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2020 (11) TMI 835 - HC - Indian LawsDishonor of Cheque - Vicarious liability of Director - dishonor of collateral security cheques which were issued in discharge of alleged outstanding of a term loan sanctioned by the bank - fundamental argument of learned counsel for the petitioner is that the petitioner cannot be prosecuted for dishonor of cheques, as the liability was that of Company and not of the petitioner as an individual - HELD THAT:- There is merit in the contention of learned counsel for the petitioner. Given the facts of case read with allegations in the impugned Bombay High Court complaint, as an individual Director, petitioner seems to have been wrongly fastened with criminal liability of accused company M/s Supreme Tex Mart Ltd., particularly, after appointment of the Interim Resolution Professional and suspension of the directors under the IBC. It is though not stated in the impugned complaint but on a query of this court, it transpires that petitioner had signed the cheques in question on behalf of the accused company. However, following the appointment of IRP, the petitioner was forthwith suspended to act as Director of the accused company and he was/is thus not in a position to pay or settle on behalf of the company. The primary liability of cheque bouncing in this case is of the accused drawer Company. All accounts are currently since under the control of a Interim Resolution Professional, it would not be fair to impose liability on a suspended Director of the Company. Under the Insolvency and Bankruptcy Code-2016,once an insolvency petition is “admitted”, the resolution process gets initiated. The existing management automatically gets suspended. The Interim Resolution Professional takes over the operations of the company. Under Section 25 of IBC the Resolution Professional is under mandate to protect and preserve the assets of the ‘corporate debtor company’. Subsequent thereto, the committee of creditor is required to submit a resolution plan for approval of the ‘committee of creditors’. After such approval, the resolution plan is presented to the Adjudicating Authority - In the premise, due to insolvency proceedings against the accused company and imposition of moratorium, two consequences arise, namely, (a) option to compound a cheque bounce is not available to its directors (erstwhile) and; (b) claims of the creditors have to be submitted before a committee of creditors. The primary liability in a cheque bounce case where cheque has been issued on behalf of the company is upon the drawer-Company. Though the accounts of the drawer company herein are under the control of a Resolution Professional but sword of liability qua cheque issued on behalf of company has been vicariously imposed on the suspended director/petitioner. The impugned complaint and summoning order are set aside only qua the petitioner/director - the complaint proceedings shall continue further against the Company/accused No.1, in accordance with law - Application disposed off.
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