The central legal point established in the judgment is the impact of insolvency proceedings and the moratorium provision contained in Section 14 IBC on proceedings under Section 138/141 of the Negotiable Instruments Act, emphasizing the statutory liabilities of corporate debtors and natural persons.

ORDER :

1. Heard the submission of the learned counsel for the petitioner as well as the learned counsel appearing for the 1st respondent. As the issue involved is in respect of taking cognizance of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881, the 2nd respondent i.e. the State is a formal party.

2. Seeking to quash the proceedings that are pending against the petitioner in C.C.No.1045 of 2013 on the file of the Court of X Metropolitan Magistrate, Cyberabad at Malkajgiri, the petitioner has filed this criminal petition invoking Section 482 Cr.P.C.

3. The material brought on record reveals that the 1st respondent (hereinafter be referred to as “the complainant”) filed a complaint against the petitioner herein and one Mr. K.C.M. Kumar alleging that they committed an offence punishable under Section 138 of Negotiable Instruments Act. Seeking to condone the delay of 242 days in filing the said complaint, a separate interlocutory application was filed. The Court by the order dated 19.03.2013, condoned the said delay of 242 days on payment of costs of Rs.2,500/- to the District Legal Services Authority, Ranga Reddy District. Aggrieved by the same, the petitioner (hereinafter be referred to as “accused No.1”) seeks for quashing the entire proceedings in the Calendar Case.

4. In the light of the aforementioned factual scenario, the point that culminates for consideration is ;

Whether there exist any justifiable grounds to invoke the powers granted under Section 482 Cr.P.C. to quash the proceedings that are pending against the petitioner/A-1 in C.C.No.1045 of 2013 on the file of the Court of X Metropolitan Magistrate, Cyberabad at Malkajgiri as prayed for.

5. Vigorously arguing that continuation of proceedings against accused No.1 in the Calendar Case for the offence punishable under Section 138 of Negotiable Instruments Act is unsustainable, the learned counsel for accused No.1 submits that as long as the moratorium proceedings are there protecting accused No.1 i.e. the petitioner herein who is a Corporate Debtor, initiation and continuation of proceedings either in the suit or for the offence punishable under Section 138 of Negotiable Instruments Act, is unsustainable under law. The learned counsel contends that the complainant lodged a complaint that accused No.1 being a Company and it’s Managing Director i.e. accused No.2 issued a cheque and the same was dishonored, and thereby, they committed the offence punishable under Section 138 of the Negotiable Instruments Act and having regard to the initiation of the insolvency proceedings, the said complaint is unsustainable under law, and therefore, the proceedings in the Calendar Case are liable to be quashed. The learned Counsel for petitioner/accused No.1 in support of his submission, relied upon the decision of the Hon’ble Apex Court in the case between P.Mohanraj & others v. Shah Brothers Ispat Private Ltd., (2021) 6 SCC 258, wherein, the Court at paragraph No.102 of the judgment, held as follows:

“Since the corporate debtor would be covered by the moratorium provision contained in Section 14 IBC, by which continuation of Sections 138/141 proceedings against the corporate debtor and initiation of Sections 138/141 proceedings against the said debtor during the corporate insolvency resolution process are interdicted, what is stated in paras 51 and 59 in Aneeta Hada [(2012) 5 SCC 661] would then become applicable. The legal impediment contained in Section 14 IBC would make it impossible for such proceeding to continue or be instituted against the corporate debtor. Thus, for the period of moratorium, since no Sections 138/141 proceeding can continue or be initiated against the corporate debtor because of a statutory bar, such proceedings can be initiated or continued against the persons mentioned in Sections 141(1) and (2) of the negotiable Instruments Act. This being the case, it is clear that the moratorium provision contained in Section 14 IBC would appl