TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 1160
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....sion preferred by the applicants herein in leading application against the summoning order dated 21.07.2023 has been dismissed. 2. A joint statement has been made by the learned counsel for the parties that they do not propose to file any additional affidavit and the application be decided on the basis of the documents available on record. With the consent of the parties, the applications are being decided at the fresh stage. 3. Broadly, the facts are that the opposite party no. 2, Rohit Agarwal, claims himself to be a partner of a firm by the name of M/s. Metal Products which is engaged in manufacturing and supplying of Bare/Insulated Copper and Aluminium Wire. According to the opposite party no. 2, it had supplied bare/insulated copper and Aluminium wire to M/s. Kotsons Pvt. Ltd. which is a company registered under the Companies Act. Allegation is that for the discharge of liability which had accrued on account of purchase of the bare/aluminium wire, four cheques bearing no. 598081, 598082, 598083 and 598084 dated 01.12.2022 of Rs. 50,00,000/- each was drawn on behalf of the company Kotsons Pvt. Ltd. by one of the Director, Siddharth Jain who is the applicant in the connected a....
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....ed 21.7.2023. 3. Contention of learned counsel for the applicants is that the cheque in question was issued in favour of the partnership firm M/s Metal Products, but the impugned complaint has been filed by one of its partners without any authorization on behalf of the firm. It is further submitted by the Senior Counsel that the position of partnership firm is different from the proprietorship concerned as on bouncing of the cheque, issued in favour of the proprietorship concerned, its proprietor can file a complaint, but in the case of partnership firm, a complaint can be filed under Section 138 N.I. Act by the partnership firm through its partner and the partner can also file a complaint under Section 138 N.I. Act on bouncing of the cheque issued in favour of the partnership firm but there should be authorization on behalf of the firm. It is also submitted that the cheque in question was issued in favour of the firm, therefore, the firm is payee and the partner cannot be treated as the payee and he can be treated as the holder in due course only after authorization on behalf of the firm. In support of his contention, learned Senior Counsel has relied upon the judgement of the A....
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....tutory demand notice and to file complaint. 9. In a nutshell, it is submitted that the opposite party no. 2- complainant only being a partner of a partnership firm had no authority under law to have either issued demand notice or to have lodged complaint under Section 138 of the NI Act. Secondly, it has been submitted that even assuming without admitting the opposite party no. 2 as a partner of a partnership firm could have filed a complaint but there was no authorization of the partnership firm so as to authorize him to lodge proceedings under Section 138 of the NI Act. Thirdly, the bar contained under Sections 19 and 22 of the Indian Partnership Act, 1932 would come in the way of lodging criminal proceedings by a partner particularly when there was no implied authority so enjoined with the complainant as a partner to lodge proceedings. Fourthly, the bar of Section 14 of the Insolvency and Bankruptcy Code, 2016 would apply particularly when the company of which the applicants were the Directors was under monetarium regime vide order dated 09.06.2023 of National Company Law Tribunal, New Delhi (III) in the proceedings in IB-761(ND/2022) State Bank of India Vs. M/s. Kotsons Pvt. Lt....
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....O.P. No. 13147 of 2015 Madras High Court Rangabashyam Vs. V. Rajeshwari, (13) (2024) 6 SCC 143, Prem Raj Vs. Poonamma Menon and another, (14) Alchemist Asset Reconstruction Company Ltd. Vs. M/s. Hotel Gaudavan Pvt. Ltd.: (2018) 16 SCC 94. Argument of the counsel for the opposite party no. 2-complainant 12. Countering the submissions so made on behalf of the learned counsel for the applicants Ms. Shreya Gupta, learned counsel who appears for the opposite party no. 2-complainant has submitted that the order dated 21.07.2023 summoning the applicants under Section 138 of the NI Act as well as the order rejecting the revision does not suffer from any illegality and no interference is called for. Submission is that the complainant/opposite party had the competence and the authority to lodge criminal proceedings as he was one of the partners of the partnership firm and he being the agent of the firm had the right to lodge complaint. It is also submitted that even if it is assumed though not admitted that the complainant/opposite party no. 2 being a partner had no authorization in his favour then the complaint cannot be rejected outrightly as opportunity to produce authorization can be g....
