Moratorium under insolvency law does not stop cheque dishonour prosecution; prima facie complaint and statutory presumption sustained quashing challenge.

A moratorium under Section 14 of the Insolvency and Bankruptcy Code does not bar criminal proceedings under Section 138 read with Section 141 of the Negotiable Instruments Act. The complaint alleged issuance and dishonour of cheques and service of demand notice, which was sufficient to disclose a prima facie case. In a quashing petition under Section 482 of the Code of Criminal Procedure, the court must proceed on the complaint averments and not assess the defence in depth or conduct a parallel trial. The statutory presumption under Section 139 also supported maintainability of the complaint, so the request to quash was rejected.

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Issues: Whether the declaration of moratorium under the Insolvency and Bankruptcy Code barred continuation of proceedings under Section 138 read with Section 141 of the Negotiable Instruments Act and justified quashing of the complaint under Section 482 of the Code of Criminal Procedure.

Analysis: The complaint disclosed issuance and dishonour of cheque and service of demand notice. The petitioners relied on the insolvency resolution process and moratorium, but the moratorium under Section 14 of the Insolvency and Bankruptcy Code was held not to extend to criminal proceedings. In a petition for quashing, the Court is to proceed on the averments in the complaint and not conduct a parallel trial or evaluate the defence in depth. The statutory presumption under Section 139 of the Negotiable Instruments Act also supported the prima facie maintainability of the complaint.

Conclusion: The moratorium did not bar the criminal proceedings, and the prayer for quashing was rejected.

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