TMI Blog2021 (11) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... tter be placed before the Hon ble the Chief Justice to refer the matter to a larger bench in relation to the aspect of adjudication whether the verdict in M.L Gupta and Anr. [ 2006 (11) TMI 346 - HIGH COURT OF DELHI] to the extent that it set asides the summoning order in toto inclusive of the summoning of the Directors of the corporate debtor qua liability under Section 138 of the NI Act, 1881 in view of the verdict of the Hon ble Supreme Court in P.Mohanraj and others [ 2021 (3) TMI 94 - SUPREME COURT] to the extent that it lays down clearly that the moratorium provision contained in Section 14 of the IBC would apply only to the corporate debtor and thus, in pari materia in view of the winding up the proceedings of the corporate debtor in the instant case, the culpability of the natural persons mentioned in Section 141 of the N.I.Act, 1881 would be a continuing liability continuing to be statutorily liable under Chapter 17 of the NI Act, 1881. The matter be thus placed before the Hon ble the Chief Justice for the date 29.11.2021. - CRL.L.P. 137/2021 & CRL.M.A. 17491/2021 CRL.L.P. 138/2021 & CRL.M.A. 17492/2021 CRL.L.P. 139/2021 & CRL.M.A. 17493/2021 CRL.L.P. 140/2021 & CRL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payment. Once dishonour of the cheque by the Bank and failure to make payment of amount by the company is beyond its control, the Directors (who are in fact ex-Directors) can also not be held liable. Sustenance for this proposition can be drawn from another judgment of the Supreme Court in the case of Kusum Ingots Alloys Ltd., etc. v. Pennar Peterson Securities Ltd., [2000] 100 Company Cases 755 (SC). That was a case where reference in respect of the company was pending before the Board of Industrial and Financial Reconstruction (for short BIFR ) under the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The Court held that mere registering the reference would not be sufficient to bar the proceedings under Section 138 of the N.I. Act even by virtue of Section 22 of SICA as Section 22 which provided that no proceedings would be instituted against the company related to only to civil proceedings and does not include criminal proceedings. However, the Court further held that position would be different if order is passed by the BIFR under Section 22A of SICA restraining the company or its Directors from disposing of the assets of the company. Following observation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e trial in a criminal case . 17. Therefore, such a complaint would not be maintainable when the cheque is presented after the company has already been ordered to be wound up. , thus, holding that the said complaints were not maintainable. On behalf of the petitioners, reliance is also sought to be placed on the verdict of the Hon ble Supreme Court in Re: Expeditious Trial of Cases Under Section 138 of N.I. Act, 1881, 2021 SCC OnLine SC 325 with it having been submitted to the effect that it has been categorically laid down therein vide paragraph 21 by the Hon ble Supreme Court that the verdicts in Adalat Prasad Vs. Rooplal Jindal (2004) 7 SCC 338 and Subramanium Sethuraman Vs. State of Maharashtra (2004) 13 SCC 324, would not warrant any reconsideration and that the Trial Court cannot be conferred with inherent power either to review or recall its orders of issuance of process in terms of Section 138 of the NI Act, 1881 after having taken cognizance thereof. The other alternate submission made on behalf of the petitioners is to the effect that the verdict relied upon by the learned Trial Court of this Court in M.L Gupta and Anr. (supra), in view of the verdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 of the Act which clearly speaks of commission of offence by the Company. The learned counsel for the respondents have vehemently urged that the use of the term as well as in the section is of immense significance and, in its tentacle, it brings in the Company as well as the Director and/or other officers who are responsible for the acts of the Company and, therefore, a prosecution against the Directors or other officers is tenable even if the Company is not arraigned as an accused. The words as well as have to be understood in the context. *** 58. Applying the doctrine of strict construction, we are of the considered opinion that commission of offence by the Company is an express condition precedent to attract the vicarious liability of others. Thus, the words as well as the Company appearing in the section make it absolutely unmistakably clear that when the Company can be prosecuted, then only the persons mentioned in the other categories could be vicariously liable for the offence subject to the averments in the petition and proof thereof. One cannot be oblivious of the fact that the Company is a juristic person and it has its own respectability. If a finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al persons mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of the Negotiable Instruments Act. , with it having been submitted on behalf of the petitioners that the said principle of law has also been applied in this very verdict in observations in paragraphs 113 114, which read to the effect:- 113. In this case, the two complaints dated 12-3-2018 and 14- 3-2018 under Section 138 read with Section 141 of the Negotiable Instruments Act were filed by the respondent against the corporate debtor along with persons in charge of and responsible for the conduct of business of the corporate debtor. On 14-2-2020, the adjudicating authority admitted a petition under Section 9 IBC against the corporate debtor and imposed a moratorium. The impugned interim order dated 20- 2-2020 is for the issuance of non-bailable warrants against two of the accused individuals. 114. Given our judgment in Civil Appeal No.10355 of 2018, the moratorium provision not extending to persons other than the corporate debtor, this appeal also stands dismissed. , thus, making it apparent that despite the moratorium proceedings contained in Section 14 of the IBC by wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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