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TMI Blog2022 (12) TMI 1565X X X X Extracts X X X X X X X X Extracts X X X X ..... 62 and 2663 of 2015 on the file of the Judicial Magistrate First Class Court, Tripunithura. They impugn order dated 23.06.2022 in C.M.P.No.49/2022. The respondents herein are the State of Kerala as well as the complainant in the above cases. 2. Heard the learned counsel for the petitioners as well as the learned counsel appearing for the 1st respondent and the learned Public Prosecutor. 3. Parties in this case shall be referred to as `complainant' and `accused', with reference to their status before the court below. 4. In this matter, the petitioners seek to set aside AnnexureVII order. 5. Short facts: The complainant is a doctor practicing in Dubai. Accused No.1 is a private limited company. Accused Nos.2 to 4 are the Chairman, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 of the Negotiable Instruments Act. 6. It is submitted by the learned counsel for the revision petitioners that proceedings were initiated against the 1st accused under Section 9 of the Insolvency and Bankruptcy Rules, 2016 (`IBC' for short) and by the National Company Law Tribunal, Kochi Bench and on 03.11.2021 the National Company Law Tribunal had issued a moratorium prohibiting, inter alia, the institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority. Highlighting the said fact, it was zealously argued before the trial court that the present prosecution launched against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity. Thus it was argued before the trial court that the present prosecution launched against the company and its officials could not be proceeded. 9. While arguing to upset the said finding, the learned counsel for the revision petitioners attempted to establish that the Apex Court in P.Mohanraj & Ors. v. M/s.Shah Brothers Ispat Pvt. Ltd.'s case (supra) not considered the impact of Section 141 of the Negotiable Instruments Act. According to the learned counsel for the petitioner, when the cheque issued by a company was dishonoured, the principal debtor is the company and the other officials are only vicariously liable. Therefore, no prosecution against the other persons, after staying the prosecution against the corporate debtor, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hariramani v. Bank of Baroda, wherein it was held that the provisions of Section 141 impose vicarious liability by deeming fiction which presupposes and requires the commission of the offence by the company or firm. Therefore, unless the company or firm has committed the offence as a principal accused, the persons mentioned in sub-section (1) or (2) would not be liable and convicted as vicariously liable. S.141 of the NI Act extends vicarious criminal liability to officers associated with the company or firm when one of the twin requirements of Section 141 has been satisfied, which person(s) then, by deeming fiction, is made vicariously liable and punished. However, such vicarious liability arises only when the company or firm commits the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn in [(1970) 3 SCC 491 : 1971 SCC (Cri) 97], State of Madras v. C.V.Parekh which is by a larger Bench and hence, is a binding precedent. On the aforesaid ratiocination, the decision in [(2000) 1 SCC 1 : 2001 SCC (Cri) 174], Anil Hada v. Indian Acrylic Ltd. 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 tex non cogit and impossibilia gets attracted. xxxx xxxx xxxx xxxx 59. In view of our aforesaid analysis, we arrive at the irresistible conclusion that for maintaining the prosecution under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btor because of a statutory bar, such proceedings can be initiated or continued against the persons mentioned in Sections 141(1) and (2) of the Negotiable Instruments Act. This being the case, it is clear that the moratorium provision contained in Section 14 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." 13. Thus the law is well declared by the Apex Court that moratorium provision contained in Sec.14 of IBC would apply only to a corporate debtor, the natural persons mentioned in Section 141, continuing to be statutorily liable under Chapter XVII of the N.I Act. In view of the above legal position settled b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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