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. 748/2023
CNR No. DLND01-00-9834-2023
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
22.12.2022, 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. 340033 dated 15.03.2018, which when presented for
encashment returned unpaid due to the reasons “Refer to Drawer”. Legal
demand notice was served on the Respondent but they despite service did
not tender any amount and hence the complaint was filed.
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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 26.07.2019. 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 22.12.2022,
which is impugned in the present revision.
4. There is delay in filing the revision. Hence, an application under Section
5 of The Limitation Act has been filed. Notice of the revision as well as
the application was sent to the respondents.
5. I have heard the Ld. Counsel for the petitioner, Ld. Counsel for the
respondent and perused the record.
6. Firstly, the arguments on the application for limitation were addressed.
Ld. Counsel for the petitioner submitted that the Respondent Nos. 2 & 3
moved the application under Section 96 of the IBC 2016. It is submitted
that the arguments on the application were heard on 22.12.2022 and the
matter was adjourned to 01.07.2023. On 01.07.2023, the Ld. MM was on
leave and the case status was showing for miscellaneous arguments and
the case was adjourned to 07.10.2023. The Ld. Counsel representing the
petitioner/complainant was under the impression that the matter was
listed for further arguments on the application as the order dated
22.12.2022 was not uploaded on the official website and the case status
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was still showing as miscellaneous arguments. It was only on 07.10.2023,
that the Ld. Counsel for the petitioner came to know that the proceedings
had been stayed on 22.12.2022 itself. Thereafter an application for taking
the certified copy was moved on 09.10.2023, which was received on
12.10.2023 and the revision has been filed on 17.11.2023 and taken up
for hearing on 25.11.2023. Ld. Counsel submitted that there is a delay of
215 days in filing of the petition but the reason why it could not be filed
earlier is because neither the petitioner nor respondents were aware that
the order had already been passed. It is submitted that keeping in view all
these facts, the delay in filing the complaint be condoned. Ld. Counsel
submitted that even otherwise there is merit in the revision and it is
settled law that a pragmatic approach has to be taken while deciding the
application for condonation of delay. The revisionist has a very strong
case and it is prayed that the delay be condoned.
7. In support of his arguments, Ld. Counsel has relied upon the following
judgment.
Vedabai vs Shantaram Baburao Patil, CA No. 4494/2001 decided on
20.07.2001, Supreme Court of India.
“…
…
5. In exercising discretion under S.5 of the Limitation Act the Courts should
adopt a pragmatic approach. A distinction must be made between a case where
the delay is inordinate and a case where the delay is of a few days. Whereas in
the former case the consideration of prejudice to the other side will be a
relevant factor so the case calls for a more cautious approach but in the latter
case no such consideration may arise and such a case deserves a liberal
approach. No hard and fast rule can be laid down in this regard. The Court has
to exercise the discretion on the facts of each case keeping in mind that in
construing the expression ‘ sufficient cause,’ the principle of advancing
substantial justice is of prime importance. In our view in this case, the
approach of the learned Civil Judge is wholly erroneous and his order is
unsustainable. It is evident that discretion under S.5 of the Limitation Act is
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exercised by the Civil Judge in contravention of the law laid down by this
Court, that the expression ‘sufficient cause’ should receive liberal
construction, in catena of decisions [State of West Bengal vs Administrator,
Howrah Municipality, (1972) 1 SCC 366 and Smt. Sandhya Rani Sarkar vs
Smt. Sudha Rani Debi, (1978) 2 SCC 116]. The High Court in exercising its
jurisdiction under S.115 C.P.C. failed to correct the jurisdictional error of the
appellate Court.
…”
8. Ld. Counsel for the respondent submitted that the submissions made are
not correct and the order was passed on 22.12.2022. There is an
inordinate delay of 215 days in filing the revision petition. Each day's
delay has to be explained. The revisionist, who is not diligent in pursuing
his matter, is not entitled to any relief. It is prayed that, on the ground of
delay itself, the revision be dismissed.
9. After hearing the arguments and considering all the facts and also the
submissions, I found that there is a delay of 215 days in moving the
revision. There is an explanation coming forward that they came to know
about the passing of the order only on 07.10.2023. The record shows that
after 22.12.2022, the next date was 01.07.2023 and on that date the court
was on leave and thereafter, the next date given was 07.10.2023. Under
the circumstances, the plea taken by the petitioner seems plausible that
they were not aware of the order, as it was also not uploaded and they
came to know about order only on 07.10.2023 and immediately thereafter
they applied for the certified copy and filed a petition. The law on this
aspect is very liberal and it is settled law that the rights of the parties are
not to be scuttled on the technicalities, if the same have merits. Hence,
keeping in view the facts and circumstances of the case, the delay in
filing the revision is condoned.
10. Ld. Counsel for the petitioner submitted that in this case, the Trial Court
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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
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
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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.”
11. 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.
12. 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
proceedings is only an interlocutory order.
13. 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.
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14. 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.
15. 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.
16. Keeping in view this fact, it is clear that though the order have not
culminated the proceedings, but the proceeding will not continue against
them.
17. Though 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.
…
…”
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18. 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.
19. 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.
20. The revision is accordingly disposed off.
21. 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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