TaxTMI 
TaxTMI 
2026 (7) TMI 1527
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....mited and another, pending before the Court of learned Judicial Magistrate First Class, Ludhiana, along with all consequential proceedings arising therefrom, including the summoning order dated 31.05.2016 (Annexure P-2), whereby the petitioners have been summoned to face trial under Section 138 of the Negotiable Instruments Act, 1881 (for short 'N. I. Act'). 2. Brief facts of the case relevant for the purpose of disposal of this petition are that the aforementioned complaint has been filed by the respondent-complainant M/s Can Bank Factors Limited alleging therein that it is a company engaged in providing trade finance facilities. The accused-company, M/s Supreme Tex Mart Limited, had availed a factoring credit facility of Rs. 5 crore fr....
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....utory demand notice dated 21.07.2015 upon the accused calling upon them to make payment of the cheque amounts within the prescribed period. Despite service of notice, the accused failed to liquidate the outstanding liability, thereby compelling the complainant to institute the present complaint under Section 138 read with Section 420 of the IPC against the company as well as its Directors/persons in-charge of its affairs. 4. After presentation of the complaint, preliminary evidence of the complainant was recorded and finding a prima facie case for commission of offence punishable under Section 138 of the N. I. Act against the accused, the Magistrate concerned the petitioners and co-accused to face trial for the alleged offence. 5. It ....
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....ioners became legally impermissible. The respondent itself is a member of the Committee of Creditors and its claim forms part of the insolvency proceedings. Therefore, allowing simultaneous prosecution under the Negotiable Instruments Act would amount to permitting parallel recovery proceedings in respect of the same debt, which is contrary to the scheme and object of the IBC. Section 238 of the IBC gives the provisions of the Code an overriding effect over all inconsistent laws. Since the IBC has an overriding effect, its provisions would prevail over the proceedings under Section 138 of the N. I. Act in case of any inconsistency. Moreso, the respondent has now itself invoked the provisions of the IBC against both the petitioners in respec....
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.... dishonour of the cheques and subsequent insolvency proceedings have no bearing on the criminal prosecution. The moratorium under Section 14 of the IBC is intended to protect the corporate debtor during the insolvency resolution process and does not extend to criminal proceedings against the Directors or signatories of the dishonoured cheques. The petitioners, being the persons in-charge of and responsible for the affairs of the company at the relevant time are independently liable for the offence committed by the company. The liquidation order merely divested the petitioners of the management of the company and did not absolve them of criminal liability for acts committed while they were managing its affairs. It is, therefore, urged that t....
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....he corporate debtor, the statutory liability of the natural persons covered under Section 141 of the N.I. Act continues unaffected and proceedings against such persons can validly continue. The said principle has subsequently been reaffirmed in Ajay Kumar Radheshyam Goenka v. Tourism Finance Corporation of India Limited, (2023) 10 SCC 545, wherein it has been held that discharge or resolution of the corporate debtor under the IBC does not absolve the Directors or persons in charge of the affairs of the company from their independent criminal liability under Sections 138 and 141 of the N.I. Act. The contention that after appointment of the Interim Resolution Professional and subsequently the Liquidator, the petitioners ceased to be in contro....