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2022 DIGILAW 172 (TS)

Speck Systems Ltd. v. Bujji

2022-03-10

CHILLAKUR SUMALATHA

body2022
ORDER : 1. Heard the submission of the learned counsel for the petitioner as well as the learned counsel appearing for the 1st respondent. As the issue involved is in respect of taking cognizance of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881, the 2nd respondent i.e. the State is a formal party. 2. Seeking to quash the proceedings that are pending against the petitioner in C.C.No.1045 of 2013 on the file of the Court of X Metropolitan Magistrate, Cyberabad at Malkajgiri, the petitioner has filed this criminal petition invoking Section 482 Cr.P.C. 3. The material brought on record reveals that the 1st respondent (hereinafter be referred to as “the complainant”) filed a complaint against the petitioner herein and one Mr. K.C.M. Kumar alleging that they committed an offence punishable under Section 138 of Negotiable Instruments Act. Seeking to condone the delay of 242 days in filing the said complaint, a separate interlocutory application was filed. The Court by the order dated 19.03.2013, condoned the said delay of 242 days on payment of costs of Rs.2,500/- to the District Legal Services Authority, Ranga Reddy District. Aggrieved by the same, the petitioner (hereinafter be referred to as “accused No.1”) seeks for quashing the entire proceedings in the Calendar Case. 4. In the light of the aforementioned factual scenario, the point that culminates for consideration is ; Whether there exist any justifiable grounds to invoke the powers granted under Section 482 Cr.P.C. to quash the proceedings that are pending against the petitioner/A-1 in C.C.No.1045 of 2013 on the file of the Court of X Metropolitan Magistrate, Cyberabad at Malkajgiri as prayed for. 5. Vigorously arguing that continuation of proceedings against accused No.1 in the Calendar Case for the offence punishable under Section 138 of Negotiable Instruments Act is unsustainable, the learned counsel for accused No.1 submits that as long as the moratorium proceedings are there protecting accused No.1 i.e. the petitioner herein who is a Corporate Debtor, initiation and continuation of proceedings either in the suit or for the offence punishable under Section 138 of Negotiable Instruments Act, is unsustainable under law. The learned counsel contends that the complainant lodged a complaint that accused No.1 being a Company and it’s Managing Director i.e. accused No.2 issued a cheque and the same was dishonored, and thereby, they committed the offence punishable under Section 138 of the Negotiable Instruments Act and having regard to the initiation of the insolvency proceedings, the said complaint is unsustainable under law, and therefore, the proceedings in the Calendar Case are liable to be quashed. The learned Counsel for petitioner/accused No.1 in support of his submission, relied upon the decision of the Hon’ble Apex Court in the case between P.Mohanraj & others v. Shah Brothers Ispat Private Ltd., (2021) 6 SCC 258 , wherein, the Court at paragraph No.102 of the judgment, held as follows: “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 initiation of Sections 138/141 proceedings against the said debtor during the corporate insolvency resolution process are interdicted, what is stated in paras 51 and 59 in Aneeta Hada [ (2012) 5 SCC 661 ] would then become applicable. The legal impediment contained in Section 14 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 Sections 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 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.” 6. Learned Counsel for the petitioner further submitted that basing on the similar set of facts, the erstwhile common High Court in its order in the case between M/s.Golden Jubilee Hotels Ltd. v. M/s.EIH Ltd. and another, CRP.Nos.4881, 4884, 4885 & 4886 of 2018, dt.27.09.2018, observed that the trial Court grievously erred in dealing with the suit proceedings prior to moratorium order, and therefore, the order of the trial Court is unsustainable. 7. 