/2017. The National Company Law Tribunal, Mumbai Bench (hereinafter referred to as “the NCLT”) vide order dated 17th October 2017, admitted the Petition and directed the moratorium to commence as prescribed under Section 14 of the Code and directed certain statutory steps to be taken as a consequence thereof. Vide the said order, the NCLT also appointed Mr. Amit Poddar as the Interim Resolution Professional (hereinafter referred to as “RP”) to carry out the functions as prescribed under the provisions of the Code.

2.2 In the meanwhile, Mr. Satyanarayan Malu, i.e. the Respondent/Ex-Director of the Corporate Debtor filed an application being M.A. No. 1396/2018 before the NCLT under Section 12A of the Code for the withdrawal of the aforesaid petition under Section 10 in light of a One Time Settlement (“OTS” for short) entered into with the sole Financial Creditor, i.e. Allahabad Bank. On the other hand, the RP had also filed an application being M.A. No. 827/2018 for the approval of the Resolution Plan. The NCLT vide order dated 20th December 2018 allowed the M.A. No. 1396/2018 filed by the Respondent while observing the consent for withdrawal of the petition by the sole Financial Creditor vide letter dated 27th November 2018.

2.3 However, on account of non-compliance of the terms of the OTS by the Respondents, the NCLT issued a Show-Cause Notice against them vide order dated 11th March 2019. The NCLT further found it to be a fit case to propose the prosecution of the Respondents vide order dated 20th August 2019 while hearing an application filed by the sole Financial Creditor being M.A. 494 and 495 of 2019 thereby seeking prosecution of the Respondents.

2.4 Thereafter, on 22nd September 2020, the Appellant-Board filed a Complaint against the Respondents before the Sessions Judge in Special Case No. 853/2020 under the aforementioned provisions and for offences punishable under Section 73(a) and 235A of the Code for the non-compliance of the terms of the OTS and for not having filed the M.A. 1396/2018 under Section 12A of the Code through the RP. The Sessions Judge vide Order dated 17th March 2021 directed issuance of process against the Respondents and further directed them to be summoned on the next date of hearing.

2.5 Being aggrieved thereby, the Respondents filed a Writ Petition No. 2592 of 2021 before the High Court of Judicature at Bombay, p