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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
J.C.DOSHI
Raj Paul Oswal S/o Lachmandas Oswal – Appellant
Versus
State of Gujarat – Respondent
| Table of Content |
|---|
| 1. factual background of the case (Para 2 , 3) |
| 2. court's observations on trial proceedings and statutory notice (Para 4 , 8 , 9) |
| 3. arguments regarding director's authority and bankruptcy code (Para 5 , 6 , 10) |
| 4. application of ibc in relation to cheque issuance (Para 11 , 12) |
| 5. conclusion and order to quash proceedings (Para 13 , 14) |
JUDGMENT :
J.C. DOSHI, J.
1. Rule. Learned APP waives service of rule for the respondent State.
2. By way of this application under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as ”the Code”), the petitioners have prayed for quashing and setting aside proceedings of Criminal Case No.5849 of 2019 pending before the learned CJM, Ahmedabad Rural at Mirzapur qua the petitioners herein.
3. Brief facts taken out from the pleadings are as under:-
3.1 The Complainant is A Partnership Firm, engaged in the business/trading/Supplies of Raw Cotton Bales and is managing the said business from the address mentioned in the present cause title and the same comes within jurisdiction of this Hon'ble Court.
3.2 The Opponent/Accused No. 1 is a company incorporated under Companies Act, 1996 and is engaged in the business of Spinni
Directors of a corporate debtor cannot be prosecuted for cheque dishonor under the NI Act for cheques issued during moratorium as per the IBC, voiding their authority to transact.
After declaration of moratorium, directors lose liability for cheques issued on behalf of the company, as all powers transfer to the resolution professional.
A partner of a firm can file a complaint under Section 138 of the Negotiable Instruments Act if authorized, as they act as agents of the firm, and the moratorium under IBC does not protect directors ....
The moratorium under the Insolvency and Bankruptcy Code does not protect individuals who are directors or guarantors of a corporate debtor from criminal proceedings under the Negotiable Instruments A....
The moratorium provisions under Section 14 IBC apply only to the corporate debtor, and natural persons continue to be liable under the NI Act, and personal insolvency proceedings do not absolve natur....
Dishonour of cheque – Return of cheques dishonoured simpliciter does not create offence under Section 138 NI Act – Cause of action arises only when demand notice is served and payment is not made pur....
The imposition of moratorium under Sec. 14 of the I.B. Code applies to the corporate debtor, while the natural persons mentioned in Sec. 141 of the N.I. Act continue to be statutorily liable.
IBC moratorium applies solely to corporate debtor, not shielding directors from Section 138 NI Act criminal proceedings, which continue independently despite company liquidation.
The moratorium provision under Section 14 of the Insolvency and Bankruptcy Code, 2016 does not apply to the natural persons mentioned in Section 141(1) and (2) of the Negotiable Instruments Act.
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