The court ruled that under Section 32-A of the Insolvency Code, 2016, a corporate debtor cannot be prosecuted for offences committed prior to the commencement of Corporate Insolvency Resolution Process, emphasizing the civil nature of the dispute.

ORDER :

Heard Mr. Praful Chandra Jha, learned counsel appearing for the Petitioners, Mr. Krishna Prasad Singh, learned senior counsel for the informant and Mr. Jharkhandi Upadhyay, learned APP for the State.

2. The instant petition has been filed under section 482 of the Code of Criminal Procedure (in short ‘Cr.P.C.’) with a prayer to quash the order dated 28.01.2016 passed by the court of learned Judicial Magistrate 1st Class, Patna in Complaint Case No. 3372 (C) of 2015 by which the cognizance of the offence under section 406 read with section 34 of the Indian Penal Code ( in short ‘IPC’) has been taken against the petitioners.

3. Mr. Praful Chandra Jha, learned counsel appearing for the petitioners has mainly taken the grounds to quash the order impugned that from the facts and allegations made in the complaint filed by the O.P. No.2, no criminal offence even from the face of the allegation is made out against the petitioners as admittedly, there was business relation between the petitioners’ company namely, M/s Tantia Constructions Limited and the company namely, M/s Singh Nirman Pvt. Ltd. (O.P. No.2), represented by its Managing Director, B.K. Singh @ Babloo Kumar Singh and as per allegation, a sum of Rs. 2,80,00,000/-was dues on the part of the petitioners’ company with regard to raw materials such as stone chips, stone dust etc. which had been supplied by the company of O.P. No.2 in respect of the road construction work and further, on the application filed by the State Bank of India, one of the creditors to the petitioners’ company, the Corporate Insolvency Resolution Process ( in short ‘CIRP’) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred as ‘Insolvency Code’) has been initiated against the petitioners’ company in which the company of O.P. No.2, M/s Singh Nirman Pvt. Ltd. has been made as one of the corporate debtors and the said resolution process is still subjudice before the National Company Law Tribunal, Kolkata Bench, Kolkata (in short ‘NCLT Kolkata’). As per learned counsel appearing for the petitioners, vide order dated 13.03.2019 NCLT Kolkata has admitted the claim of the financial creditors including the petitioners and thereafter, on 18.03.2019, a Public Announcement under Regulation 6 of the Insolvency and Bankruptcy Board of India Regulation, 2016 was published and the claims of the creditors of Tantia Constructions Ltd. were invited and the O.P. No.2 raised its claim of Rs. 2,98,02,473/- on 25.04.2019 through Form-B (Annexure-P/12) against which the NCLT Kolkata approved the claim of the O.P. No.2 to the extent of Rs. 2,10,93,780/-(Annexure-P/13) and on 24.02.2020, NCLT Kolkata approved the resolution plan, Annexure-P/14 and thereafter, part payment of Rs. 6,49,346/- has been made vide Cheque No. 231739 dated 16.06.2023 in the bank account of O.P. No.2 and in this regard, Annexure-P/16 is relevant and it is important to mention that during CIRP period, O.P. No.2 filed its claim and the same was accepted to the tune of Rs. 2,10,93,780/- by the resolution professional and thereafter, the O.P. No.2 has been classified as an operational creditor and the management of petitioners’ company has been handed over to the new management on 17.06.2023 and as such in view of the provision of section 32-A of the Insolvency Code, 2016, the liability of the petitioners or its company M/s Tantia Constructions Limited for an offence allegedly committed prior to the commencement of the Corporate Insolvency Resolution Process (CIRP) shall cease and the corporate debtors (petitioners) shall not be prosecuted for such offence from the date when the resolution plan has been approved by the adjudicating authority under section 31 of the Insolvency Code, 2016.

4. Though Mr. Krishna Prasad Singh, learned Senior Counsel appearing for the O.P. No.2 has opposed this petition but remained unable to rebut the ground of the petitioners taken by them in view of the provisions of section 32-A of the Insolve