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2021 (12) TMI 1106 - HC - Indian LawsDishonor of Cheque - Effect of moratorium on proceedings u/s 138 of NI Act - Petitioner is a natural person - suspended director - HELD THAT:- The mandate occurring in Section 14 of the IBC, becoming animated, and, it also enabling the drawing of a further legal sequel, that when Clause- A of Sub Section 14(1) of the IBC, hence prohibits the institution of suits, or continuation of pending suits or continuation of pending proceedings against the corporate debtor. Therefore, statutory coinage carried therein, also covering proceedings drawn under Section 138 of the Negotiable Instruments Act. Hon'ble Apex Court pronounced in case titled as P. MOHANRAJ & ORS. VERSUS M/S. SHAH BROTHERS ISPAT PVT. LTD. [2021 (3) TMI 94 - SUPREME COURT] taken a view that the moratorium provisions contained in Section 14 of the IBC Code, prohibit the continuation of proceedings drawn even under Section 138/141 of the Negotiable Instruments Act, against the corporate debtor, rather during the subjudice corporate insolvency resolution process. The petition at hand, has been filed by one Vishnoo Mittal, who claims himself to be the suspended Director of the corporate entity, named as M/s Xalta Food and Beverates Pvt. Ltd. The learned counsel for the petitioner submits, that the clout of the moratorium, is omnibus, and, it also indemnifies, and, saves the liability, if any, of the petitioner herein. However, the afore made argument, cannot be accepted by this Court, as the Hon'ble Apex Court in judgment made a candid expostulation of law, that proceedings drawn under Section 138 of the Negotiable Instruments Act, though are covered by Section 14 of the IBC Code, but the afore drawn proceedings cannot rather continue only against the corporate debtor accused, but can continue against the erstwhile director/person incharge, and, responsible for the conduct of the business of the corporate debtor. Since the petitioner is a natural person, and, a suspended Director, and, hence falls within the domain of erstwhile director. Thereupon the immunity, as granted to a corporate debtor, cannot be extended to him. Since the petitioner is not a juristic person, but is a natural person, and, though he is a suspended director, yet when he is an erstwhile director of the corporate entity concerned, rather prima facie, at the relevant stage of issuance, was incharge of, and, responsible for the company, and, of the business of the corporate debtor. Therefore, the issuances of summons against him, through the making of the impugned order, does not suffer from any illegality. Petition dismissed.
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