TMI Blog2023 (1) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... N.I Act? - HELD THAT:- In view of the legal position settled by the Three Bench of the Apex Court, in P. Mohanraj's case [ 2021 (3) TMI 94 - SUPREME COURT ], holding the view that, moratorium provision contained under Section 14 (1) of IBC would apply only to a corporate debtor and the natural persons mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of the N.I.Act - Therefore, the complaint against the petitioners (accused Nos.1 to 7) cannot be quashed, simply on the ground of moratorium order as per Annexure-B. However, the prosecution against the 1st petitioner/1st accused being corporate debtor can be kept in abeyance till finalization of the moratorium proceedings, while allowing prosecution against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FOR THE PETITIONER : BY ADVS. V.KRISHNA MENON J.SURYA PRINSUN PHILIP FOR THE RESPONDENT : BY ADVS. THOMAS T.VARGHESE SRI.G.SUDHEER PP. ORDER This is a petition filed by accused Nos.1 to 7 in CMP No.3280/2019 on the files of Judicial First Class Magistrate Court (Negotiable Instruments Act Cases), Ernakulam, to quash the above CMP (Annexure-A complaint herein) by invoking power under Section 482 of the Code of Criminal Procedure (hereinafter referred as 'Cr.P.C.' for convenience). 2. Two questions require answer in this matter, are as under: (i) Is moratorium under Section 14 (1) of the Insolvency and Bankruptcy Code, 2016 would apply to non-corporate debtor/debtors dealt under Section 141 of the Negotiable I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;IBC' for convenience). It is specifically pointed out that as per Annexure-B, moratorium order under Section 14 (1) of IBC has been passed in relation to M/s PVS Memorial Hospital Private Ltd., the 1st petitioner herein. Therefore, no prosecution against the petitioners is permissible. 7. In para.101 and 102 of P. Mohanraj Ors. v. M/s.Shah Brothers Ispat Pvt. Ltd.'s case (supra) the Apex Court held the legal position as under: 101: As far as the Directors/persons in management or control of the corporate debtor are concerned, a Sections138/141 proceeding against them cannot be initiated or continued without the corporate debtor-see [(2012) 5 SCC 661 : (2012) 3 SCC (Civ) 351 : (2012) 3 SCC (Cri) 241], Aneeta Hada v. God ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of the ratio laid down in C.V.Parekh's case (supra) which is a three-Judge Bench decision. Thus, the view expressed in Sheoratan Agarwal v. State of M.P's case (supra) does not correctly law down the law and, accordingly, is hereby overruled. The decision in Anil Hada's case (supra) is overruled with the qualifier as stated in para.51. The decision in [(1987) 3 SCC 684 : 1987 SCC (Cri) 632], U.P. Pollution Control Board v. Modi Distillery has to be treated to be restricted to its own facts as has been explained by us hereinabove. 102. Since the corporate debtor would be covered by the moratorium provision contained in Section 14 IBC, by which continuation of Sections 138/141 proceedings against the corporate debtor and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be statutorily liable under Chapter XVII of the N.I Act. 10. In view of the legal position settled by the Three Bench of the Apex Court, in P. Mohanraj's case (supra), holding the view that, moratorium provision contained under Section 14 (1) of IBC would apply only to a corporate debtor and the natural persons mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of the N.I.Act. Therefore, the complaint against the petitioners (accused Nos.1 to 7) cannot be quashed, simply on the ground of moratorium order as per Annexure-B. However, the prosecution against the 1st petitioner/1st accused being corporate debtor can be kept in abeyance till finalization of the moratorium proceedings, while allowing prosec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal Appeal No.529 of 2017 (Arising out of Special Leave Petition (Crl) No.10899 of 2015), Ashoke Mal Bafna v. Upper India Steel Mfg. Engg. Co. Ltd. also has been placed in this connection. 13. The legal position is not in dispute and the same is as held in Dilip Hariramani's case (supra). Thus as regards to the application of vicarious liability in terms of criminal law as provided under Section 141 of the N.I. Act is concerned, the same cannot be fastened because of the civil liability. Vicarious liability under sub- section (1) to S.141 of the NI Act can be pinned when the person is in overall control of the dayto- day business of the company or firm. Vicarious liability under sub-section (2) to S.141 of the NI Act can arise bec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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