M/S.Saalim Shoes (P) Ltd vs M/S.United Enterprises
2022 Latest Caselaw 11985 Mad

Citation : 2022 Latest Caselaw 11985 Mad
Judgement Date : 6 July, 2022

Madras High Court

M/S.Saalim Shoes (P) Ltd vs M/S.United Enterprises on 6 July, 2022

                                                                                Crl.O.P.No.15456 of 2022


                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                               DATED : 06.07.2022

                                                     CORAM:

                              THE HONOURABLE MR.JUSTICE N.SATHISH KUMAR

                                             Crl.O.P.No.15456 of 2022
                                        and Crl.M.P.Nos.8699 & 8702 of 2022

                  1.M/s.Saalim Shoes (P) Ltd
                  Represented by its Managing Director
                  Mr.Arcot Mohammed Saalim
                  No.1-A, Regency Apartment, No.5, 1st Lane
                  Nungambakkam High Road, Chennai – 600 034
                  Factory at No.63/1, 63/2
                  Ammor Road, Manthangal,
                  Ranipet, Ranipet District- 632 403,
                  Tamil Nadu.
                  2.Arcot Mohammed Saalim
                  3.Arcot Mohammed Aslam
                  4.Arcot Mohammed Ashfaque                                      ... Petitioners

                                                      Versus
                  M/s.United Enterprises,
                  Represented by its,
                  Managing Partner Mr.N.Srinivasan,
                  No.15/3, Bharathi Nagar, Ranipet
                  Ranipet District – 632 403                                   ... Respondent

                  PRAYER: Criminal Original Petition is filed under Section 482 of Cr.P.C.,
                  pleased to call for the entire records in pursuant to the S.T.C.No.383 of 2020
                  pending on the file of Judicial Magistrate Court, Ranipet District and quash the
                  same.

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                                                                                    Crl.O.P.No.15456 of 2022


                                        For Petitioner            : Mr.T.R.Prabakaran

                                                       ORDER

This Criminal Original Petition has been filed seeking to quash the

Charge Sheet in S.T.C.No.383 of 2020 pending on the file of the learned

Judicial Magistrate Court, Ranipet District, for the offence under Section 138

read with Section 142 of Negotiable Instrument Act, 1881.

2. The present petition has been filed to quash the cheque complaint in

S.T.C.No.383 of 2020 mainly on the ground that the management of the first

petitioner company was taken over by the Corporate Debtor appointed by

National Company Law Tribunal, Division Bench – I, Chennai and there was a

moratorium under Section 14(1) of the Insolvency and Bankruptcy Code,

2016. Therefore, it is submitted that no complaint is maintainable as against

the petitioner company and its Directors.

3. At the outset, I am unable to persuade myself to the submission of the

learned counsel. The Hon'ble Apex Court in the case of P. Mohanraj and

Others vs. Shah Brothers Ispat Pvt. Ltd., reported in [2021 SCC Online SC

152], after dealing with various judgements of the Apex Court in paragraph

103 held as follows:

https://www.mhc.tn.gov.in/judis 2/ 6 Crl.O.P.No.15456 of 2022

“103. Since the Corporate debtor would be covered by the moratorium provision contained in Section 14 of the IBC, by which continuation of Section 138/141 proceedings against the corporate debtor and initiation of Section 138/141 proceedings against the said debtor during the corporate insolvency resolution process are interdicted, what is stated in paragraphs 51 and 59 in Aneeta Hada (supra) would 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 Instrument 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.''

As the moratorium applies to the Corporate Debtor, under sections 138

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and 141 of the Negotiable Instruments Act, no proceedings can be continued or

be initiated 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 Instrument 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 continue to be statutorily

liable under Chapter XVII of the Negotiable Instruments Act.

4. In such a view of the matter, the petitioners 2 to 4 being the directors

of the first petitioner company, have to be prosecuted as per the above

judgment.