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....olly George J.T. 1999 (10) SC 381, (10) National Small Industries Corporation Ltd. Vs. State (NCT of Delhi) & etc. (2008) 16 S.C.R. 83, (11) Ashutosh Ashok Parasrampuriya and another Vs. Gharrkul Industries Pvt. Ltd. & others AIR 2021 SC 4898. Statutory provisions: Partnership Act, 1932 2. Definitions.-In this Act, unless there is anything repugnant in the subject or context,- (a) an"act of a firm" means any act or omission by all the partners, or by any partner or agent of the firm which gives rise to a right enforceable by or against the firm; 4. Definition of "partnership", "partner", "firm" and "firm name"-"Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Persons who have entered into partnership with one another are called individually "partners" and collectively "a firm", and the name under which their business is carried on is called the "firm name". 11. Determination of rights and duties of partners by contract between the partners Agreements in restraint of trade.-(1) Subject to the provisions of this Act, the mutual rights and duties of the partners of a firm may ....
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....or executed by a partner or other person on behalf of the firm shall be done or executed in the firm name, or in any other manner expressing or implying an intention to bind the firm." Negotiable Instrument Act, 1881 "7. "Drawer" "Drawee".-The maker of a bill of exchange or cheque is called the "drawer"; the person thereby directed to pay is called the "drawee". "Drawee in case of need".- When in the Bill or in any indorsement thereon the name of any person is given in addition to the drawee to be resorted to in case of need such person is called a "drawee in case of need." "Acceptor".-After the drawee of a bill has signed his assent upon the bill, or, if there are more parts thereof than one, upon one of such parts, and delivered the same, or given notice of such signing to the holder or to some person on his behalf, he is called the "acceptor". "Acceptor for honour".- When a bill of exchange has been noted or protested for non-acceptance acceptance or for better security,] and any person accepts it supra protest for honour of the drawer or of any one of the indorsers, such person is called an "acceptor for honour''. "Payee".-The person named in the instrument, to whom....
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....he holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.-For the purposes of this section, "debt of other liability" means a legally enforceable debt or other liability. 141. Offences by companies.-(1) If the person committing an offence under section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence: Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the case may be, he shall not be liable for prosecu....
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....ains the account." Analysis : 13. I have heard learned counsel for the parties and perused the record carefully. 14. Before embarking an inquiry upon the tenability of the arguments so made across the bar it would be apposite to discuss the import and impact of the various provisions of the Indian Partnership Act, 1932 and the law on the said subject. 15. To begin with Section 18 provides that the partner is the agent of the firm for the purposes of business of the firm. 16. Section 2(a) defines an act of the firm which means any act or omission by all the partners, or by any partner or agent of the firm which gives rise to a right enforceable by or against the firm. Section 19 further provides for implied authority of a partner as the agent of a firm according to which subject to the provisions under Section 22 of the Act, the act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm, binds the firm. The authority of a partner to bind the firm conferred by the said section is called an implied authority. Various acts have been mentioned in sub- section (2) of Section 19, that in absence of any usage or custom of trade to the co....
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....as defined in Section 4 of the Indian Partnership Act, 1932, is the relation between persons who have agreed to share the profits of a business carried on by all or any of them for the benefit of all. The section further makes it clear that a firm or partnership is not a legal entity separate and distinct from the partners. Firm is only a compendious description of the individuals who compose the firm. The crucial words in the definition of "partnership" are those that have been underlined. They hold the key to the question posed above. They show that the business is carried on by all or any of the partners. 21. In N Khadervali Saheb and another Vs. N. Gudu Sahib and others (2003) 3 Supreme Court Cases 229, it was observed as under.- "A partnership firm is not an independent legal entity, the partners are the real owners of the assets of the partnership firm. Actually the firm name is only a compendious name given to the partnership for sake of convenience. The assets of the partnership belong to and are owned by the partners of the firm. So long as partnership continues each partner is interested in all the assets of the partnership firm as each partner is owner of the assets t....
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....rity is concerned, it is to be proved. In some cases also, option is available with the partnership firm through other partners to ratify the action or conduct of the partner who had done an act in order to bind the firm. What is more important is the employing the word "in the firm's name or in any other manner expressing or implying an intention to bind the firm", which means that a partner can do an act in the name of firm or in any manner expressing or implying an intention to bind the firm. What is, thus, understandable is that a partner may do an act in his own name as a partner but thereafter, if there is an implied authority or even when the said act is ratified then it becomes a legal act and not an act which is prohibited under the partnership act. 26. In Sanganer Dal and Flour Mill Vs. F.C.I. and others (1992) 1 SCC 145, a question fell for consideration whether a contract entered into by one of the partner would be valid and binding on the partners where there was a clause for referring the dispute for arbitration, Hon'ble Apex Court observed as under.- "3. The High Court found that Satya Narain has implied power to conduct business on behalf of the partnership firm ....
