Dismissed

Indiranagar Chit Funds and Trading Company Private Limited v. Harishkumar T G

Karnataka HC18 Mar 2021CRL.P/4888/2020

Case brief

AI extract

What is this about?

Chit fund subscribers filed Section 138 NI Act complaints against a chit fund company and its directors. The directors sought quashing under Section 482 Cr.P.C., invoking the moratorium passed by the NCLT under the I&B Code. The court held the moratorium applies only to the corporate debtor and dismissed the petitions, allowing the cheque dishonour proceedings to continue against the company and t

What the court decided

AI extract

Indiranagar Chit Funds and Trading Company… — Insolvency and Bankruptcy | Karnataka HC (2021)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 18^TH DAY OF MARCH, 2021

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BEFORE

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THE HON'BLE MR. JUSTICE H.P. SANDESH

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CRIMINAL PETITION NO.4902/2020 C/W.

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CRIMINAL PETITION NO.4166/2020 CRIMINAL PETITION NO.4887/2020 CRIMINAL PETITION NO.4888/2020 CRIMINAL PETITION NO.4889/2020 CRIMINAL PETITION NO.4890/2020 CRIMINAL PETITION NO.4892/2020 CRIMINAL PETITION NO.4894/2020 CRIMINAL PETITION NO.4895/2020 CRIMINAL PETITION NO.4897/2020 CRIMINAL PETITION NO.4900/2020 CRIMINAL PETITION NO.4901/2020 CRIMINAL PETITION NO.4904/2020 CRIMINAL PETITION NO.4905/2020 CRIMINAL PETITION NO.4907/2020 CRIMINAL PETITION NO.4908/2020

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IN CRIMINAL PETITION NO.4902/2020:

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BETWEEN:

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1 . INDIRANAGAR CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 AND HAVING ITS REGSITERED OFFICE NO-258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038 REPRESENTED BY ITS AUTHORIZED SIGNATORIES MR.CHANDRASEKHARA BABU AND MR.RAVI KUMAR P.K.

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2 . SRI CHANDRASEKHARA BABU AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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3 . SRI RAVI KUMAR P.K. AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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4 . SRI VAISHAK BABU No.258, P.B.NO.3803 6^TH CROSS, I STAGE INDIRANAGARA BENGALURU - 560038

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… PETITIONERS (BY SRI UNNIKRISHNAN M., ADVOCATE)

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AND:

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SRI RABINDRA KUMAR S/O N.PRASAD AGED ABOUT 40 YEARS R/AT No.3/5, 9^TH CROSS PAMPA EXTENSION, HEBBAL BENGALURU - 560024

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… RESPONDENT

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(BY SRI SHANKARAIAH B., AND SRI AMIT KUMAR, ADVOCATES)

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C PRAYING TO QUASH ALL PROCEEDINGS IN C.C.NO.20540/2019 PENDING BEFORE THE XVIII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU AS AGAINST THESE PETITIONERS.

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IN CRIMINAL PETITION NO.4166/2020:

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BETWEEN:

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2 . SRI CHANDRASEKHARA BABU AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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3 . SRI RAVI KUMAR P.K. AUTHORIZED SIGNATORY OF INDIRANAGARA

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CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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… PETITIONERS (BY SRI UNNIKRISHNAN M., ADVOCATE)

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AND:

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SRI BHASKAR H S/O SRI HANUMANTHARAJU M. AGED ABOUT 47 YEARS RESIDING AT PRASIDDI VINAYAKA AIR CONDITIONER NO.3063, PRASIDDI HOUSE, 11^TH CROSS

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GAYATHRI NAGAR, RAJAJINAGAR BENGALURU - 560021

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… RESPONDENT

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(BY SRI G.H.SRINIVAS, ADVOCATES)

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C PRAYING TO QUASH ALL PROCEEDINGS IN C.C.NO.2644/2019 PENDING BEFORE THE XXXVIII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU AS AGAINST THESE PETITIONERS.

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IN CRIMINAL PETITION NO.4887/2020:

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BETWEEN:

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2 . SRI RAVI KUMAR P.K.

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AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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SRI CHANDRASEKHARA BABU AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA

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BENGALURU - 560038

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… PETITIONERS (BY SRI UNNIKRISHNAN M., ADVOCATE)

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AND:

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SHOBA RAMESH W/O DR.A.C.RAMESH AGED ABOUT 56 YEARS RESIDING AT No.592 10^TH ‘ A’ MAIN, 5^TH BLOCK JAYANAGAR, BENGALURU - 560041

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… RESPONDENT

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(BY SRI H.N. SHASHIDHARA, ADVOCATES-(THROUGH V.C.))

