Andhra Pradesh High Court
Judges : K.S.SHRIVASTAVA
P.Sridhar - Appellant
Versus
T.Shankar - Respondent
Decided On : 04-30-97
Negotiable instruments Act - Section 138 - Provincial Insolvency Act, 1920 - Sections 29 and 28 - Criminal Case - Feeling aggrieved by impugned order of rejection of petition 1st respondent preferred a revisional Court stayed further proceedings on ground that petitioner has been added as one of respondents in solvency proceedings and therefore criminal case filed by petitioner against 1st respondent cannot be proceeded with till disposal of insolvency proceedings - This is 1st revision preferred by petitioner and therefore it is maintainable provides that any Court in which a suit or other proceeding is pending against debtor shall on proof that an order of adjudication has been made against him under this Act either stay proceedings or allow it to continue on such terms as Court may impose - Held, These sub-sections do not speak anything about criminal action that is to be taken against a person who is adjudicated as an insolvent - These sub-sections only provide that whole of property of insolvent shall vest in Receiver who shall be vested with properties in question and insolvent shall be divested of properties held by him - Properties which insolvent may acquire subsequent to order of adjudication or properties which devolve on him subsequent thereto shall also vest in Receiver - It does not say that insolvent cannot be prosecuted for committing any offence - Under these circumstances other proceedings as mentioned of Provincial Insolvency Act mean only civil proceedings and not criminal proceedings - Petition is allowed.
( 1 ) THIS revision is directed against the order passed by the IV Additional metropolitan Sessions Judge, Hyderabad, whereby the order passed by the trying Magistrate has been set aside and the proceedings have been ordered to be stayed.
( 2 ) THE facts of the case lie in a very narrow compass. The petitioner laid a complaint against the 1st respondent-accused under Sec. 138 of the Negotiable instruments Act. Pending trial, the 1st respondent filed an application for staying the proceedings on the ground that 4 days prior to the issuance of the alleged cheque, he had filed an application which was registered as I. P. No. 17/93 in the Court of the Additional Judge, City Small Causes, Court, hyderabad, for adjudicating him as insolvent and has also shown the petitioner as one of the creditors in the insolvency proceedings. The trying Magistrate rejected the application.
( 3 ) FEELING aggrieved by the impugned order of rejection of the petition, the 1st respondent preferred a revision. The revisional Court stayed further proceedings on the ground that the petitioner has been added as one of the respondents in the solvency proceedings and, therefore, the criminal case filed by the petitioner against the 1st respondent under Section 138 of the Negotiable instruments Act cannot be proceeded with till the disposal of the insolvency proceedings.
( 4 ) THIS is the 1st revision preferred by the petitioner and, therefore, it is maintainable. Section 29 of the Provincial Insolvency Act, 1920 provides that any Court in which a suit or other proceeding is pending against debtor shall, on proof that an order of adjudication has been made against him under this Act either stay the proceedings or allow it to continue on such terms as the Court may impose. Under sub-Section 7 of Section 28 of the said Act, an order of adjudication shall relate back to and take effect from the date of presentation of the petition on which it is made. Sub-Section 1 of Section 28 ibid provides that on making an order of adjudication, the insolvent shall to the utmost of his power Co-operate in realisation of the property and the distribution of the proceedings among his creditors while sub-sections 2,3 and 4 provide the effect of an order of adjudication. These sub-sections do not speak anything about the criminal action that is to be taken against a person who is adjudicated as an insolvent. These sub-sections only provide that the whole of the property of the insolvent shall vest in the Receiver who shall be vested with the properties in question and the insolvent shall be divested of the properties held by him. The properties which the insolvent may acquire subsequent to the order of adjudication or the properties which devolve on him subsequent thereto shall also vest in the Receiver. It does not say that the insolvent cannot be prosecuted for committing any offence. Under these circumstances, other proceedings as mentioned in Section 29 of the Provincial Insolvency Act mean only civil proceedings and not criminal proceedings.
( 5 ) FOR the foregoing reasons, the impugned order passed by the revisional court appears to be contrary to law and, therefore, it is liable to be set aside.
( 6 ) IN result, the revision petition is allowed and the impugned order is set aside. The trying Magistrate shall proceed according to law.
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