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....osite party no. 2 being a partner has the full authority to lodge criminal proceedings. It is not in dispute that the opposite party no. 2-complainant is a partner of the partnership firm, Metal Products. Section 7 defines drawer and drawee according to which the maker of bill of exchange or a cheque is called the drawer and the person thereby directed to pay is called the drawee. So much so payee means the person named in the instrument to whom or whose order, the money is by the instrument directed to be paid. Section 8 defines holder, as the holder of a promissory note, bill of exchange or cheque which means any person entitled in his own name to the possession thereof and to receive or recover the amount due therefrom from the parties thereto. According to Section 9 of the NI Act, the holder in due course, possessor means a person who for consideration becomes the purchaser of promissory note, bill of exchange of cheque if payable to bearer. 29. Sub-clause (b) and (c) of the proviso to Section 138 of the NI Act only empowers to payee or the holder in due course of the cheque to make a demand for the payment of the amount of money by giving a notice. Similarly, Section 142 of t....
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....on of applicant be accepted that the said Raj Rajeshwari Enterprises is a partnership and not a proprietorship firm, it will not help the applicant herein as even the partnership firm does not have a different legal identity and is not a juristic person. Therefore, a partner of the firm also becomes the holder in due course of the cheque within the meaning of Section 142 (1) of the N.I. Act. Thus, the complaint even on behalf of the partner of a firm in his own name is maintainable. Otherwise, also in the instant case, the applicant does not dispute that the cheque was issued in the name of the said Raj Rajeshwari Enterprises and the said cheque was dishonoured and demand notice was issued by the opposite party no.2, he has failed to comply with the said notice. Therefore, in view of the presumption under Section 139 of the N.I. Act and as per the law laid down by the Apex Court, this Court does not find any good ground to interfere in the instant case in exercise of jurisdiction under Section 482 Cr.P.C." 34. So far as the reliance placed upon by learned Senior Counsel for the applicants upon the decision of the Gujarat High Court in Porbandar Commercial Cooperative Bank Ltd. (su....
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....39. So far as the other aspect of the matter that there was no authorization available with the complainant and the complaint ought to have been rejected at the stage of summoning, the said question dependents upon the nature of the defect whether it is curable or not that is curable or not. In M/s Samrat Shipping Company Pvt. Ltd. Vs. Dolly George J.T. 1999 (10) SC 381, the Hon'ble Apex Court wherein it was held as held as under.- "2. The appellant-company has filed a complaint before a Magistrate Court for offence under Section 138 of the Negotiable Instruments Act. The Magistrate dismissed the complaint on the ground that there was no resolution of the Board of Directors of the petitioner-Company authorising the person who represented the Company before the Magistrate Court. Though appellant preferred a revision before the Sessions Court that became futile and he moved the High Court invoking Section 482 of the CrPC. Learned Single Judge dismissed the petition of the appellant in spite of the fact that appellant produced a copy of the resolution for showing that the Company had authorised the particular individual to present the complaint before the Court. The High Court w....
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....ion by filing a complaint of facts constituting an offence before a Magistrate entitled to take cognizance. It has been held that no court can decline to take cognizance on the sole ground that the complainant was not competent to file the complaint. It has been held that if any special statute prescribes offences and makes any special provision for taking cognizance of such offences under the statute, then the complainant requesting the Magistrate to take cognizance of the offence must satisfy the eligibility criterion prescribed by the statute. In the present case, the only eligibility criteria prescribed by Section 142 is that the complaint must be by the payee or the holder in due course. This criteria is satisfied as the complaint is in the name and on behalf of the appellant Company. 12. In the case of Associated Cement Co. Ltd. v. Keshvanand [(1998) 1 SCC 687 : 1998 SCC (Cri) 475] it has been held by this Court that the complainant has to be a corporeal person who is capable of making a physical appearance in the court. It has been held that if a complaint is made in the name of an incorporeal person (like a company or corporation) it is necessary that a natural person rep....
