Orissa High Court
Syed Najam Ahmed vs State Of Odisha And Another .... Opp. ... on 13 October, 2025
Author: Chittaranjan Dash
Bench: Chittaranjan Dash
AFR IN THE HIGH COURT OF ORISSA AT CUTTACK
CRLMP No.837 of 2025
Syed Najam Ahmed .... Petitioner
Mr. Sidhartha Mishra, Advocate
-versus-
State of Odisha and another .... Opp. Parties
Mr. A. K. Apat, Addl. P. P.
For O.P. No.1
Mr. S. S. Padhy, Advocate
For O.P. No.2
CORAM:
THE HON'BLE MR. JUSTICE CHITTARANJAN DASH
Date of Judgment: 13.10.2025
Chittaranjan Dash, J.
1. By means of this application, the Petitioner seeks the
indulgence of this Court directing the learned JMFC (LR),
Bhubaneswar to issue summon to the Resolution Professional (RP)
to represent accused No.1 and to discharge the accused No.2 against
whom cognizance has been taken in 1.C.C. Case No.3236 of 2021
vide order dated 18.03.2025 rejecting his prayer in the petition
dated 23.12.2024 praying for discharge of the accused Nos.1, 2 & 3.
2. The background facts of the case are that M/s. Dewy
Developers Pvt. Ltd. (hereinafter referred to as the complainant)
filed a complaint before the learned JMFC (LR), Bhubaneswar
under Section 138 of the Negotiable Instruments Act, 1881 (in
short, "the N.I. Act"). In the said complaint, a prayer was made to
summon the present Petitioner, namely Zenith Mining Private Ltd.,
its Managing Director, Mr. Syed Najam Ahmed, and its agent,
Bhimsen Apat, and to direct recovery of Rs.1 crore from the said
accused persons in terms of the provisions of the N.I. Act, and
further to pay double the cheque amount as compensation.
3. The case of the complainant as emerges from the case
record is that, the Petitioner through its Managing Director, Mr.
Syed Najam Ahmed, keeping in view their cordial relationship,
persuaded to extend a friendly loan of Rs.1 crore to the Petitioner-
Company. The said amount was duly credited to the Petitioner's
bank account with an assurance that it would be repaid within one
year.
4. Since the Petitioner-Company failed to return the loan
amount, the complainant approached accused No.2 (the Managing
Director) who, for himself and on behalf of the accused-Company,
issued Cheque No.978062 dated 25.06.2021 for Rs.1 crore, drawn
on IndusInd Bank, in favour of the complainant. The complainant
presented the said cheque with its banker, i.e., Bank of India,
Chandrasekharpur Branch, Bhubaneswar, on the very same day
(25.06.2021), but it got dishonoured with the endorsement "refer to
drawer." The complainant was intimated as to the of the dishonour
by its banker on 29.06.2021.
5. Being so informed, the complainant requested the Petitioner
to make payment of the dishonoured cheque amount. On the request
of the Petitioner, the complainant waited and represented the
cheque through its banker, but once again it got dishonoured with
the same remark "refer to drawer." This intimation sent by the Bank
was received by the complainant on 09.07.2021. Thereafter, the
complainant issued a statutory notice to the Petitioner demanding
payment of the dishonoured cheque amount. As the Petitioner failed
to comply with the said demand, the complainant instituted the
complaint before the competent court U/s 138 of the Negotiable
instrument Act.
6. In response, the Petitioner filed an application before the
learned trial court seeking discharge from the prosecution on the
ground that the Petitioner-Company had already been declared
insolvent and a Resolution Professional had been appointed under
Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). It
was further stated that the learned NCLT, Cuttack had passed an
order on 08.01.2024 to that effect. According to the Petitioner, in
view of Section 32A of the IBC, 2016 and the law laid down by the
Hon'ble Supreme Court in Ajay Kumar Radheshyam Goenka vs.
Tourism Finance Corporation of India Ltd., reported in (2023) 10
SCC 545, the complainant ought to have approached the Resolution
Professional, who alone was competent to represent the accused-
Company.
7. The learned trial court, however, rejected the Petitioner's
prayer, holding that the prosecution under Section 138 of the N.I.
Act cannot be terminated as against the signatories/Directors of the
Company.
8. The learned counsel for the Petitioner, while reiterating the
aforesaid position of law during the course of hearing of the
application, relied upon the judgment of the Hon'ble Supreme
Court in Ajay Kumar Radheshyam Goenka (supra). In reply, the
learned counsel appearing on behalf of Opposite Party No.2 drew
the attention of this Court to the relevant paragraph of the said
judgment relied upon by the Petitioner, wherein, at Paragraph 17 of
the opinion of HMJ Sanjay Kishan Kaul (for himself and HMJ S.
Oka), it has been held as follows:-
"16. ... The only issue with which we are concerned
with is whether during the pendency of the proceedings
under the said Code which have been admitted, the
present proceedings under the NI Act can continue
simultaneously or not.
