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2024 DIGILAW 725 (TS)

Ghanshyam Surajbhali Kurmi v. State of Telangana

2024-09-11

K.SUJANA

body2024
ORDER : This Criminal Petition is filed under Section 482 of Code of Criminal Procedure, 1973 (for short ‘Cr.P.C.’) to quash the proceedings against the petitioner/accused No.2 in C.C.No.489 of 2018 on the file of the learned XI Additional Chief Metropolitan Magistrate, City Criminal Court, Secunderabad, registered for the offences punishable under Section 142 of the Negotiable Instruments Act, 1881 (for short ‘the Act’). 2. Brief facts of the case are that respondent No.2/de facto complainant lodged a private complaint under Section 200 Cr.P.C. before the XI Additional Chief Metropolitan Magistrate, City Criminal Courts, Secunderabad, stating that it is a Private Limited Company doing business of trading of various chemicals. Due to the acquaintance, the petitioner has approached respondent No.2 for supply of Acetone of 16,000 KGs and accordingly, he purchased the said Acetone and raised tax invoice for Rs.8,33,425/- and the material was also delivered him. As per the purchase order, the petitioner issued two cheques bearing Nos.002074 and 002075 for an amount of Rs.4,33,425/- and Rs.4,00,000/- respectively. Respondent No.2 presented the said cheques in the bank but the same were dishonoured with an endorsement ‘Account blocked’. When the said fact was brought to the notice to the petitioner, he did not respond properly and gave evasive replies. Respondent No.2 vexed with the attitude of the petitioner, issued legal notice to the petitioner to pay the amount due to it within fifteen days from the date of receipt of the said legal notice. The said legal notice was also refused by the petitioner and thereafter, he gave reply with false allegations without making payment. Basing on the said complaint, a case was registered against the petitioner for the offence punishable under Section 138 of NI Act. 3. Heard Sri H. Yogesh Kumar, learned counsel appearing on behalf of the petitioner as well as Sri S. Ganesh, learned Assistant Public Prosecutor appearing on behalf of respondent No.1-State and Sri D. Sudharshan, learned counsel appearing on behalf of respondent No.2. 4. 3. Heard Sri H. Yogesh Kumar, learned counsel appearing on behalf of the petitioner as well as Sri S. Ganesh, learned Assistant Public Prosecutor appearing on behalf of respondent No.1-State and Sri D. Sudharshan, learned counsel appearing on behalf of respondent No.2. 4. Learned counsel for the petitioner submitted that pending litigation, the company had gone into liquidation vide case No.CP(IB)269/9/HDB/2018 and the process was completed against the company vide orders dated18.12.2019 in I.A.No.439 and 531 of 2019 in CP(IB)269/HDB/2018, as such, no claims could be made against the petitioner and that the State Bank of India had filed insolvency proceedings against the petitioner vide case No.CP(IB)297/95/HDB/2021 and the same is pending before NCLT. 5. Learned counsel further submitted that the above facts were informed to the Court below during the proceedings, but respondent No.2 did not choose to file any application before the NCLT for recovery of amount or claims before the liquidator. He further submitted that it is clear and evident from the orders as well as the provision under Section 31 of the Insolvency and Bankruptcy Code that no claims survive after the resolution plan is approved by the NCLT and all claims are subject to the said plan. Therefore, prayed the Court to quash the proceedings against the petitioner. 6. In support of this submissions, learned counsel for the petitioner relied on the judgment of the High Court of Punjab and Haryana at Chandigarh in Vijay Kumar Ghai vs. Pritpal Singh Babbar, 2022 SCC OnLine P&H 1672, wherein in paragraph No.86, it is held as follows: “86. In that very context, as regards the dismissal by the Supreme Court of other appeals and writ petitions as were heard with P. Mohanraj’s case (as have been pointed to by Mr. In that very context, as regards the dismissal by the Supreme Court of other appeals and writ petitions as were heard with P. Mohanraj’s case (as have been pointed to by Mr. Mehta, learned counsel for the respondent), the dismissal would seem to be on account of the fact that the proceedings under section 138 against the Directors of the companies as were corporate debtors in those cases, were firstly held to be independent of the proceedings under the Code against the corporate debtor itself and further, there is no interim moratorium referred to in Section 14, with the moratorium mentioned in that provision, being one as has to be declared by the Adjudicating Authority; and consequently the Supreme Court held that such declaration having come at a stage far after the proceedings were initiated under Section 138 of the Act, the moratorium would not apply (obviously also because the Directors were treated different t the corporate debtor itself); which is a wholly different situation to that as is postulated in Section 96, wherein it is an interim moratorium that comes into effect, by which all proceedings qua any debt of the individual/partnership firm etc., would be deemed to have been stayed.” 