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....no authority the Company can at any stage rectify that defect by sending a competent person. The aforesaid judgment was also taken note of in a subsequent judgment of this Court in M.M.T.C. Ltd. & Anr. v. Medchl Chemicals and Pharma (P) Ltd. & Anr. 20. We find that the judicial precedents cited aforesaid have been breached by the Courts below. The High Court also embarked on a discussion as to the vagueness of the identity of the complainant and its relation with the legality of a loan which may be granted by the Company, something that was not required to be gone into. 21. If we look at the format of the complaint which we have extracted aforesaid, it is quite apparent that the Managing Director has filed the complaint on behalf of the Company. There could be a format where the Company's name is described first, suing through the Managing Director but there cannot be a fundamental defect merely because the name of the Managing Director is stated first followed by the post held in the Company. 22. It is also relevant to note that a copy of the Board Resolution was filed along with the complaint. An affidavit had been brought on record in the trial court by the Company, affirm....
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....mitted that the complainant is partnership firm. The complainant is one of the partners of the firm has permitted to file complaint against the accused under Sections 138 and 142 of the Act. The Trial Court is therefore not justified in acquitting the accused on the sole ground that the complainant was not authorised by the firm, who filed complaint under Section 138 of the Act. 24. Even during trial, the accused had not produced any kind of evidence to prove that the firm is not intending to prosecute him for the offence under Section 138 of the Act and that the firm has no intention to prosecute him. In that view of the matter, the complainant representing the firm is competent to lodge the complaint on behalf of the firm for recovery of the amount due to the firm from the accused by invoking the provisions of Section 138 of the Act." 44. Applying the principles of law as laid down in the above noted decisions in the facts of the case, an irresistible conclusion stands drawn that even if there was no authorization with the complainant then to the complaint cannot be rejected at the threshold as opportunity is to be accorded to produce the authorization if it is required. Once ....
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....;्रतिदिन के कार्यों के लिए उत्तरदायी व जिम्मेदार हैं।" 46. A birds eye view to para 1 of the complaint, would reveal that averments have been made that the applicants herein are the Directors of the company and they are accountable and responsible for the day to day affairs of the company including financial and business dealings. 47. Learned counsel for the applicants submits that the aforesaid recitals are not sufficient so as to make the applicants responsible for the commission of offence particularly when the averments are not in conformity with the requirements of Section 141. Reliance has been placed upon the judgment in Ashok Shewakramani (supra), wherein following was observed.- "5. We have carefully perused the complaint and the affidavit in support of the complaint. In paragraph 4 of the complaint, it is stated that the accused No.1 is the Company on whose account the two cheques were issued and accused No.2....
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....ements of sub-section 1 of Section 141 N.I. Act was made by the second respondent. The most important averment which is required by sub-Section (1) of Section 141 of the NI Act is that the directors were in charge of, and were responsible for the conduct of the company. The appellants are neither the signatories to the cheques nor are whole- time directors. The decision in the case of "S.P. Mani and Mohan Diary Versus Dr. Snehalatha Elangovan"1 will have no application as in the present case, the statutory notice was admittedly not served to the accused. Obviously, the High Court has not adverted to aforesaid two glaring deficiencies in the complaint. 17. The averments made in the complaints which are the subject matter of these three appeals are identical. We are referring to the averments made in one of the three complaints (in Complaint Case No.74 of 2011) in paragraph 1 : "1) It is submitted that the complainant is the proprietor of Sri Chakra Cotton Traders, doing business in Cotton, resident of bearing Door Number 3/917-I, Sri Chackra Nilayam, Y.M.R. Colony, Proddatur Town-516360, Kadapa Distrcit, A.P. The accused No.1 is the Private Limited concerned Company and regis....
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....the above cheque without balance in the account and they are also fully aware about the cheque will be dishonored. Indeed, the said recitals are thoroughly insufficient and does not conform to Section 141 and further the appellant in the said case was neither the signatory to the cheque nor the wholetime Director. 49. Hon'ble Apex Court in para 17 of the said judgment had also taken note of the fact that against the accused this much was asserted in the complaint that the accused Nos. 2 to 7 were Managing the company and busy with the day to day affairs of the company and all are managing the company and also the charge of the company and are jointly and severely liable for the acts. This requirement is also insufficient. 50. In the present case, there are specific recitals against the applicants which is as per requirement under Section 141 of the NI Act. 51. The issue regarding the mandatory requirement under Section 141 of the NI Act came up for consideration in Ashutosh Ashok Parasrampuriya (supra), wherein the following was observed as under.- "25. We are concerned in this case with Directors who are not signatories to the cheques. So far as Directors who are not the ....
