IBC moratorium applies solely to corporate debtor, not shielding directors from Section 138 NI Act criminal proceedings, which continue independently despite company liquidation.

JUDGMENT :

Rakesh Kainthla, J.

The petitioners have filed the present petitions for quashing the orders dated 12.08.2024 passed by learned Chief Judicial Magistrate, Mandi, District Mandi, H.P. (learned Trial Court) vide which the applications filed under Section 14(1) and Section 101 of the Insolvency and Bankruptcy Code, 2016 (IBC) for stay of proceedings were partly allowed. (Parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience.)

2. Briefly stated, the facts giving rise to the present petitions are that the complainant filed a complaint before the learned Trial Court against the accused for the commission of an offence punishable under Section 138 of the NI Act. It was asserted that the complainant is a body corporate engaged in banking activities. The accused No.1 is a company and is functioning through its Directors, including accused Nos. 2 and 3. Accused No.2 represented to the bank that he was managing the affairs of accused No.1 as its CMD and authorised signatory. Accused Nos. 2 and 3, being active Directors-cum-guarantors of the company, were responsible for its business affairs and management. The bank extended E-DFS facility of Rs.3,50,00,000/- on interest to accused No.1 through accused No.2 for the dealership of the Chevrolet car on 31.05.2013. The accused failed to maintain the account regularly and repay the amount as per the terms and conditions. The accused No.1 issued a cheque through the accused No. 2 in favour of the complainant bank for Rs.2,00,00,000/- drawn on IDBI Bank. The complainant presented the cheque to the bank, but it was dishonoured with an endorsement “funds insufficient”. The complainant issued a legal notice asking the accused to repay the amount. The notice was returned with an endorsement, “addressee refused to accept it, hence return to the sender.” The notice is deemed to be served upon the accused, but he failed to repay the money. Hence, the complaint was filed to take action as per the law.

3. The learned Trial Court found sufficient reasons to summon the accused. When the accused appeared, a notice of accusation was put to the accused Gagan Deep Kaur and Gursev Singh for the commission of offences punishable under Section 138 of the NI Act.

4. The accused filed applications under Section 14(1) and Section 101 of the IBC for the stay of the proceedings in terms of the orders dated 14.02.2020 and 22.12.2020 passed by the National Company Law Tribunal (NCLT) Bench at Chandigarh. It was asserted that Ravinder Kumar Goel was appointed as Interim Resolution Professional (IRP) as per Section 16(5) of the IBC. NCLT ordered the liquidation of accused No. 1, Ram Hari Motors. The complainant has raised a claim before the committee of creditors. Therefore, it was prayed that the applications be allowed and the proceedings be stayed.

5. The applications were opposed by the respondent- Bank. A rejoinder was filed to the reply. The learned Trial Court held that the proceedings under Section 138 read with Section 141 of the NI Act were covered by Section 14(1) (a) of the IBC, but the said moratorium only applies to the corporate body and not to a natural person. Consequently, the proceedings were ordered to be stayed against accused No. 1 but ordered to continue against accused Nos. 2 and 3. The matters were listed for recording the statement of the accused under Section 313 Cr.P.C on 14.08.2024.

6. Being aggrieved by the orders passed by the learned Trial Cour