Court dismisses writ petition challenging police refusal during CIRP; acknowledges moratorium's limits on criminal proceedings

The court dismissed the writ petition challenging the police's refusal to act on an FIR during a Corporate Insolvency Resolution Process (CIRP). While acknowledging that a moratorium does not directly impact criminal proceedings, the court noted that the police had initiated action by serving notice and starting a case based on the FIR. However, due to the CIRP covering all company transactions, further police investigation was deferred until the CIRP concluded. The court found that the police had acted diligently within the constraints of the CIRP, leading to the dismissal of the petition.

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Issues:
Refusal of police to act on FIR due to CIRP - Application of moratorium on criminal proceedings - Police's actions in connection with the complaint - Allegation of insufficient police action - Dismissal of W.P. 21071(W) of 2019.

Analysis:
The writ petitioner's grievance was that the police refused to act on the FIR against the private respondents due to a Corporate Insolvency Resolution Process (CIRP) pending in connection with the company. The petitioner relied on a previous judgment stating that a moratorium does not prohibit criminal proceedings against the company or its directors. However, it was noted that while a moratorium may not directly affect criminal proceedings, it covers all aspects related to the company's loans and transactions under CIRP.

The police, in response, served a notice under section 41A of the Criminal Procedure Code on the respondent and initiated a police case based on the FIR. The accused admitted to procuring a loan from the petitioner company and being guarantors of the loan, stating that the loan amount was disbursed to their company's account. The police's affidavit-in-opposition indicated that they took sufficient steps regarding the complaint.

Despite the principle that a moratorium might not always stop criminal proceedings, the court observed that the police had acted diligently until the moratorium came into effect following the CIRP order. Any further police action would involve investigating the company's transactions under CIRP, making it necessary to wait for the CIRP to conclude before proceeding. Consequently, the court dismissed the writ petition, stating that the police had acted appropriately given the circumstances.

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