Distinct offences under the IPC and NIA can coexist, and concurrent prosecutions do not violate the double jeopardy principle under Article 20(2) of the Constitution.

Judgment

Mr. Anoop Chitkara, J.:-

1. Seeking quashing of FIR captioned above on the ground that a similar case under the Negotiable Instruments Act was filed by the complainants and dishonor of cheque cannot be construed as a deliberate intention to cheat and a malicious act on the part of the issuer, the accused has come up before this court under Section 482 CrPC.

2. I have heard counsel for the petitioners as well as private respondents and also gone through the pleadings.

3. The petitioners’ case is that an FIR was registered for embezzlement of Rs.1.59 crores, whereas the complainants/respondents No.2 & 3 had also separately instituted criminal complaints under Section 138 of Negotiable Instruments Act (in short ‘NIA’) (Annexures P-2 & P-3) for the same amount, which violates his fundamental right under Article 20(2) of the Constitution of India being double jeopardy.

4. A perusal of Annexure P-2 reveals that the complaint was for the dishonor of a cheque amounting to Rs. 49 lacs, and similarly, Annexure P-3 was filed for the dishonor of a cheque dated 17.02.2015 amounting to Rs.1.10 crores and total cheque amount in both the case is Rs. 1.59 crores. Petitioners claim that on a similar set of allegations, FIR was registered, which amounts not only to double jeopardy but also to misuse of criminal machinery.

5. The state is a formal respondent and did not file its response. However, private respondents Nos. 2 to 4 had filed their reply dated 30.08.2023.

6. The complainant’s stand is the scope and nature of proceedings under NIA and IBC are different and would not intercede with each other. The nature of proceedings to be kept in abeyance under the IBC do not include criminal proceedings but are restricted to only recovery of amount with interest as a debt recovery proceeding would be. It cannot be said that the proceedings under the IBC would extinguish criminal proceedings and under Section 238 of the IBC, the provisions of CrPC shall have effect. No provision of the IBC bars the continuation of the criminal prosecution initiated against individuals as they cannot escape their prosecution and penal liability covered under Sections 138 and 141 of NIA.

7. Although both the parties have also taken up the plea of interim moratorium under section 96 of the Arbitration and Re-conciliation Court, this Court is not going into that question for the reason that it has nothing to do with the FIR at its current stage of the moratorium proceedings. Furthermore, Supreme Court in Ajay Kumar Radheshyam Goenka v. Tourism Finance Corporation of India Ltd, Sep 04, 2023, 2023 SCCOnLineSC266, holds that by operation of the provisions of the IBC, the criminal prosecution initiated against the natural persons under Section 138 read with 141 of the NI Act read with Section 200 of the CrPC would not stand terminated, and both Hon’ble Judges of Supreme Court have authored separate but concurring verdicts, holding as follows:

[16]. We have no hesitation in coming to the conclusion that the scope of nature of proceedings under the two Acts and quite different and would not intercede each other. In fact, a bare reading of Section 14 of the IBC would make it clear that the nature of proceedings which have to be kept in abeyance do not include criminal proceedings, which is the nature of proceedings under Section 138 of the N.I. Act. We are unable to appreciate the plea of the learned counsel for the Appellant that because Section 138 of the N.I. Act proceedings arise from a default in financial debt, the proceedings under Section 138 should be taken as akin to civil proceedings rather than criminal proceedings. We cannot lose sight of the fact that Section 138 of the N.I. Act are not recovery proceedings. They are penal in character. A person may face imprisonment or fine or both under Section 138 of the N.I. Act