IBC moratorium does not bar criminal cheque dishonour proceedings under Section 138; criminal revision may continue.

Section 14 moratorium under the Insolvency and Bankruptcy Code does not extend to a criminal prosecution under Section 138 of the Negotiable Instruments Act. The Bombay HC applied ejusdem generis to read the words "proceedings", "order" and "in any court of law" as covering proceedings of a civil nature similar to suits, not criminal complaints. It also treated the interpretation of the analogous bar in Section 446(1) of the Companies Act, 1956 as supporting that construction. As the moratorium order did not expressly prohibit continuation of the criminal matter, the criminal complaint and connected revision could proceed and the order keeping the revision in abeyance was unsustainable.

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Issues: Whether the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 applies to a criminal proceeding under Section 138 of the Negotiable Instruments Act, 1881 and the connected criminal revision.

Analysis: The expression prohibiting institution or continuation of suits or proceedings in Section 14 was construed by applying the principle of ejusdem generis with the preceding word "suits". On that interpretation, the words "proceedings", "order" and "in any court of law" were held to cover proceedings of a like civil nature and not criminal prosecution. The reasoning adopted while construing a similar bar under Section 446(1) of the Companies Act, 1956 was found applicable by analogy. The order of moratorium passed in the insolvency proceeding was also held not to expressly bar continuation of the criminal matter.

Conclusion: Section 14 does not bar prosecution of a criminal complaint under Section 138 of the Negotiable Instruments Act, 1881 or the connected criminal revision, and the impugned order keeping the revision in abeyance was unsustainable.

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