17. We have no hesitation in coming to the conclusion
that the scope of nature of proceedings under the two
Acts and quite different and would not intercede each
other. In fact, a bare reading of Section 14 of the IBC
would make it clear that the nature of proceedings
which have to be kept in abeyance do not include
criminal proceedings, which is the nature of
proceedings under Section 138 of the N.I. Act. We are
unable to appreciate the plea of the learned c counsel
for the appellant that because Section 138 of the NI Act
proceedings arise from a default in financial debt, the
proceedings under Section 138 should be taken as akin
to civil proceedings rather than criminal proceedings.
We cannot lose sight of the fact that Section 138 of the
NI Act are not recovery proceedings. They are penal in
character. A person may face imprisonment or fine or
both under Section 138 of the NI Act. It is not a
recovery of the amount d with interest as a debt
recovery proceedings would be. They are not akin to
suit proceedings."
9. Learned counsel for Opposite Party No.2 further invited the
attention of this Court to the relevant provision under Section 32A
of the Insolvency and Bankruptcy Code, 2016, as reiterated in the
aforesaid judgment while referring to P. Mohanraj and Ors. vs.
Shah Brothers Ispat Private Limited, reported in (2021) 6 SCC
258, read as follows in the concurring opinion of HMJ J. B.
Pardiwala:-
"P. Mohanraj (supra) has harmoniously construed
Section 32A with Section 14 of the IBC so as to apply to
Section 138 NI Act, proceedings. Section 32A(1) is very
crucial and hence, is quoted below:-
"32-A. Liability for prior offences, etc.(1)
Notwithstanding anything to the contrary contained in
this Code or any other law for the time being in force,
the liability of a corporate debtor for an offence
committed prior to the commencement of the
corporate insolvency resolution process shall cease,
and the corporate debtor shall not be prosecuted for
such an offence from the date the resolution plan has
been approved by the Adjudicating Authority under
Section 31. If the resolution plan results in the change
in the management or control of the corporate debtor
to a person who was not-
(a) a promoter or in the management or control of the
corporate debtor or a related party of such a person, or
(b) a person with regard to whom the relevant
investigating authority has, on the basis of material in
its possession, reason to believe that he had abetted or
conspired for the commission of the offence, and has
submitted or filed a report or a complaint to the
relevant statutory authority or court:
Provided that if a prosecution had been instituted
during the corporate insolvency resolution process
against such corporate debtor, it shall stand discharged
from the date of approval of the resolution plan subject
to requirements of this sub-section having been
fulfilled:
Provided further that every person who was a
"designated partner" as defined in clause (j) of Section
2 of the Limited Liability Partnership Act. 2008 (6 of
2009), or an "officer who is in default", as defined in
clause (60) of Section 2 of the Companies Act, 2013
(18 of 2013), or was in any manner in-charge of, or
responsible to the corporate debtor for the conduct of
its business or associated with the corporate debtor in
any manner and who was directly or indirectly
involved in the commission of such offence as per the
report submitted or complaint filed by the
investigating authority, shall continue to be liable to be
prosecuted and punished for such an offence
committed by the corporate debtor notwithstanding
that the corporate debtor's liability has ceased under
this sub-section."
10. Learned counsel for Opposite Party No.2 finally referred to
Paragraph 108 of the aforesaid judgment, in the concurring opinion
of HMJ J. B. Pardiwala, held as follows:-
"108. Thus, the upshot of all the decisions referred to
above is where the proceedings under Section 138 of the
NI Act had already commenced with the Magistrate
taking cognizance upon the complaint and during the
pendency, the company gets dissolved, the
signatories/Directors cannot escape from their penal
liability under Section 138 of the NI Act by citing its
dissolution. What is dissolved, is only the company, not
the personal penal liability of the accused covered under
Section 141 of the NI Act."
11. In view of the above position of law, there remains no
ambiguity with respect to the principle propounded by the Hon'ble
Supreme Court, namely, that the matter lying before the Resolution
Professional pursuant to the order dated 08.11.2024 of the NCLT
would in no manner affect the proceedings arising out of the
offence under Section 138 of the N.I. Act. Consequently, such
proceedings cannot be stalled vis-à-vis the Petitioner. Accordingly,
the impugned order passed by the learned court rejecting the prayer
of the Petitioner is found to be just and proper and warrants no
interference. Hence, the order.
12. In the result, the impugned order dated 18.03.2025 passed
by the learned JMFC (LR), Bhubaneswar in 1CC Case No.3236 of
2021 is hereby confirmed. Consequently, the CRLMP stands
dismissed being devoid of merit.
(Chittaranjan Dash)
Judge
AKPradhan
Signed by: ANANTA KUMAR PRADHAN
Location: HIGH COURT OF ORISSA
Date: 14-Oct-2025 16:47:33
