TaxTMI 
TaxTMI 
2026 (9) TMI 97
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....ate debtor. The petitions are, accordingly, being decided by this common order. 4. The Petitioner has invoked Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, corresponding to Section 482 of the Code of Criminal Procedure, 1973, seeking quashing of: i. The summoning order dated 26.04.2019 passed in C.C. No. 4275/2019, challenged in CRL.M.C. 1549/2026; ii. The summoning order dated 26.07.2019 passed in C.C. No. 7492/2019, challenged in CRL.M.C. 1550/2026; and iii. The summoning order dated 11.09.2019 passed in C.C. No. 9180/2019, challenged in CRL.M.C. 1589/2026. FACTUAL MATRIX 5. The Respondent/Complainant had booked a residential unit in a project being developed by M/s Unnati Fortune Holdings Ltd. (hereinafter referred to as the 'Company'). On account of the delay in completion of the project, the parties entered into a Memorandum of Settlement dated ('MOS') dated 07.12.2018. 6. Under the said MOS, the amount payable to the Respondent was quantified at Rs. 2,60,00,000/-. A sum of Rs. 70,00,000/- was recorded as having already been paid. The balance amount was agreed to be discharged in the manner set out in the MOS, including thr....
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.... and the summoning orders deserve to be quashed. 12. Per contra, learned counsel for the Respondent submits that the moratorium under Section 14 of the IBC operates only in favour of the corporate debtor. It does not extend to Directors, signatories or other natural persons covered by Section 141 of the NI Act. Reliance is placed upon P. Mohanraj v. Shah Brothers Ispat (P) Ltd., MANU/SC/0132/2021 and Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation of India Ltd., MANU/SC/0244/2023. 13. Learned counsel for the Respondent submits that the Petitioner obtained the order dated 23.04.2026 passed by this Court granting exemption from personal appearance by incorrectly representing that he was not a director when the cheques were drawn. Learned counsel refers to the MOS dated 07.12.2018 and the Petitioner's plea of defence recorded under Section 251 CrPC. She submits that the Petitioner admitted that the cheques belonged to the Company and bore his signatures. Furthermore, the Petitioner also admitted that the amount paid by the Respondent had not been refunded and that a liability of Rs. 1,30,00,000/- remained outstanding. FINDINGS AND ANALYSIS 14. This Court has h....
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....gnises that proceedings may be "initiated or continued" against the natural persons during the Corporate Insolvency Resolution Process ('CIRP'). 18. The same position was reiterated by another three Judge Bench in Ajay Kumar Radheyshyam Goenka (supra). The Supreme Court held that no provision of the IBC bars the continuation of criminal prosecution against the Directors and officials of the corporate debtor. It was further held that the personal penal liability of a director or signatory does not stand extinguished merely because the corporate debtor has undergone insolvency resolution. 19. The law has thereafter been restated in Rakesh Bhanot v. Gurdas Agro Pvt. Ltd., MANU/SC/0447/2025. Although the said case arose in the context of an interim moratorium under Section 96 of the IBC, the Supreme Court expressly compared the scope of Sections 14 and 96 and held: "10.1. ......That apart, the object of interim moratorium can be no different from that of the moratorium specified Under Section 14. It is also clear from Section 14 that the protection from legal action during the period of moratorium is not available to the surety or in other words, to a personal guarantor.....
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....se, although the cheques had been dishonoured before the declaration of the moratorium, the statutory demand notice was issued after the IRP had assumed control over the corporate debtor. The Supreme Court distinguished P. Mohanraj (supra) on the ground that the cause of action had arisen after the declaration of the moratorium and that the Director had ceased to exercise control over the accounts of the corporate debtor. In those facts, the complaint and the summoning order were quashed. 23. The decision in Vishnoo Mittal (supra) does not, however, lay down that every complaint against a Director or signatory is liable to be quashed merely because the statutory period under Section 138 of the NI Act expired after the declaration of the moratorium. The larger Bench declaration in P. Mohanraj (supra) that proceedings may be initiated or continued against natural persons covered by Sections 141(1) and 141(2) of the NI Act continues to hold the field. Further, in the subsequent decision in Rakesh Bhanot (supra), the Supreme Court reiterated that the statutory liability of Directors under the NI Act is personal and continues "irrespective of any moratorium applicable to the corporat....
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....t of the moratorium and the defences available to the Petitioner must be determined on the evidence led before the learned Trial Court. 29. Accordingly, this Court finds no ground to interfere with the summoning orders dated 26.04.2019, 26.07.2019 and 11.09.2019 insofar as they relate to the Petitioner. CRL.M.A. 22918/2026 in CRL.M.C. 1549/2026 CRL.M.A. 22917/2026 in CRL.M.C. 1550/2026 CRL.M.A. 22921/2026 in CRL.M.C. 1589/2026 30. Learned counsel for the Respondent asserts that the Petitioner obtained the order dated 23.04.2026 by representing that he was not a director when the subject cheques were drawn and had resigned before the dates mentioned on the cheques. The said order dated 23.04.2026 is reproduced herein below: "Since according to the petitioner, he was not the Director when the cheques were drawn and had already resigned prior to the date mentioned on the cheque, he would be exempted from personal appearance before the learned Trial Court till the disposal of the present petitions." 31. A perusal of the pleadings of the Petitioner makes it evident that they do not contain any such assertion. On the contrary, the petitions specifically state t....