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....y the High Court in dismissing the petition filed under Section 482 Cr.P.C. under the impugned judgment." 29. The submission of learned counsel for the appellants that they are the non-executive Directors in the light of the documentary evidence placed on record by Form No. 32 issued by the Registrar of Companies, both the appellants are shown to be the Directors of the Company, still open for the appellants to justify during course of the trial." 52. Importantly, what is required at this stage is a fact that before arraigning the accused there has to be a specific recital of the fact that the accused were incharge and were responsible for the conduct of the business of the company as well as the company at the time when the offence is said to have been committed. Here, in the present case, the said requirement stands fulfilled. 53. Reliance so placed upon the decision in A.K. Ravi Nedungadi (supra) is concerned, the same is of no aid and assistance to the applicants particularly when the applicants therein are/were part time non-executive Directors of the company. However, in the present case, there is a specific averment in conformity with Section 141 of the NI Act and the ap....
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....in Anil Hada [(2000) 1 SCC 1 : 2001 SCC (Cri) 174] has to be treated as not laying down the correct law as far as it states that the Director or any other officer can be prosecuted without impleadment of the company. Needless to emphasise, the matter would stand on a different footing where there is some legal impediment and the doctrine of lex non cogit ad impossibilia gets attracted." xxx xxx xxx "56. We have referred to the aforesaid passages only to highlight that there has to be strict observance of the provisions regard being had to the legislative intendment because it deals with penal provisions and a penalty is not to be imposed affecting the rights of persons, whether juristic entities or individuals, unless they are arrayed as accused. It is to be kept in mind that the power of punishment is vested in the legislature and that is absolute in Section 141 of the Act which clearly speaks of commission of offence by the company. The learned counsel for the respondents have vehemently urged that the use of the term "as well as" in the Section is of immense significance and, in its tentacle, it brings in the company as well as the Director and/or other officers who are resp....
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.... then become applicable. The legal impediment contained in Section 14 of the IBC would make it impossible for such proceeding to continue or be instituted against the corporate debtor. Thus, for the period of moratorium, since no Section 138/141 proceeding can continue or be initiated against the corporate debtor because of a statutory bar, such proceedings can be initiated or continued against the persons mentioned in Section 141(1) and (2) of the Negotiable Instruments Act. This being the case, it is clear that the moratorium provision contained in Section 14 of the IBC would apply only to the corporate debtor, the natural persons mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of the Negotiable Instruments Act." 56. In Ajay Kumar Radheshyam Goenka (supra), the following was observed:- 70. Thus, I am of the view that by operation of the provisions of IBC, the criminal prosecution initiated against the natural persons under Section 138 read with Section 141 of the NI Act read with Section 200 Cr.P.C. would not stand terminated. 71. In JIK Industries Ltd. v. Amarlal Vs. Jumani, this Court held that the sanction of a scheme under Section 391 of t....
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....pediment as the doctrine of lex non cogit ad impossibilia gets attracted. It was specifically observed that the decision in Anil Hada is overruled with the qualifier as stated in para 51. Considering the same, the ratio of the decision of this Court in Ajit Balse upon which strong reliance is placed on behalf of the appellate is of no avail. 74. What follows from the aforesaid is that for difficulty in prosecuting the corporate debtor under Section 138 of the NI Act after the approval of the resolution plan under IBC, we need not let the natural persons i.e. the signatories to the cheques/Directors of the corporate debtor escape prosecution. How can one allow the natural persons to escape liability on such specious plea? In such a situation the Latin maxim lex non cogit ad impossibilia is attracted which means law does not compel a man to do which he cannot possible person. Broom's Legal Maxims contains several illustrative cases in support of the maxim. This maxim has been referred to with approval by this Court in State of Rajasthan v. Shamsher Singh. 75. Thus, where the proceedings under Section 138 of the NI Act had already commenced and during the pendency the plan is ap....
