TaxTMI 
TaxTMI 
2023 (1) TMI 684
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....nexure-A complaint herein) by invoking power under Section 482 of the Code of Criminal Procedure (hereinafter referred as 'Cr.P.C.' for convenience). 2. Two questions require answer in this matter, are as under: (i) Is moratorium under Section 14 (1) of the Insolvency and Bankruptcy Code, 2016 would apply to non-corporate debtor/debtors dealt under Section 141 of the Negotiable Instruments Act ? (ii) How vicarious liability in criminal law, in terms of Section 141 of the Negotiable Instruments Act would emerge ? and what are the essentials to be stated in the complaint to fasten vicarious liability ? 3. Heard the learned counsel for the petitioners as well as the learned Public Prosecutor and the learned coun....
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.... v. M/s.Shah Brothers Ispat Pvt. Ltd.'s case (supra) the Apex Court held the legal position as under: "101: As far as the Directors/persons in management or control of the corporate debtor are concerned, a Sections138/141 proceeding against them cannot be initiated or continued without the corporate debtor-see [(2012) 5 SCC 661 : (2012) 3 SCC (Civ) 351 : (2012) 3 SCC (Cri) 241], Aneeta Hada v. Godfather Travels & Tours (P) Ltd. This is because Section 141 of the Negotiable Instruments Act speaks of persons in charge of, and responsible to the Company for the conduct of the business of the Company, as well as the Company. The Court, therefore, in Aneeta Hada held as under: (SCC pp.686-88, paras 51, 56 & 58-59) "51. We h....
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....lifier as stated in para.51. The decision in [(1987) 3 SCC 684 : 1987 SCC (Cri) 632], U.P. Pollution Control Board v. Modi Distillery has to be treated to be restricted to its own facts as has been explained by us hereinabove. 102. Since the corporate debtor would be covered by the moratorium provision contained in Section 14 IBC, by which continuation of Sections 138/141 proceedings against the corporate debtor and initiation of Sections 138/141 proceedings against the said debtor during the corporate insolvency resolution process are interdicted, what is stated in paras 51 and 59 in Aneeta Hada would then become applicable. The legal impediment contained in Section 14 IBC would make it impossible for such proceeding to continue o....
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....mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of the N.I.Act. Therefore, the complaint against the petitioners (accused Nos.1 to 7) cannot be quashed, simply on the ground of moratorium order as per Annexure-B. However, the prosecution against the 1st petitioner/1st accused being corporate debtor can be kept in abeyance till finalization of the moratorium proceedings, while allowing prosecution against petitioners 2 to 7, natural persons. 11. Secondly, it is argued by the learned counsel for the petitioners that, in order to prosecute the Directors of a company, there shall be narration in the complaint with regard to their specific roles in the affairs of the company and otherwise the prosecution under ....
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....e application of vicarious liability in terms of criminal law as provided under Section 141 of the N.I. Act is concerned, the same cannot be fastened because of the civil liability. Vicarious liability under sub- section (1) to S.141 of the NI Act can be pinned when the person is in overall control of the dayto- day business of the company or firm. Vicarious liability under sub-section (2) to S.141 of the NI Act can arise because of the director, manager, secretary, or other officer's personal conduct, functional or transactional role, notwithstanding that the person was not in overall control of the day-to-day business of the company when the offence was committed. Vicarious liability under sub-section (2) is attracted when the offence....