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IN THE HIGH COURT OF ORISSA AT CUTTACK
CHITTARANJAN DASH
Syed Najam Ahmed – Appellant
Versus
State of Odisha – Respondent
| Table of Content |
|---|
| 1. nature and context of the loan and dishonoured cheque (Para 2 , 3 , 4 , 5) |
| 2. grounds for seeking discharge based on insolvency (Para 6) |
| 3. court's reasoning against discharge due to insolvency (Para 7 , 11) |
| 4. clarification of liability under section 138 of ni act (Para 8 , 9 , 10) |
| 5. confirmation of lower court's order (Para 12) |
JUDGMENT :
Chittaranjan Dash, J.
1. By means of this application, the Petitioner seeks the indulgence of this Court directing the learned JMFC (LR), Bhubaneswar to issue summon to the Resolution Professional (RP) to represent accused No.1 and to discharge the accused No.2 against whom cognizance has been taken in 1.C.C. Case No.3236 of 2021 vide order dated 18.03.2025 rejecting his prayer in the petition dated 23.12.2024 praying for discharge of the accused Nos.1, 2 & 3.
2. The background facts of the case are that M/s. Dewy Developers Pvt. Ltd. (hereinafter referred to as the complainant) filed a complaint before the learned JMFC (LR), Bhubaneswar under Section 138 of the Negotiable Instruments Act, 1881 (in short, “the N.I. Act”). In the said complaint, a prayer was made to summon the present Petitioner, namely Zenith Mining Private Ltd., i
Personal penal liability of corporate directors persists notwithstanding the entity's insolvency, allowing continuance of N.I. Act proceedings.
(1) Dishonour of cheque – Offence by company – By operation of provisions of IBC, criminal prosecution initiated against the natural persons under Section 138 read with 141 of NI Act read with Sectio....
Section 32A of the IBC extinguishes criminal liability for the corporate debtor post-resolution but not for directors under Section 138 of the NI Act.
The proceedings under the IBC and the proceedings under Section 138 of the NI Act are of different nature and purpose, and the criminal prosecution under Section 138 of the NI Act would not stand ter....
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.
The moratorium under the IBC does not protect directors from criminal liability under Section 138 of the N.I. Act, as these proceedings are distinct from civil recovery actions.
Individual directors remain liable for dishonoured cheques even after a corporate debtor enters insolvency, as personal criminal liability under the NI Act persists irrespective of corporate status.
The nature of proceedings under the IBC and the NI Act is different, and the criminal prosecution under Section 138 of the NI Act would not stand terminated by the operation of the provisions of the ....
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