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....riminal court not for recovery of the legally enforceable debt, but for taking penal action under Section 138 of the NI Act for the offence already committed by the accused by not making the payment of the cheque amount despite the receipt of the statutory notice. The only question before the criminal court is whether the cheque issued by the accused towards the discharge of his liability was dishonoured and despite the service of demand notice, whether he had not paid the amount. There is no bar contained in any of the provisions of IBC, and the NI Act from approaching the criminal court to seek penal action under Section 138 of the NI Act." 57. Yet in Rakesh Bhanot (supra), the issue with regard to inter- play between Section 14 & 96 of the IBC and Section 138 of the NI Act came to be considered and it was held as under.- "10.1. From the above provisions, it is clear that the term "Corporate Person" includes a company as defined under Section 2(20) of the Companies Act, 2013, and a Limited Liability Partnership. However, there is a subtle difference in the protection available to the Directors and the Partners. In case of a partnership firm, the interim moratorium protects not....
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....o the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.-For the purposes of this section, "debt of other liability" means a legally enforceable debt or other liability. 141. Offences by companies.- (1) If the person committing an offence under Section 138 is a company, every person who, at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any person liable to punishment if he proves that the offence was committed without his knowledge, or that he had exercised all due diligence to prevent the commission of such offence: [Provided further that where a person is nominated as a Director of a company by virtue of his holding any office or employment in the Central Government or State Government or a financial corporation owned or controlled by the Central Government or the State Government, as the cas....
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....l and a report is submitted as contemplated under Section 99 recommending either the approval or rejection of the application. The interim moratorium which commences on the presentation of the application will expire on the admission of the application by an order of the adjudicating authority under Section 100. Upon admission, the moratorium under Section 101 comes into operation. The interim moratorium under Section 96 and the moratorium under Section 101 IBC are designed to offer a breathing space to the corporate debtor, allowing them to reorganize their financial affairs without the immediate threat of creditor actions. However, this moratorium is not intended to shield individuals from personal criminal liabilities arising from their actions outside the scope of corporate debt restructuring. The respective appellants / petitioners, having filed insolvency applications as personal guarantors under Section 94 IBC, cannot extend this protection to avoid prosecution under Section 138 of the N.I. Act, 1881. Upon filing of the application under section 94 IPC, a moratorium comes into effect, designed to protect the debtors from any legal actions concerning their debts. Specifically....
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....the resolution professional under Section 100 and the moratorium under Section 101, which reprises Section 96, will not bar the continual of any criminal action. The cause of action for prosecution under Section 138 of NI Act commences on the dishonor of the cheque and the failure to pay the amount unpaid because of dishonour, within 15 days from the date of receipt of notice demanding payment. It is pertinent to mention here that the prosecution can be only with respect to the amount unpaid by dishonour of the cheque irrespective of the actual debt. The distinction between the right to sue based on a dishonoured cheque by initiating a civil suit and launching a prosecution under Section 138 of the Negotiable Instruments Act is significant. In case of former, the interim moratorium can operate, but not in case of later. 17. For the foregoing discussion, we are of the opinion that the object of moratorium or for that purpose, the provision enabling the debtor to approach the Tribunal under Section 94 is not to stall the criminal prosecution, but to only postpone any civil actions to recover any debt. The deterrent effect of Section 138 is critical to maintain the trust in the use ....
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....ting from Section 138 of NI Act wherein challenge has been raised to the summoning order came up for consideration before the Hon'ble Supreme Court in Rathish Babu Unnikrishnan (supra), wherein the following was observed as under.- 12. At any rate, whenever facts are disputed the truth should be allowed to emerge by weighing the evidence. On this aspect, we may benefit by referring to the ratio in Rajeshbhai Muljibhai Patel vs. State of Gujarat, (2020) 3 SCC 794, where the following pertinent opinion was given by Justice R. Banumathi: - "22. .............. When disputed questions of facts are involved which need to be adjudicated after the parties adduce evidence, the complaint under Section 138 of the NI Act ought not to have been quashed by the High Court by taking recourse to Section 482 CrPC. Though, the Court has the power to quash the criminal complaint filed under Section 138 of the NI Act on the legal issues like limitation, etc. criminal complaint filed under Section 138 of the NI Act against Yogeshbhai ought not to have been quashed merely on the ground that there are inter se disputes between Appellant 3 and Respondent 2. Without keeping in view the statutory presump....