7. Submitting that the decisions referred supra are not applicable to the facts of the case, the learned counsel for the complainant contended before this Court that the petitioner/accused No.1 did not take to the notice of the National Company Law Tribunal about the pendency of the Calendar Case. He said that when the order was issued in the year 2021, the Calendar Case is of the year 2013, and therefore, the order of National Company Law Tribunal does not apply to the case on hand. 8. The learned counsel for petitioner forwarded the copy of the order that is rendered by the National Company Law Tribunal, Hyderabad Bench, Hyderabad dated 02.09.2021. A perusal of the said order reveals that the financial creditor is IDBI Bank Ltd. and the Corporate Debtor is the petitioner herein. Dealing with the contentions raised, the Bench of the National Company Law Tribunal gave certain directions while admitting the said petition. The first direction as mentioned in para 15 of the order is as under : “The Bench hereby prohibits 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; transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein; any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); the recovery of any property by an owner or lessor where such property is occupied by or in possession of the Corporate Debtor.” 9. Thus, it is clear that the Bench prohibited the institution of suits, continuation of pending suits or proceedings against the Corporate Debtor. But, that does not mean that the proceedings initiated much earlier to the date of the said order are required to be quashed as sought for. Therefore, this Court holds that the order dated 02.09.2021 that is issued by the National Company Law Tribunal, Hyderabad Bench, Hyderabad does not help the petitioner for getting the proceedings in the Calendar Case quashed. 10. Therefore, this Court holds that the order dated 02.09.2021 that is issued by the National Company Law Tribunal, Hyderabad Bench, Hyderabad does not help the petitioner for getting the proceedings in the Calendar Case quashed. 10. Further, a perusal of the contents of the criminal petition filed before this Court discloses a strange interplay of the prayer sought for. The relief sought for is as under : “It is therefore prayed that this Hon’ble Court may be pleased to quash the proceedings in C.C.No.1045 of 2013 dated 19.03.2013 on the file of the Court of X Metropolitan Magistrate, Cyberabad, Malkajgiri, Ranga Reddy District; and thereby pass such other order or orders as this Hon’ble Court deem fit and proper in the interest of justice.” 11. Challenging the order dated 19.03.2013, thus, the petitioner has sought for quashing of proceedings in C.C.No.1045 of 2013. In this regard, the learned counsel for petitioner submits that before condoning the delay in filing the complaint under Section 138 of Negotiable Instruments Act, notice has to be issued to the accused mentioned therein and as no notice was issued, the proceedings in the Calendar Case have to be quashed. Section 142 of the Negotiable Instruments Act, 1881 lays down the pre-requisites for taking cognizance of offences. Prior to the amendment that was made to the said provision through Act 55 of 2002, there was every requirement for the complainant to file a complaint within one month from the date of cause of action. However, through the amendment, a proviso was added to Section 142(b) of Negotiable Instruments Act that cognizance of the complaint may be taken by the Court after the prescribed period if the complainant satisfies the Court that he had sufficient cause for not making a complaint within such period. 12. On a complaint filed, taking or refusing to take cognizance of the offence is the exclusive prerogative of the Court. At that stage, the alleged accused have no role to play. Therefore, it is unjustifiable to hold and contend that as notice was not issued to the accused before taking cognizance, the order of taking cognizance is unjustifiable. Therefore, this Court is unable to agree with the submission of the learned counsel for petitioner that on that count, the proceedings initiated are liable to be quashed. 13. Therefore, it is unjustifiable to hold and contend that as notice was not issued to the accused before taking cognizance, the order of taking cognizance is unjustifiable. Therefore, this Court is unable to agree with the submission of the learned counsel for petitioner that on that count, the proceedings initiated are liable to be quashed. 13. As far as the first stand i.e. continuation of proceedings before the Court in the light of the order of the National Company Law Tribunal dated 02.09.2021 are concerned, the petitioner has to agitate the same before the trial Court. Thus, with the above observations, this court holds that the petition lacks merits. 14. Resultantly, the petition is dismissed. However, liberty is granted to the petitioner to move appropriate application before the trial Court indicating his contentions with regard to continuation of proceedings in the light of the order dated 02.09.2021 that was passed by the National Company Law Tribunal, Hyderabad Bench, Hyderabad. On making such application, the trial Court is directed to dispose of the same on merits before proceeding with the proceedings in the Calendar Case. 15. As a sequel, pending miscellaneous applications, if any, shall stand closed.