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C PRAYING TO QUASH ALL PROCEEDINGS IN C.C.NO.9186/2019 PENDING BEFORE THE XXII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU AS AGAINST THESE PETITIONERS.

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IN CRIMINAL PETITION NO.4888/2020

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BETWEEN:

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2 . SRI CHANDRASEKHARA BABU AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND

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TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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3 . SRI RAVI KUMAR P.K. AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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… PETITIONERS (BY SRI UNNIKRISHNAN M., ADVOCATE)

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AND:

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HARISHKUMAR T.G., S/O MR. T.P.GANAPATHY RESIDING AT 1611, B BLOCK NEAR UCO BANK, SAHAKARANAGAR BENGALURU - 560092

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… RESPONDENT

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(BY SMT.SUMA G., ADV. FOR SRI DHIRENDRA N.KATTI, ADV.)

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C PRAYING TO QUASH ALL PROCEEDINGS IN C.C.NO.10908/2019 PENDING BEFORE THE XVIII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU AS AGAINST THESE PETITIONERS.

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IN CRIMINAL PETITION NO.4889/2020:

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BETWEEN:

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INDIRANAGAR CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 AND HAVING ITS REGSITERED OFFICE NO-258, P.B.NO.3803, 6^TH CROSS

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I STAGE, INDIRANAGARA BENGALURU - 560038 REPRESENTED BY ITS AUTHORIZED SIGNATORIES MR.CHANDRASEKHARA BABU AND MR.RAVI KUMAR P.K.

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… PETITIONER (BY SRI UNNIKRISHNAN M., ADVOCATE)

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AND:

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SRI SANDEEP M.J. S/O SRI JAYARAM AGED ABOUT 35 YEARS RESIDING AT No.500 ‘GOKULA NILAYA’ JYOTHI LAYOUT 1^ST CROSS,VINAYAKA LAYOUT BASAVANAPURA MAIN ROAD BENGALURU - 560036

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… RESPONDENT

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(BY SRI C. SHANKAR REDDY, ADVOCATE-(THROUGH V.C.))

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C PRAYING TO QUASH ALL PROCEEDINGS IN C.C.NO.53860/2019 PENDING BEFORE THE LVII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU AS AGAINST THESE PETITIONERS.

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IN CRIMINAL PETITION NO.4890/2020:

BETWEEN:

MR.CHANDRASEKHARA BABU AND MR.RAVI KUMAR P.K.

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2 . SRI RAVI KUMAR P.K. AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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SRI CHANDRASEKHARA BABU AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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… PETITIONERS (BY SRI UNNIKRISHNAN M., ADVOCATE)

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AND:

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SHOBA RAMESH W/O DR.A.C.RAMESH AGED ABOUT 56 YEARS RESIDING AT No.592, 10^TH ‘ A’ MAIN, 5^TH BLOCK, JAYANAGAR, BENGALURU - 560041

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… RESPONDENT

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(BY SRI H.N. SHASHIDHARA, ADVOCATES-(THROUGH V.C.))

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C PRAYING TO QUASH ALL PROCEEDINGS IN C.C.NO.9185/2019 PENDING BEFORE THE XXII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU AS AGAINST THESE PETITIONERS.

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IN CRIMINAL PETITION NO.4892/2020:

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BETWEEN:

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SRI PADMAVILAS KUTTAN MANAGING DIRECTOR No.258, P.B.NO.3803 6^TH CROSS, I STAGE, INDIRANAGARA BENGALURU-560038

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3 . SRI CHANDRASEKHARA BABU AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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4 . SRI RAVI KUMAR P.K. AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038 … PETITIONERS (BY SRI UNNIKRISHNAN M., ADVOCATE)

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AND:

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SRI B.JAYAPPA S/O BASAPPA AGED ABOUT 58 YEARS No.740, 10^TH MAIN ROAD VINAYAKA LAYOUT NAGARABHAVI 2^ND STAGE BENGALURU - 560072

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… RESPONDENT

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(BY SRI H.M.RUDRA KUMAR, ADVOCATES)

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C PRAYING TO QUASH ALL PROCEEDINGS IN C.C.NO.1969/2019 PENDING BEFORE THE XXII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU AS AGAINST THESE PETITIONERS.

