Final Order 11

Order Details: COPY OF ORDER
Pdf Text: IN THE COURT OF SH. VIRENDER KUMAR BANSAL,
PRINCIPAL DISTRICT AND SESSIONS JUDGE,
NEW DELHI DISTRICT, PATIALA HOUSE COURTS, NEW DELHI.
Crl. Rev. No. 746/2023
CNR No. DLND01-00-9831-2023
Cisco Systems Capital India Pvt. Ltd.
Vs
Trimax IT Infrastructure & Services Ltd & Ors.
06.06.2025.
Present: Sh. Rajesh Kumar, Ld. Counsel for the appellant.
1. The present revision has been preferred impugning the order dated
24.08.2023, whereby the Ld. Magistrate allowed the application of the
Respondent Nos. 2 & 3 and stayed the proceeding against them.
2. The brief facts giving rise to the present revision are that Cisco System
Capital India Private Limited (herein after referred as
Complainant/Petitioner) filed a complaint against Trimax IT
Infrastructure and Services Limited (herein after referred as Accused No.
1/Respondent No. 1), Mr. Chandra Prakash Madrecha (herein after
referred as Accused No. 2/Respondent No. 2) and Mr. Madrecha Surya
Prakash (herein after referred as Accused No. 3/Respondent No. 3)
alleging that Respondent No. 1 in discharge of their liability, issued the
cheque No. 272560 dated 19.11.2017, which when presented for
encashment returned unpaid due to the reasons “Insufficient Funds in
Account”. Legal demand notice was served on the Respondent but they
despite service did not tender any amount and hence the complaint was
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filed.
3. Ld. Magistrate after considering the evidence and the documents
summoned the respondents for the offence punishable under Section 138
of the Negotiable Instruments Act (herein after referred as N.I. Act) vide
order dated 02.11.2018. During the pendency, Respondent Nos. 2 & 3
moved the application seeking stay of the proceedings till the conclusion
of the insolvency proceedings under the provisions of The Insolvency and
Bankruptcy Code (hereinafter referred as IBC) 2016 initiated by the State
Bank of India. Ld. Counsel submitted that after hearing the application,
the Ld. Trial Court stayed the proceedings vide order dated 24.08.2023,
which is impugned in the present revision.
4. I have heard the Ld. Counsel for the petitioner, Ld. Counsel for the
respondent and perused the record.
5. Ld. Counsel for the petitioner submitted that in this case, the Trial Court
has not considered all the facts. The Ld. Counsel submitted that the
Hon’ble Supreme Court in the case of P. Mohanraj vs Shah Bros. Ispat
(P) Ltd., (2021) 6 SCC 258 has observed as under:
“….Since the corporate debtor would be covered by the moratorium provision
contained in Section 14 IBC, by which continuation of Sections 138/141
proceedings against the corporate debtor and initiation of Sections 138/141
proceedings against the said debtor during the corporate insolvency resolution
process are interdicted, what is stated in paras 51 and 59 in AneetaHada
[AneetaHada v. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661:
(2012) 3 SCC (Civ) 350: (2012) 3 SCC (Cri) 241] would then become
applicable. The legal impediment contained in Section 14 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 Sections
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 Sections 141(1) and (2) of the Negotiable
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Instruments Act. This being the case, it is clear that the moratorium provision
contained in Section 14 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."
Also in Ajay Kumar Radheyshyam Goenka Vs Tourism Finance Corporation
India Ltd" 2023: INSC:232 observed the scope of the IBC as well as NI act.
"We have no hesitation in coming to the conclusion that the scope of nature of
proceedings under the two Acts are 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 NI Act. We are unable to appreciate the plea of the learned
counsel for the appellant that because Section 138 of N.1. 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 N.I. Act are not the
recovery proceedings. They are penal in character. A person may face
imprisonment or fine or both under section 138 of the N.I. Act. It is not the
recovery of the amount with interest as a debt recovery proceedings would be.
