Cheque dishonour prosecution survives sick company moratorium; civil recovery stays do not bar section 138 proceedings.

Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 was confined to civil recovery measures such as winding up, execution, distress, receiver appointment and suits for money or enforcement of security. That moratorium did not extend to criminal prosecution under section 138 of the Negotiable Instruments Act, 1881, because dishonour of cheque creates a distinct penal liability once the statutory ingredients are met. The wider language of section 22(1) was not read to displace the specific offence under section 138. Accordingly, pendency of proceedings under the sick company law does not bar or suspend a cheque dishonour prosecution.

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Issues: Whether the pendency of proceedings under section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 barred a prosecution under section 138 of the Negotiable Instruments Act, 1881 for dishonour of cheque.

Analysis: Section 138 creates a penal liability on dishonour of a cheque issued in discharge of a legally enforceable debt or liability, and the offence is complete when the statutory requirements are satisfied. Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985, on its language, stays proceedings relating to winding up, execution, distress, appointment of receiver, and suits for recovery of money or enforcement of security against the sick industrial company. The provision was held to be directed to civil recovery and not to criminal prosecution. The wider expression used in section 22(1) was not read to override the specific penal provision in section 138 of the Negotiable Instruments Act, 1881.

Conclusion: Section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 does not bar or suspend prosecution under section 138 of the Negotiable Instruments Act, 1881.

Ratio Decidendi: A moratorium on civil recovery proceedings under section 22(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 does not extend to a criminal prosecution under section 138 of the Negotiable Instruments Act, 1881, which operates as a distinct penal liability.

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