TMI Blog2023 (10) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... SUS M/S. SHAH BROTHERS ISPAT PVT. LTD. [ 2021 (3) TMI 94 - SUPREME COURT] , reiterated in M/S. NAG LEATHERS PVT. LTD. VERSUS M/S. DYNAMIC MARKETING AND ANOTHER [ 2022 (4) TMI 1153 - SUPREME COURT] and NARINDER GARG AND ORS. VERSUS KOTAK MAHINDRA BANK LTD. AND ORS. [ 2022 (3) TMI 1534 - SUPREME COURT] , the proceedings under Section 138/141 of NI Act can continue against the directors and persons responsible and incharge of accused company, i.e. the petitioners herein even after moratorium period under Section 14 of IBC, 2016 has commenced. This Court notes that Section 210 deals with the procedure to be followed by a Magistrate when there is a complaint case and police investigation in progress, in respect of the same offence , and provides that in such a case, the Magistrate shall stay the proceedings before it. In the case at hand, while the offence alleged in the FIR registered in Noida, Uttar Pradesh on the complaint of petitioner Ramji Sharma relates to forgery, cheating, breach of trust committed by some other persons in relation to some cheques, the present complaint case pertains to offence under Section 138/141 of NI Act for dishonor of cheque in question - the argume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anding payments and ultimately had sent a demand notice on 13.04.2018 vide which the accused persons were directed to clear the outstanding amount. Thereafter, in the first week of May 2018, accused no. 2 i.e. Ashish Mishra had telephonically contacted the complainant company and had asked the AR of the company to collect the cheque from the office of accused company. Upon such request, the AR of the complainant company had visited the office of accused where he had met both accused no. 2 i.e. Ashish Mishra and accused no. 3 i.e. Ramji Sharma and the said persons had issued and handed over the cheque bearing number 750468, dated 18.05.2018, drawn on Punjab National Bank, Sector 27, Noida, Uttar Pradesh amounting to Rs. 12,52,940/- in discharge of the part liability of the accused company on the assurance that the cheque would be encashed upon its presentation. Thereafter, the complainant had presented the cheque with its banker namely State Bank of India, Mayapuri, New Delhi for encashment on the same day, but to the utter shock and surprise, the cheque in question had got dishonoured vide returning memo dated 19.05.2018 for the reasons Funds Insufficient . As alleged, the complai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the accused company on the date of dishonour of cheque, the learned Trial Court ought to have followed the provision of Section 210 of Cr.P.C. which mandates that when there is a complaint case and police investigation in respect of the same offence pending, the proceedings in complaint case should be stayed. Therefore, it is argued that the present petitions be allowed and the complaint case be quashed. 4. On the other hand, learned counsel for the respondent has argued that there are no reasons to quash the present complaint case. As regards the argument of moratorium under IBC, 2016, it is stated that even as per the decision of P. Mohanraj (supra), only the proceedings against corporate debtor can be stayed and the same does not cover natural persons such as directors of the company. It is also submitted that the contentions raised on behalf of the petitioners regarding stay of proceedings as per Section 210 of Cr.P.C. have already been considered by the learned Trial Court and the application on this aspect stands dismissed by way of a reasoned order. It is also stated that there are specific averments in the complaint against the accused persons/petitioners herein and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence: [Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecution under this Chapter.] (2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulfil the requirements of Section 141, the complaint has to proceed in regards the law. (d) In construing a complaint a hyper-technical approach should not be adopted so as to quash the same. (e) The laudable object of preventing bouncing of cheques and sustaining the credibility of commercial transactions resulting in the enactment of Sections 138 and 141 respectively should be kept in mind by the Court concerned. (f) These provisions create a statutory presumption of dishonesty exposing a person to criminal liability if payment is not made within the statutory period even after the issue of notice. (g) The power of quashing should be exercised very sparingly and where, read as a whole, the factual foundation for the offence has been laid in the complaint, it should not be quashed. (h) The Court concerned would owe a duty to discharge the accused if taking everything stated in the complaint is correct and construing the allegations made therein liberally in favour of the complainant, the ingredients of the offence are altogether lacking. *** 47. Our final conclusions may be summarised as under: a.) The primary responsibility of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm. This would make them liable to face the prosecution but it does not lead to automatic conviction. Hence, they are not adversely prejudiced if they are eventually found to be not guilty, as a necessary consequence thereof would be acquittal. d.) If any Director wants the process to be quashed by filing a petition under Section 482 of the Code on the ground that only a bald averment is made in the complaint and that he/she is really not concerned with the issuance of the cheque, he/she must in order to persuade the High Court to quash the process either furnish some sterling incontrovertible material or acceptable circumstances to substantiate his/her contention. He/she must make out a case that making him/her stand the trial would be an abuse of process of Court... 