2023 (2) TMI 1142 - SC - Insolvency and Bankruptcy

Supreme Court dismisses petition challenging bail extension for directors in insolvency case, advises High Court approach.

The Supreme Court dismissed the petition challenging the extension of anticipatory transit bail to suspended directors of a company facing insolvency ... Locus Standi of Petitioner to file SLP - Seeking Extension of transit anticipatory bail granted - order impugned by the petitioner arises out of the proceedings initiated by the respondents herein before High Court of Delhi, challenging the First Information Report lodged against them - petitioner contends that the petitioner is an interested party to challenge the extension of anticipatory transit bail granted to the respondents who are suspended directors of the company against which insolvency proceedings are pending under IBC. HELD THAT:- It is an admitted fact that the petitioner is neither the informant nor a party to the proceedings pending before the High Court and is totally unconnected with the First Information Report lodged by the financial creditors who were also the members of the committee of creditors. The petitioner has no locus in the matter and thus, the permission to file special leave petition cannot be granted - Application dismissed. Special Leave Petition (Crl.) No. 2653-54 of 2023 Validity of FIR - quashing of the First Information Report by invoking Section 482 of Criminal Procedure Code (Cr.PC) before the Delhi High Court - HELD THAT:- Since the proceedings are pending before the High Court of Delhi awaiting an adjudication, there is no reason or occasion to interfere with the same at this stage. There are no reason to believe that the legal position, as learned counsel for the petitioners has tried to canvass by relying upon the aforesaid judgments of this Court, will not be taken into consideration by the High Court, as and when the same is brought to its notice. Thus, no useful purpose would be served by keeping this petition pending before this Court and interest of justice would stand served by requesting the High Court to consider and decide, Criminal M.C. No. 6408 of 2022, Shiv Kumar & Ors. Vs. State of West Bengal & Anr. pending before it as expeditiously as possible preferably within a period of 6 weeks from the date of receipt of this order in accordance with law on its own merits. Writ Petition (Criminal) No. 71 of 2023 Seeking to quash the First Information Report - Sections 406,420 and 120-B of IPC - HELD THAT:- There are no reason to entertain this Writ Petition for the reliefs sought under Article 32 of the Constitution of India when the petitioners can effectively approach the jurisdictional High Court for the said reliefs, more particularly, when the petitioners have already invoked the jurisdiction of the High Court, in respect of an identical First Information Report, lodged against them at Calcutta. This Writ Petition need not be entertained. Liberty is reserved to the petitioners to approach the jurisdictional High Court by means of an appropriate proceedings, seeking appropriate reliefs. Petition disposed off. Issues:1. Challenge to extension of anticipatory transit bail to suspended directors of a company facing insolvency proceedings.2. Quashing of a First Information Report (FIR) under Sections 406, 420, 465, 467, 468, 471, and 120-B of the Indian Penal Code.3. Jurisdiction of High Court in quashing FIR and related proceedings.4. Petition under Article 32 of the Constitution seeking to quash FIR and consequential proceedings.Issue 1: Challenge to Extension of Anticipatory Transit BailThe petitioner, an unsecured financial creditor of a company facing insolvency proceedings, challenged the extension of anticipatory transit bail granted to suspended directors of the company. The petitioner contended that due to the insolvency proceedings, the Resolution Professional was directed not to proceed with the resolution plan approval, which was subsequently vacated. Despite the petitioner's interest in the matter, the Supreme Court held that the petitioner had no locus standi as they were not connected to the First Information Report lodged against the directors. Therefore, the Court dismissed the petition and declined to grant permission to file a special leave petition.Issue 2: Quashing of FIRSuspended directors of a company sought the quashing of an FIR registered against them under various sections of the IPC. The directors argued that the dispute was of a civil nature being given a criminal angle, amounting to an abuse of the legal process. They also highlighted the registration of a similar FIR in Delhi for the same allegations. The Supreme Court, noting that the matter was pending before the High Court of Delhi, refused to interfere at that stage. The Court directed the High Court to expeditiously decide the matter within six weeks and ordered no coercive action against the directors until the disposal of the case.Issue 3: Jurisdiction of High Court in Quashing FIRIn a separate petition, the petitioners approached the Supreme Court under Article 32 seeking to quash an FIR and related proceedings. The Court declined to entertain the petition, stating that the High Court was the appropriate forum for such reliefs. The petitioners were given liberty to approach the High Court within two weeks. The Court directed that if the petitioners filed a quashing proceeding, it should be tagged with the earlier pending petition before the High Court of Delhi to avoid conflicting decisions. No coercive action was to be taken against the petitioners until the disposal of the quashing proceedings by the High Court.Issue 4: Petition under Article 32 of the ConstitutionThe petitioners sought to quash an FIR and consequential proceedings under Article 32 of the Constitution. The Supreme Court declined to entertain the petition, advising the petitioners to approach the High Court for relief, especially since a similar petition was already pending before the High Court of Delhi. The petitioners were granted liberty to approach the High Court within two weeks, and if they did so, the subsequent petition would be heard and disposed of by the same Bench. No coercive action was to be taken against the petitioners until the High Court's decision.This comprehensive analysis covers the various legal issues addressed in the judgment by the Supreme Court of India, providing detailed insights into each aspect of the case.