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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
HARPREET SINGH BRAR
Gagandeep Singh Swani – Appellant
Versus
Daljit Singh Grewal – Respondent
| Table of Content |
|---|
| 1. quashing of complaint against corporate insolvency (Para 1 , 2) |
| 2. cir process impacts liability under ni act (Para 3) |
| 3. overview of ibc definitions and implications (Para 4 , 5 , 6) |
| 4. vicarious liability for directors under ni act (Para 7 , 8) |
| 5. criminal proceedings continue despite corporate insolvency (Para 9 , 10) |
| 6. petition dismissed (Para 11 , 12) |
JUDGMENT :
HARPREET SINGH BRAR, J.
1. The present petition has been filed under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (for short ‘BNSS’) seeking quashing of complaint bearing No. COMA/4885/2023 dated 15.03.2023 filed under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter ‘NI Act’ read with Section 420 of the Indian Penal Code, 1860 titled ‘Daljit Singh Grewal vs. Swani Motors Services Pvt. Ltd.’ as well as summoning order dated 16.03.2023 (Annexure P-1) passed by the learned Judicial Magistrate Ist Class, Ludhiana.
2. Briefly, the facts, as alleged, are that on 01.11.2015, the respondent-complainant and his brother leased a property in Ludhiana to the company of the petitioner. However, the company of the petitioner failed to pay the agreed rent, causing the parties to enter into a
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 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.
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.
(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....
The court ruled that proceedings under Section 138 of the NI Act are penal and cannot be stayed by the interim moratorium under Section 96 of the IBC, affirming the distinction between criminal and c....
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.
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