Specific averments are essential for vicarious liability under cheque dishonour law; insolvency moratorium does not shield natural persons automatically.

Section 14 moratorium under the Insolvency and Bankruptcy Code operates against the corporate debtor and does not automatically bar prosecution of natural persons under Sections 138 and 141 of the Negotiable Instruments Act. However, vicarious liability for directors or officers cannot be fastened without clear, specific averments showing each applicant's role, knowledge, and responsibility in relation to the dishonoured cheques. Where the complaint contains only general assertions and the applicants are not signatories, continuation of the prosecution amounts to abuse of process. On the pleadings disclosed, the criminal complaint and resultant process were set aside for want of the requisite Section 141 averments.

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Issues: (i) Whether the moratorium under the Insolvency and Bankruptcy Code, 2016 barred the prosecution of natural persons in proceedings under Sections 138 and 141 of the Negotiable Instruments Act, 1881. (ii) Whether the complaint contained the necessary specific averments to fasten liability on the applicants as persons in charge of and responsible for the conduct of the company's business.

Issue (i): Whether the moratorium under the Insolvency and Bankruptcy Code, 2016 barred the prosecution of natural persons in proceedings under Sections 138 and 141 of the Negotiable Instruments Act, 1881.

Analysis: The moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 operates against the corporate debtor. It does not, by itself, exonerate natural persons who are sought to be prosecuted under the penal provisions of the Negotiable Instruments Act. The earlier insolvency proceedings therefore did not furnish a complete shield to the applicants merely because they were connected with the company.

Conclusion: The objection based on Section 14 of the Insolvency and Bankruptcy Code, 2016 failed.

Issue (ii): Whether the complaint contained the necessary specific averments to fasten liability on the applicants as persons in charge of and responsible for the conduct of the company's business.

Analysis: The applicants were not signatories to the cheques. The complaint did not contain clear and specific pleadings showing the individual role, knowledge, or responsibility of each applicant in relation to the issuance of the dishonoured cheques. Mere general assertions that they were liable for the acts of the company were insufficient to attract vicarious liability under Section 141 of the Negotiable Instruments Act, 1881. In these circumstances, continuation of the prosecution would amount to abuse of process and justified exercise of inherent jurisdiction.

Conclusion: The complaint was liable to be quashed for want of the requisite averments under Section 141 of the Negotiable Instruments Act, 1881.

Final Conclusion: The criminal complaint and the resultant process were set aside, as the proceedings could not be sustained against the applicants on the pleadings disclosed.

Ratio Decidendi: In a prosecution under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881, vicarious liability of directors or officers cannot be assumed without specific averments showing their role and responsibility, and the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 does not automatically bar prosecution of natural persons.

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