8. A perusal of the complaint filed under Section 138 reveals that there are specific averments against the petitioners herein that they were responsible and in-charge of the day-to-day affairs of the accused company, being its director and additional director. It is also specifically averred that petitioner Ashish Mehra had telephonically contacted the complaint company and had asked it to receive the chequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Agarwal [(1984) 4 SCC 352 : 1984 SCC (Cri) 620] runs counter to the ratio laid down in C.V. Parekh [(1970) 3 SCC 491 : 1971 SCC (Cri) 97] which is by a larger Bench and hence, is a binding precedent. On the aforesaid ratiocination, the decision in Anil Hada [(2000) 1 SCC 1 : 2001 SCC (Cri) 174] has to be treated as not laying down the correct law as far as it states that the Director or any other officer can be prosecuted without impleadment of the company. Needless to emphasise, the matter would stand on a different footing where there is some legal impediment and the doctrine of lex non cogit ad impossibilia gets attracted. xxx xxx xxx 56. We have referred to the aforesaid passages only to highlight that there has to be strict observance of the provisions regard being had to the legislative intendment because it deals with penal provisions and a penalty is not to be imposed affecting the rights of persons, whether juristic entities or individuals, unless they are arrayed as accused. It is to be kept in mind that the power of punishment is vested in the legislature and that is absolute in Section 141 of the Act which clearly speaks of commission of offence by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h continuation of Section 138/141 proceedings against the corporate debtor and initiation of Section 138/141 proceedings against the said debtor during the corporate insolvency resolution process are interdicted, what is stated in paragraphs 51 and 59 in Aneeta Hada (supra) would then become applicable. The legal impediment contained in Section 14 of the IBC would make it impossible for such proceeding to continue or be instituted against the corporate debtor. Thus, for the period of moratorium, since no Section 138/141 proceeding can continue or be initiated against the corporate debtor because of a statutory bar, such proceedings can be initiated or continued against the persons mentioned in Section 141(1) and (2) of the Negotiable Instruments Act. This being the case, it is clear that the moratorium provision contained in Section 14 of the IBC would apply only to the corporate debtor, the natural persons mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of the Negotiable Instruments Act... (emphasis supplied) 10. Reiterating the aforesaid proposition, the Hon ble Supreme Court in Nag Leathers Pvt. Ltd. v. Dynamic Marketing Partnership ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in Section 141 of the Act would continue to be statutorily liable under the provisions of the Act. 5. It is submitted by Mr. Gopal Sankaranarayanan, learned Senior Advocate that the resolution plan having been accepted in which the dues of the original complainant also figure, the effect of such acceptance would be to obliterate any pending trial under Sections 138 and 141 of the Act. 6. The decision rendered in P. Mohanraj is quite clear on the point and, as such, no interference in this petition is called for. 7. This writ petition is, therefore, dismissed... 12. In the present case, the cheque was issued by the accused company in favour of complainant, towards the repayment of dues in the normal course of business transactions. The said cheque was handed over to the AR of complainant company by both the petitioners upon assurance that the same would get encashed, and the cheque was signed by the petitioner Ramji Sharma. The cheque upon presentation was dishonoured on 19.05.2018, whereas the application under Section 7 of IBC, 2016 was allowed by the Hon ble NCLT on 08.06.2018, i.e. subsequent to dishonor of cheque. 13. Thus, in view of the ratio of H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of mediation and accordingly matter was referred to mediation but the matter was received as unsettled from mediation centre and it is only thereafter on 24.10.2019 the present application was moved on behalf of accused no. 2 seeking stay in the present matter. The said FIR as mentioned above in the present application is dated 06.06.2019 is clearly after the filing of present complaint and has been registered on the complaint of accused no. 3 Ramji Sharma u/s 406/471/468/467/420 IPC. This court has thoroughly perused the FIR which nowhere mentions about the cheque in question in particular. The said FIR lodged by accused no. 3 pertains to different offences of cheating/forgery and is not the subject matter of inquiry/trial in the present complaint. The said FIR is lodged in P.S. Sector-20 Noida which is also not under jurisdiction of this court. So, the subject matter being different in FIR, essential ingredients of Section 210 Cr.PC are not satisfied herein. Also the offence under Section 138 N.I. Act is a special offence different from other offences of IPC the purpose of which is to restore faith in the commercial transactions between the parties. A separate cheating case file ..... X X X X Extracts X X X X X X X X Extracts X X X X
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