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IN CRIMINAL PETITION NO.4894/2020:

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BETWEEN:

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2 . SRI CHANDRASEKHARA BABU AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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3 . SRI RAVI KUMAR P.K. AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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4 . SRI VAISHAK BABU S/O CHANDRASHEKAR BABU AUTHORISED REPRESENTATIVE OF M/S. INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, I STAGE, INDIRANAGARA P.B.NO.3803, BENGALURU – 560038

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SMT. VANITHA BABU W/O CHANDRASHEKAR BABU AUTHORISED REPRESENTATIVE OF M/S. INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, I STAGE, INDIRANAGARA P.B.NO.3803, BENGALURU – 560038

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ALSO AT No.33, PKAN BUILDING OPP: BDA COMPLEX, 1^ST STAGE INDIRANAGARA, BENGALURU-560038.

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… PETITIONERS

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(BY SRI UNNIKRISHNAN M., ADVOCATE)

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AND:

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SMT.PALLAVI PRABHU W/O RAHUL SHEKAR AGED ABOUT 34 YEARS RESIDING AT No.15, 2^ND FLOOR 1^ST CROSS, 9^TH MAIN, CHAIRMANS LAYOUT HRBR 1^ST BLOCK, BANASWADI FIRE STATION BENGALURU – 560043.

… RESPONDENT

(RESPONDENT SERVED)

THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C PRAYING TO QUASH ALL PROCEEDINGS IN C.C.NO.55615/2019 PENDING BEFORE THE LVII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU AS AGAINST THESE PETITIONERS.

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IN CRIMINAL PETITION NO.4895/2020:

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BETWEEN:

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2 . SRI CHANDRASEKHARA BABU AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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3 . SRI RAVI KUMAR P.K. AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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… PETITIONERS (BY SRI UNNIKRISHNAN M., ADVOCATE)

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AND:

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PRASIDDI VINAYAKA AIR CONDITIONER A PROPRIETORSHIP CONCERN AND REPRESENTED BY ITS PROPRIETOR SMT.G.H.NAGAMANI No.3063, PRASIDDI HOUSE, 11^TH CROSS GAYATHRI NAGAR, RAJAJINAGAR BENGALURU – 560021.

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… RESPONDENT

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(BY SRI G.H.SRINIVAS, ADVOCATE)

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C PRAYING TO QUASH ALL PROCEEDINGS IN C.C.NO.2645/2019 PENDING BEFORE THE XII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU AS AGAINST THESE PETITIONERS.

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IN CRIMINAL PETITION NO.4897/2020:

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BETWEEN:

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2 . SRI CHANDRASEKHARA BABU AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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3 . SRI RAVI KUMAR P.K. AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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… PETITIONERS (BY SRI UNNIKRISHNAN M., ADVOCATE)

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AND:

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MR.UDAY SHANKAR S/O LATE MR.N.KESAVA REDDY AGED ABOUT 49 YEARS RESIDING AT No.75, 3^RD CROSS 515 COLONY, BDA LAYOUT INDIRANAGAR 80 FEET ROAD NEW THIPPASANDRA POST BENGALURU-560075.

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… RESPONDENT

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(BY SRI K.S.PERIYA SWAMY, ADVOCATE)

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C PRAYING TO QUASH ALL PROCEEDINGS IN C.C.NO.55134/2019 PENDING BEFORE THE LVII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU AS AGAINST THESE PETITIONERS.

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IN CRIMINAL PETITION NO.4900/2020:

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BETWEEN:

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1 . INDIRANAGAR CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 AND HAVING ITS REGSITERED OFFICE NO-258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA

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BENGALURU - 560038 REPRESENTED BY ITS AUTHORIZED SIGNATORIES MR.CHANDRASEKHARA BABU AND MR.RAVI KUMAR P.K.

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2 . SRI RAVI KUMAR P.K. AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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SRI CHANDRASEKHARA BABU AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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… PETITIONERS (BY SRI UNNIKRISHNAN M., ADVOCATE)

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AND:

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SHOBA RAMESH W/O DR.A.C.RAMESH AGED ABOUT 56 YEARS RESIDING AT No.592 10^TH ‘ A’ MAIN, 5^TH BLOCK JAYANAGAR, BENGALURU - 560041

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… RESPONDENT

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(BY SRI H.N. SHASHIDHARA, ADVOCATES-(THROUGH V.C.))

