Whether during the pendency of the proceedings under the IBC, the criminal prosecution initiated under the Negotiable Instruments Act, 1881 against Directors of a Corporate Debtor can continue simultaneously or not? – Sachin Goyal and another Vs. M/s Rajasthan Trading Co. and another – Punjab & Haryana High Court
Hon’ble High Court held that what flows from the law laid down by a Three Judge Bench of the Hon’ble Supreme Court in Ajay Kumar Radheyshyam Goenka vs. Tourism Finance Corporation of India Ltd. (2023) ibclaw.in 30 SC is that whereas recovery proceedings barred under Section 14 of the IBC are primarily civil in nature, the proceedings under Section 138 of the NI Act are criminal in nature, and both have a different set of purpose. Furthermore, the complainant approaches the Criminal Court not only for recovery of the legally enforceable debt but also for taking penal action under Section 138 of the NI Act for the offence already committed by the accused by not making the payment of the cheque amount despite the receipt of the statutory notice. Therefore, by operation of the provisions of the IBC, the criminal prosecution initiated against the natural persons under Section 138 read with 141 of the NI Act would not stand terminated.
