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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Vikas Bahl, J.
Best Zone Builder & Developers Private Limited & Ors. – Appellants
Versus
Veena Rani & Anr. – Respondents
CRM-M-16275 of 2021, CRM-M-16332 of 2021,CRM-M- 16335 of 2021 and CRM-M- 16365 of 2021
Decided On : 08-02-2022
The Court held that the moratorium provision contained in Section 14 of the IBC would apply only to the corporate debtor, the natural persons mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of the Negotiable Instruments Act.
Fact of the Case:
The petitioners, accused persons in complaint under Section 138 of the Negotiable Instruments Act, 1881 (N.I. Act), filed petitions challenging the order dated 13.01.2021 (wrongly mentioned as 2020 in the order), passed by the Additional Sessions Judge, Chandigarh, in Criminal Appeal no.75 dated 19.02.2020 whereby the application for directing the petitioners to deposit 20% of the compensation / fine amount awarded by the trial Court, has been allowed and the petitioners have been directed to pay 20% of the compensation / fine amount in compliance of the said order within 60 days from the date of passing of the order.
Finding of the Court:
The Court held that the moratorium provision contained in Section 14 of the IBC would apply only to the corporate debtor, the natural persons mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of the Negotiable Instruments Act.
Issues: Whether the moratorium provision contained in Section 14 of the IBC would apply to the proceedings under Section 138/141 of the N.I. Act against a corporate debtor.
Ratio Decidendi: The Court observed that the quasi-criminal proceedings contained in Chapter XVII of the Negotiable Instruments Act would amount to a proceeding within the meaning of Section 14(1) (a) of IBC. The Court further observed that the moratorium provision contained in Section 14 of the IBC would apply only to the corporate debtor, the natural persons mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of the Negotiable Instruments Act.
Final Decision: The Court allowed the petition qua petitioner no.1 and dismissed the petition qua petitioners no.2 and 3. The impugned order dated 13.01.2021 (wrongly mentioned as 13.01.2020 in the order) was set aside to the extent that the Petitioner no.1-company has been directed to pay 20% of the compensation/fine. The direction in the impugned order to the Petitioner nos. 2 and 3 to pay 20% of the compensation/fine amount was upheld.
JUDGMENT
Vikas Bahl, J. (Oral). - This order will dispose of four criminal miscellaneous petitions filed by the same set of petitioners.
2. The first petition, i.e. CRM-M-16275-2021 has been filed by three petitioners, i.e. Best Zone Builder & Developers Pvt. Ltd. through Interim Resolution Professional Parvinder Singh, Manmohan Singh and Paramjit Kaur, wherein challenge is to the order dated 13.01.2021 (wrongly mentioned as 2020 in the order), passed by the Additional Sessions Judge, Chandigarh in Criminal Appeal no.75 dated 19.02.2020 whereby the application for directing the petitioners to deposit 20% of the compensation / fine amount awarded by the trial Court, has been allowed and the petitioners have been directed to pay 20% of the compensation / fine amount in compliance of the said order within 60 days from the date of passing of the order. The said order has been passed in the proceedings initiated by Veena Rani-respondent no.l, under Section 138/141/142 of the Negotiable Instruments Act, 1881 (in short N.I. Act).
3. The second petition, i.e. CRM-M-16332-2021 has been filed by the same three petitioners challenging a similar order dated 13.01.2021 (wrongly mentioned as 2020 in the order) passed by the Additional Sessions Judge, Chandigarh, in Criminal Appeal no.74 dated 19.02.2020 whereby the application for directing the petitioners to deposit 20% of the compensation / fine amount awarded by the trial Court, has been allowed and the petitioners have been directed to pay 20% of the compensation / fine amount in compliance of the said order within 60 days from the passing of the order. The said order has been passed in the proceedings initiated by Rita Sondhi-respondent no.l under Section 138/141/142 of the N.I. Act.
4. The third petition, i.e. CRM-M-16365-2021 has been filed by the same three petitioners challenging a similar order dated 13.01.2021 (wrongly mentioned as 2020 in the order) passed by the Additional Sessions Judge, Chandigarh, in Criminal Appeal no.72 dated 19.02.2020 whereby the application for directing the petitioners to deposit 20% of the compensation / fine amount awarded by the trial Court, has been allowed and the petitioners have been directed to pay 20% of the compensation / fine amount in compliance of the said order within 60 days from the passing of the order. The said order has been passed in the proceedings initiated by Rohit Sondhi-respondent no.l under Section 138/141/142 of the N.I. Act.
5. The fourth petition, i.e. CRM-M-16335-2021 has been filed by the same three petitioners challenging a similar Order dated 13.01.2021 (wrongly mentioned as 2020 in the Order) passed by the Additional Sessions Judge, Chandigarh, in Criminal Appeal no.73 dated 19.02.2020 whereby the application for directing the petitioners to deposit 20% of the compensation / fine amount awarded by the trial Court, has been allowed and the petitioners have been directed to pay 20% of the compensation / fine amount in compliance of the said order within 60 days from the passing of the order. The said order has been passed in the proceedings initiated by Rohit Sondhi-respondent no.l under Section 138/141/142 of the N.I. Act.
6. Since the issue involved and the questions of law which arise in the above four cases are common, thus, with the consent of all the learned counsel, CRM-M-16275-2021 is taken up as the lead case and the facts have been taken from the said petition.
7. Respondent no.l-Veena Rani had filed a complaint under Section 138 read with Sections 141, 142 of the N.I. Act against the petitioners on 15.12.2018. Petitioner no.l is the company which was impleaded as a party through petitioner no.2, who was stated to be the Managing Director of the company.Petitioner no.3 was stated to be a Director of the company. The said complaint was filed on the allegations that the complainant along with her family members including Mohit Sondhi, Rita Sondhi, Rohit Sondhi and M/s Devika Infrastruture Pvt. Ltd. were owners of prope
(1) Negotiable Instruments Act, 1881 – Section 138/141 – Insolvency and Bankruptcy Code, 2016 – Section 14 – Dishonour of cheque – Moratorium – Section 138/141 proceeding against a corporate debtor i....
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.
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....
IBC moratorium applies solely to corporate debtor, not shielding directors from Section 138 NI Act criminal proceedings, which continue independently despite company liquidation.
The interim moratorium under the Insolvency and Bankruptcy Code does not protect individuals from criminal liability for dishonouring cheques under the Negotiable Instruments Act.
The IBC's moratorium does not prevent criminal prosecution under Section 138 of the NI Act; personal liability remains intact despite insolvency proceedings.
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 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....
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