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Checking relevance for Gimpex Private Limited VS Manoj Goel...
2021 7 Supreme 305 : Proceedings under Section 138 of the Negotiable Instruments Act, 1881 (for dishonour of cheque) and civil recovery proceedings for money can run simultaneously, but only under specific conditions. Once a settlement agreement is entered into between the parties, the original complaint under Section 138 is subsumed and cannot be pursued in parallel. However, if cheques are subsequently issued pursuant to the compromise deed and are dishonoured, such dishonour gives rise to a fresh cause of action under Section 138, independent of the original complaint. This new cause of action is valid and can lead to fresh criminal proceedings, even while the original complaint is pending or has been quashed. The deed of compromise remains valid until set aside by a competent court, and breach of its terms through dishonour of subsequent cheques constitutes a distinct offence under Section 138. Thus, while parallel prosecutions for the same underlying transaction are not allowed, a new cause of action arising from a subsequent transaction (i.e., cheques issued under a compromise deed) can sustain a separate criminal complaint under Section 138, which may proceed alongside civil recovery proceedings for the same debt. This is consistent with the compensatory nature of Section 138, which prioritizes recovery of money over punitive measures, and allows for settlement and subsequent enforcement through new instruments.Checking relevance for K. P. O. Moideenkutty Hajee VS Pappu Manjooran...
Checking relevance for P. MOHANRAJ VS SHAH BROTHERS ISPAT PVT. LTD. ...
2021 2 Supreme 528 : Proceedings under Section 138/141 of the Negotiable Instruments Act, 1881 (NIA) and civil recovery proceedings for money can run simultaneously. The NIA proceedings are not merely criminal but have a compensatory and restitutive nature, designed to ensure the complainant receives the cheque amount as compensation. The scheme of Chapter XVII of the NIA allows for a single forum to enforce both criminal liability (for dishonour) and civil liability (for recovery of the cheque amount), thereby obviating the need for separate civil suits. This is evident from provisions such as the power of the Magistrate to levy a fine linked to the cheque amount (Section 138), the ability to award compensation under Section 357(1)(b) CrPC, and the provision for compounding of offences (Section 138). In practice, most cases get compounded by payment of the cheque amount with or without interest, and courts often direct payment of compensation equal to the cheque amount. Thus, the NIA proceeding serves as an effective mechanism for recovery of money, making separate civil recovery proceedings unnecessary in most cases. However, the NIA proceeding is not a civil suit for recovery, but a hybrid ''''quasi-criminal'''' proceeding that combines punitive and compensatory elements. The Civil Procedure Code (CPC) does not preclude such dual proceedings, as the NIA proceeding itself is structured to achieve the same objective as a civil suit for recovery, albeit through a different procedural framework.Checking relevance for Ajay Kumar Radheyshyam Goenka VS Tourism Finance Corporation Of India Ltd...
2023 4 Supreme 711 : Proceedings under the Negotiable Instruments Act, 1881 (Section 138) and recovery proceedings for money can run simultaneously. Section 138 proceedings are penal in character and not recovery proceedings; they are not akin to civil or debt recovery suit proceedings. Criminal liability under Section 138 is independent of financial liability and is based on the principle of dishonour of a negotiable instrument, which affects trade. The Insolvency and Bankruptcy Code, 2016 (IBC) does not extinguish or terminate criminal proceedings under Section 138 of the N.I. Act, even if the company is dissolved or a resolution plan is approved. The personal penal liability of directors and officials under Section 141 of the N.I. Act continues despite the corporate debtor''''s insolvency or dissolution. Therefore, criminal proceedings under Section 138 of the N.I. Act and civil recovery proceedings (such as those under the Civil Procedure Code) can coexist and proceed simultaneously. Compounding of an offence under Section 320 of the Cr.P.C. is a statutory process applicable only to compoundable offences and is distinct from quashing of proceedings under inherent powers (Section 482 Cr.P.C.).Checking relevance for BSI LTD. VS Gift Holdings Private LTD. ...
2000 2 Supreme 41 : Proceedings under the Negotiable Instruments Act, 1881 (specifically Section 138) and civil proceedings for recovery of money can run simultaneously. The word ''''suit'''' in Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, does not include criminal proceedings under Section 138 of the N.I. Act. Section 138 is a penal provision aimed at bringing the offender to penal liability, not for recovery of money. Therefore, criminal prosecution under Section 138 is not barred by Section 22 of SICA, even if the company is declared sick. The offence under Section 138 is complete when the cheque is dishonoured, and prosecution can be initiated independently of civil recovery proceedings. The ban under Section 22(1) of SICA on ''''suit for recovery of money'''' does not extend to criminal proceedings, and the court can impose sentence even on a sick company, as the ban is conditional and can be lifted with the consent of the Board or Appellate Authority.Checking relevance for Fertilizer Corporation Of India Limited VS Coromandal Sacks Private Limited...
Checking relevance for Ram Kishor Arora @ R. K. Arora VS Puneet Dhar...
2023 0 Supreme(P&H) 296 : Proceedings under Section 138 of the Negotiable Instruments Act, 1881 (criminal proceedings) and recovery proceedings (civil in nature) can run simultaneously even during the pendency of Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016. The Hon’ble Supreme Court in Ajay Kumar Radheyshyam Goenka’s case (cited in the document) has held that the nature and purpose of proceedings under Section 138 of the NI Act are criminal in character, not civil or compensatory, and are not barred by Section 14 of the IBC. Section 14 of the IBC only stays civil recovery proceedings, not criminal prosecutions. Therefore, criminal prosecution under Section 138 of the NI Act, which involves penal liability (including imprisonment or fine), is not terminated by operation of IBC provisions. The proceedings under the NI Act are independent, and the complainant may pursue both criminal liability under Section 138 and recovery of the amount through the civil process. The Civil Procedure Code (Cr.P.C.) is relevant in this context as Section 482 of Cr.P.C. was invoked by the petitioner to quash the summons, but the court dismissed the petition, affirming that criminal prosecution under Section 138 of the NI Act is not abated by IBC proceedings. The key citation establishing this principle is the Supreme Court judgment in Ajay Kumar Radheyshyam Goenka’s case, which explicitly states that criminal proceedings under Section 138 are not akin to civil or recovery proceedings and are not subject to the moratorium or stay under IBC.
