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2019 (4) TMI 1862 - HC - Insolvency and BankruptcyDishonor of Cheque - insufficiency of funds - Section 138 r/w 141 and 142 of Negotiable Instruments Act - initiation of CIRP - allegation that one of the Creditors initiated proceedings under Section 9 of the Insolvency and Bankruptcy Code against the respondent - whether there is statutory bar to initiate the proceedings under Section 138 of Negotiable Instruments Act against the petitioner when the petitioner was declared as insolvent? - HELD THAT:- The offence under the Negotiable Instruments Act is a statutory one and the proceedings under the Negotiable Instruments Act is completely different from the Corporate Insolvency Resolution process under the Insolvency and Bankruptcy Code, 2016. The Section 14 of Insolvency and Bankruptcy Code, 2016 prohibits the institution of suits or continuation of pending suits or proceedings against the Corporate Debtor. It means only civil proceedings and not criminal proceedings as against the debtor. This Court has held that there is no prohibition either in the Insolvency Act or in the Negotiable Instruments Act for the complainant to approach the criminal court to take penal action against the accused for the offence already committed under Section 138 of Negotiable Instruments Act either because the insolvency proceedings are pending or even he was declared as an insolvent. Therefore there is no bar to initiate proceedings under the criminal law against the debtor, though he was declared as an insolvent. The bar has been extended only in respect of civil detention and civil arrest. It would not cover the proceedings under Section 138 of Negotiable Instruments Act - The Section 138 of Negotiable Instruments Act is a penal provision which empowers the court of competent jurisdiction to pass the order of imprisonment or fine. It is not the civil proceedings and even fine imposed by the criminal court cannot held to be a money claim or recovery against Corporate Debtor. The criminal proceedings is not covered under the prohibition and as such the petitioner cannot have a shelter under Section 14 of Insolvency and Bankruptcy Code. Therefore, the petition is devoid of merits and it is liable to be dismissed - Petition dismissed.
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