IMPORTANT POINT
IMPORTANT POINT
Criminal proceedings under Section 138 of the Negotiable Instruments Act are independent of insolvency proceedings and cannot be quashed due to a company's liquidation status.

ORDER :

This Criminal Petition is filed under Section 482 of Code of Criminal Procedure, 1973 (for short ‘Cr.P.C.’) to quash the proceedings against the petitioner/accused No.2 in C.C.No.489 of 2018 on the file of the learned XI Additional Chief Metropolitan Magistrate, City Criminal Court, Secunderabad, registered for the offences punishable under Section 142 of the Negotiable Instruments Act, 1881 (for short ‘the Act’).

2. Brief facts of the case are that respondent No.2/de facto complainant lodged a private complaint under Section 200 Cr.P.C. before the XI Additional Chief Metropolitan Magistrate, City Criminal Courts, Secunderabad, stating that it is a Private Limited Company doing business of trading of various chemicals. Due to the acquaintance, the petitioner has approached respondent No.2 for supply of Acetone of 16,000 KGs and accordingly, he purchased the said Acetone and raised tax invoice for Rs.8,33,425/- and the material was also delivered him. As per the purchase order, the petitioner issued two cheques bearing Nos.002074 and 002075 for an amount of Rs.4,33,425/- and Rs.4,00,000/- respectively. Respondent No.2 presented the said cheques in the bank but the same were dishonoured with an endorsement ‘Account blocked’. When the said fact was brought to the notice to the petitioner, he did not respond properly and gave evasive replies. Respondent No.2 vexed with the attitude of the petitioner, issued legal notice to the petitioner to pay the amount due to it within fifteen days from the date of receipt of the said legal notice. The said legal notice was also refused by the petitioner and thereafter, he gave reply with false allegations without making payment. Basing on the said complaint, a case was registered against the petitioner for the offence punishable under Section 138 of NI Act.

3. Heard Sri H. Yogesh Kumar, learned counsel appearing on behalf of the petitioner as well as Sri S. Ganesh, learned Assistant Public Prosecutor appearing on behalf of respondent No.1-State and Sri D. Sudharshan, learned counsel appearing on behalf of respondent No.2.

4. Learned counsel for the petitioner submitted that pending litigation, the company had gone into liquidation vide case No.CP(IB)269/9/HDB/2018 and the process was completed against the company vide orders dated18.12.2019 in I.A.No.439 and 531 of 2019 in CP(IB)269/HDB/2018, as such, no claims could be made against the petitioner and that the State Bank of India had filed insolvency proceedings against the petitioner vide case No.CP(IB)297/95/HDB/2021 and the same is pending before NCLT.

5. Learned counsel further submitted that the above facts were informed to the Court below during the proceedings, but respondent No.2 did not choose to file any application before the NCLT for recovery of amount or claims before the liquidator. He further submitted that it is clear and evident from the orders as well as the provision under Section 31 of the Insolvency and Bankruptcy Code that no claims survive after the resolution plan is approved by the NCLT and all claims are subject to the said plan. Therefore, prayed the Court to quash the proceedings against the petitioner.

6. In support of this submissions, learned counsel for the petitioner relied on the judgment of the High Court of Punjab and Haryana at Chandigarh in Vijay Kumar Ghai vs. Pritpal Singh Babbar, 2022 SCC OnLine P&H 1672, wherein in paragraph No.86, it is held as follows:

“86. In that very context, as regards the dismissal by the Supreme Court of other appeals and writ petitions as were heard with P. Mohanraj’s case (as have been pointed to by Mr. Mehta, learned counsel for the respondent), the dismissal would seem to be on account of the fact that the proceedings under section 138 against the Directors of the companies as were corporate debtors in those cases, were firstly held to be independent of the proceedings under the Code against the corporate debtor itself and further, there is no interim moratorium referred t