7. On the other hand, learned counsel for respondent No.2 submitted that the proceeding before NCLT is not a bar for maintenance of Section 138 of NI Act and it is criminal proceedings. Therefore, pendency of the case before NCLT is not a ground for quashing the proceedings and prayed the Court to dismiss the petition. 8. Having gone through the rival submissions made by both the learned counsel and having gone through the material available on record, the main contention of the petitioner is that respondent No.2 company has gone into liquidation and the case is pending before NCLT and at this stage, the petition under Section 138 of NI Act is not maintainable and that when the liquidation proceedings are pending, the claims have to be made before the NCLT only, whereas, respondent No.2 contends that criminal proceedings can be maintainable. In view of the judgment of the High Court of Punjab and Haryana at Chandigarh in Vijay Kumar Ghai case (supra), under Section 138 of the NI Act, the proceedings are deemed to be stayed. In view of the judgment of the High Court of Punjab and Haryana at Chandigarh in Vijay Kumar Ghai case (supra), under Section 138 of the NI Act, the proceedings are deemed to be stayed. Even though the trial Court initiated the proceedings prior to NCLT proceedings, whereas, in the present case, NCLT proceedings are completed and the liquidator was already appointed. Therefore, the judgment relied upon by the petitioner is not applicable to the facts of the case on hand. 9. Further, at this stage, it is imperative to note the judgment of the Hon’ble Supreme Court in Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation of India Limited, (2023) 10 Supreme Court Cases 545, wherein in paragraph Nos.17 to 19, it is held as under: “17. The scope and nature of proceedings under the two Acts are quite different and would not intercede each other. In fact, a bare reading of Section 14 IBC would make it clear that the nature of proceedings which have to be kept in abeyance do not include criminal proceedings, which is the nature of proceedings under Section 138 of NI Act. Section 138 NI Act are not recovery proceedings. They are penal in character. A person may face imprisonment or fine or both under Section 138 NI Act. It is not a recovery of the amount with interest as debt recovery proceedings would be. They are not akin to suit proceedings. 18. It cannot be said that the process under IBC whether under Section 31 or Sections 38 to 41 which can extinguish the debt would ipso facto apply to the extinguishment of the criminal proceedings. No doubt in terms of the scheme under IBC there are sacrifices to be made by parties to settle the debts, the company being liquidated or revitalised. The appellant has been roped in as a signatory of the cheque as well as the Promoter and Managing Director of the accused company, which availed of the loan. The loan agreement was also signed by him on behalf of the company. When the appellant seeks is escape out of criminal liability having defaulted in payment of the amount at a very early stage of the loan. In fact, the loan account itself was closed. So much for the bona fides of the appellant. 19. The loan agreement was also signed by him on behalf of the company. When the appellant seeks is escape out of criminal liability having defaulted in payment of the amount at a very early stage of the loan. In fact, the loan account itself was closed. So much for the bona fides of the appellant. 19. The criminal liability and the fines are built on the principle of not honouring a negotiable instrument, which affects trade. This is apart from the principle of financial liability per se. To say that under a scheme which may be approved, a part amount will be recovered or if there is no scheme a person may stand in a queue to recover debt would absolve the consequences under Section 138 NI Act, is unacceptable.” 10. In view of the above judgment, the scope and nature of proceedings under the two Acts are quite different and would not interdict each other. Further Section 14 of IBC would make it clear that the nature of proceedings which have to be kept in abeyance do not include criminal proceedings, which is the nature of proceedings under Section 138 of NI Act. Also, it cannot be said that the process under IBC whether Section 31 or Sections 38 to 41 of IBC which can extinguish the debt would ipso facto apply to the extinguishment of the criminal proceedings. Held, to say that under a scheme which may be approved IBC, a part amount will be recovered or if there is no scheme a person may stand in a queue to recover debt would absolve the consequences under Section 138 of NI Act, is unacceptable. Therefore, this Court does not find any merit in the criminal petition to quash the proceedings against the petitioner and the same is liable to be dismissed. 11. Accordingly, the Criminal Petition is dismissed. Miscellaneous applications, if any pending, shall also stand closed.