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.

JUDGMENT

Pankaj Jain, J.

By way of this common order I intend to dispose off the bunch of afore-captioned 39 petitions.

2. Petitioners herein are Company as well as Directors of the Company who have been summoned by issuance of process to stand trial in the complaint cases for offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the N.I. Act'). The petitioners invoked jurisdiction of this Court under Section 482 of the Code of Criminal Procedure, 1973 seeking quashing of criminal complaints as well as the summoning orders.

3. Initially the ground pressed into service was on facts claiming that the complaints are abuse of process of law. The cheques on the basis of which complaints have been filed are all security cheques, which were lying with the commission agents and have been misused. Lateron, application was filed under Section 482 of the Code to submit that subsequent to the filing of the instant petition(s) creditors have initiated proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as 2016 Code'). The application was admitted to Corporate Insolvency Resolution Process on 8th of June, 2023 and interim resolution professional was appointed by suspending the management of the Company. The Director of Management stood suspended and the management was taken over by IRP and the Moratorium stands declared in terms of Section 14(1) of the 2016 Code. It has been further claimed that on 8th of July, 2023 the same financial creditor i.e. R.K. Enterprises also initiated and preferred petition for personal insolvency of petitioner No.2 Anil Kumar Vig and Shiv Kumar Vig by invoking personal guarantees for the loan under Section 95 of the 2016 Code. Reliance is being placed upon Section 96 of the Code to submit that interim Moratorium having been imposed, the proceedings even against directors cannot proceed and are deemed to have been stayed.

4. Counsel for the petitioner(s) claims that the proceedings under Section 138 of the N.I. Act cannot continue against the personal guarantors to corporate debtor who were also the Directors of the Corporate Debtor/ petitioner No.1 in view of imposition of moratorium under Section 96 of the 2016 Code as the expression, 'proceedings' under the provision was include proceeding under Section 138 of the N.I. Act 1881 as well. In order to support his submission reliance is being placed upon P Mohanraj v. Shah Brothers Ispat Pvt. Ltd., 2021 AIR (SC) 1308 and Vijay Kumar Ghai v. Pritpal Singh Babbar- CRM-M No.22685 of 2021 decided on 04th of July, 2022.

5. Per contra, counsels for the respondents/complainant on the other hand submit that the present petition under Section 482 of the Code was initially preferred purely on factual issues alleging misuse of security cheques. The same being purely an issue related to factual aspect cannot be adjudicated here under Section 482. Further counsels for the complainants submit that a personal guarantor to the corporate debtor will not be covered under Part II of the 2016 Code to claim shield under Section 96 of the Code. It has been contended that Section 2 of the Code deals with the application of the Code. The provision prescribes various categories to which the Code shall apply. Section 2(e) deals with personal guarantors to corporate debtors. Section 2(g) deals with individuals other than the persons referred to in Clause (e). Meaning thereby that 'individuals' and 'personal guarantors to corporate debtors' have been treated as two distinct categories. It has been further contended that Section 3 of the Code deals with definition clause which is applicable to the whole of the Code. As per the scheme of the Code, it has been divided into five parts. Part I contains Sections 1, 2, 3. Section 4 to Section 77 contained in VII Chapters comprised Part II and the same deals with insolvency and liquidation for corporate persons. Likewise, Section 78 to Section 187 divided