They are not akin to suit proceedings. Hon'ble Supreme court further said that;
"We are unable to accept the plea that if proceedings against the company
come to an end then the Appellant AS THE Managing Director cannot be
proceeded against. We are unable to accept the plea that Section 138 of the
N.I. Act proceedings are primarily compensatory in nature and that the
punitive element is incorporated only at enforcing the compensatory
proceedings. The criminal liability and the fines are built on the principle of
not honouring a negotiable instrument, which affects trade. This is apart from
the principle of financial liability per se. To say under a scheme which may be
approved, a part amount will be recovered or if there is no scheme a person
may stand in a queue to recover debt would absolve the consequences under
Section 138 of the N.I. act, is unacceptable.”
6. The Ld. Counsel submitted that keeping in view the law settled by the
Hon’ble Supreme Court of India, the order of the Trial Court be set aside
and revision be allowed.
7. Ld. Counsel for the respondent submitted that the revision itself is not
maintainable as it is only an interlocutory order and it is settled law that
revision under Section 397 of the CrPC/Section 438 (1) of the BNSS is
not maintainable. Ld. Counsel for the petitioner submitted that staying the
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proceedings is only an interlocutory order.
8. Ld. Counsel for the petitioners submitted that this question was
considered by the Hon’ble High Court of Delhi in a recent judgment titled
Dilshad Hussain vs Pushpa Devi decided on 05.05.2025, whereby the
Court considering the judgment passed by the Supreme Court in the case
of Madhu Limaye vs State of Maharashtra (1977), Vol. 4 SCC 551 and
K.K. Patel & Anr vs State of Gujarat 2000 (6) SCC 195 distinguished
between an interlocutory order and an intermediate order. Ld. Counsel
submitted that it is not interlocutory order but it is intermediate order as
proceedings have come to an end so far as Respondent Nos. 2 & 3 are
concerned by passing off this order and even otherwise as per the Hon’ble
Supreme Court the proceedings against them shall continue. The stay will
continue till the proceedings under the Insolvency and Bankruptcy Code,
2016 are not concluded.
9. Ld. Counsel in support of his arguments relied upon the judgment cited as
Amar Nath & others vs State of Haryana & others, 1977 Cr.LJ 1891. Ld.
Counsel for the respondent submitted that keeping in view this law, the
revision be dismissed.
10. After hearing the arguments and going through the report, I found that in
this case the Trial Court has held that in view of the proceeding under
Insolvency and Bankruptcy Code 2016 pending against the Respondent
No. 2 and 3 herein the proceeding against them cannot proceed and
stayed the proceeding.
11. Keeping in view this fact, it is clear that though the order have not
culminated the proceedings, but the proceeding will not continue against
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them.
12. The Hob’ble Supreme Court has held in the judgment titled Rakesh
Bhanot vs M/s Gurdas Agro Pvt Ltd, Crl. Appeal No. 1607 of 2025 has
held as under:
“…
…
10.2 The above provisions specifically relate to cheque dishonour cases, and
the persons responsible for such dishonour, may be criminally prosecuted and
subjected to penal action, as per the conditions specified under the N.I. Act,
1881.
11. Admittedly, the appellants/petitioners are facing trial for the offence under
section 138/141 of the N.I. Act, 1881, at the instance of the
respondents/complainants. While so, they initiated the personal insolvency
proceedings under the IBC and sought exemption from the Section 138
proceedings before the trial Court, referring to interim moratorium provided
under Section 96 IBC. It is to be noted that upon the application being
admitted, the moratorium provisions under the IBC offer protection only to the
corporate debtor i.e. the company, and do not extend protection against civil
liability to personal guarantors by specific exclusion or to any individual who
is prosecuted for committing a criminal act.
…
…”
13. Under the circumstances, it is clear that the order passed by the court is
not in accordance with the settled law and is against the principles of law
and hence not sustainable. The law as laid down by the Hon’ble Supreme
Court is that the proceedings cannot continue only against the corporate
debtors but the same may continue against other persons. In the present
case, there is nothing on record that Respondents Nos. 2 & 3 are the
corporate debtors and hence the proceedings can continue against them.
14. Keeping in view these facts, the order of the Trial Court is set aside. The
parties are directed to appear before the trial court for 09.07.2025.
15. The revision is accordingly disposed off.
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16. Revision file be consigned to Record Room.
(Virender Kumar Bansal)
Principal District & Sessions Judge
New Delhi District
Patiala House Courts/ND/06.06.2025
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