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2023 (2) TMI 1149 - HC - Indian LawsDishonour of Cheque - moratorium clamped under Section 14 of the Insolvency and Bankruptcy Code, 2016 - continuation/initiation of prosecution against Directors and those others responsible to the day to day affairs of the company/firm under Section 138 read with Section 141 of NI Act - whether the prosecution under Section 138 read with 141 of NI Act against the respondents shall continue in the peculiar facts and circumstances of the case? - HELD THAT:- The moratorium in terms of Section 14 of IBC was ordered on 06/06/2017 i.e. after presentation of the cheques for encashment, dishonour thereof for the reason “Funds Insufficient”, issuance of Statutory Demand Notice and even non-compliance of the Demand Notice within 15 days of the receipt thereof. As such, the ingredients for constituting the offence punishable under Section 138 of NI Act had already occurred. Admittedly, NCLT, Bench at Mumbai vide its order dated 08/01/2019, passed the prohibitory order (referred hereinabove). As a consequence thereof, the company was prohibited from transferring or alienating or disposing of any of its assets. Meaning thereby, the amount in the bank account of the Corporate Debtor/company came to be freezed. Insolvency Resolution Professional was appointed. He took over the charge of management of the Corporate Debtor/company. There is communication on record indicating the Corporate Debtor to have expressed its inability to pay the amount of dishonoured cheques on account of moratorium imposed vide order dated 08/01/2019. The concern bank of Corporate Debtor/company was also informed the operation of bank account was taken over by Insolvency Resolution Professional - As a consequence, the Insolvency Resolution Professional became the authority to operate the bank account. As a further consequence, signature of earlier person, who was authorized to operate the bank account, came to be replaced with that of the Insolvency Resolution Professional. The cheques came to be presented on 11/04/2019 and 02/05/2019 i.e. long after moratorium was imposed. When the cheques were presented for encashment, the respondents were no longer in control and management of day to day affairs of the Corporate Debtor. It is not known as to whether there were sufficient funds in the bank account of Corporate Debtor to honour the cheques. It is reiterated that the cheques were bounced for the reason “Drawer’s Signature Differ”. In view of this Court, the ingredients for constituting the offence punishable under Section 138 of NI Act occurred post imposition of moratorium. The respondents herein therefore could not be blamed. True, mens-rea is not an essential ingredient of the offence punishable under Section 138 of NI Act. As such, ingredients of the offence punishable under Section 138 read with Section 141 of NI Act do not get attracted against any of the respondents herein. The Revisional Court was therefore justified in setting aside the order of issuance of process. This Court is of the view that the Revisional Court did not commit any mistake in passing the orders impugned herein and therefore no interference is warranted therewith. The revision applications therefore fail - Revision dismissed.
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