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C PRAYING TO QUASH ALL PROCEEDINGS IN C.C.NO.9182/2019 PENDING BEFORE THE XXII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU AS AGAINST THESE PETITIONERS.

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CRIMINAL PETITION NO.4901/2020:

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BETWEEN:

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2 . SRI CHANDRASEKHARA BABU AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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3 . SRI RAVI KUMAR P.K. AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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… PETITIONERS (BY SRI UNNIKRISHNAN M., ADVOCATE)

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AND:

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KALA ARTHANARI C/O MR. RAJESH

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LATE V. SUBRAMANIAN AGED ABOUT 70 YEARS

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RESIDING AT No.109, 9^TH MAIN GOKUL EXTENSION, 1^ST STAGE, 2^ND PHASE BENGALURU-560054.

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… RESPONDENT

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(BY SRI.KARTHIK P.M., ADV. FOR SMT.BRINDA K. VARMA, ADV.)

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C PRAYING TO QUASH ALL PROCEEDINGS IN C.C.NO.14330/2019 PENDING BEFORE THE XV ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU AS AGAINST THESE PETITIONERS.

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IN CRIMINAL PETITION NO.4904/2020:

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BETWEEN:

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2 . SRI RAVI KUMAR P.K. AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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SRI CHANDRASEKHARA BABU AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS

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I STAGE, INDIRANAGARA BENGALURU - 560038

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… PETITIONERS (BY SRI UNNIKRISHNAN M., ADVOCATE)

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AND:

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SMT.SHOBHA RAMESH W/O DR.A.C.RAMESH AGED ABOUT 56 YEARS RESIDING AT No.592 10^TH ‘ A’ MAIN, 5^TH BLOCK JAYANAGAR, BENGALURU - 560041

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… RESPONDENT

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(BY SRI H.N. SHASHIDHARA, ADVOCATES-(THROUGH V.C.))

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THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C PRAYING TO QUASH ALL PROCEEDINGS IN C.C.NO.9184/2019 PENDING BEFORE THE XXII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU AS AGAINST THESE PETITIONERS.

¶182

IN CRIMINAL PETITION NO.4905/2020:

BETWEEN:

2 . SRI CHANDRASEKHARA BABU AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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3 . SRI RAVI KUMAR P.K. AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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… PETITIONERS (BY SRI UNNIKRISHNAN M., ADVOCATE)

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AND:

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SRI MANJUNATHA K. S/O LATE V.M.KRISHNAIAH SETTY AGED ABOUT 57 YEARS RESIDING AT No.19 13^TH CROSS, KADIRENAHALLI BENDRENAGAR, BSK II STAGE BENGALURU-560 070.

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… RESPONDENT

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(BY SRI SHANKAR NARAYAN VELU V., ADVOCATE FOR SMT. JAMUNA BAI, ADVOCATE)

¶193

THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C PRAYING TO QUASH ALL PROCEEDINGS IN C.C.NO.1652/2019 PENDING BEFORE THE XVI ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU AS AGAINST THESE PETITIONERS.

¶194

¶195

IN CRIMINAL PETITION NO.4907/2020:

¶196

BETWEEN:

¶197

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2 . SRI CHANDRASEKHARA BABU AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

¶199

3 . SRI RAVI KUMAR P.K. AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

¶200

… PETITIONERS (BY SRI UNNIKRISHNAN M., ADVOCATE)

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AND:

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HARISHKUMAR T.G. S/O MR. T.P.GANAPATHY RESIDINGA AT 1611, B-BLOCK NEAR UCO BANK, SAHAKARANAGAR BENGALURU-560 092. … RESPONDENT (BY SMT.SUMA G., ADV. FOR SRI DHIRENDRA N. KATTY, ADV.)

¶203

¶204

THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C PRAYING TO QUASH ALL PROCEEDINGS IN C.C.NO.10909/2019 PENDING BEFORE THE XVIII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU AS AGAINST THESE PETITIONERS.

¶205

IN CRIMINAL PETITION NO.4908/2020:

¶206

BETWEEN:

¶207

¶208

2 . SRI RAVI KUMAR P.K. AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

¶209

SRI CHANDRASEKHARA BABU AUTHORIZED SIGNATORY OF INDIRANAGARA CHIT FUNDS AND TRADING COMPANY PRIVATE LIMITED No.258, P.B.NO.3803, 6^TH CROSS I STAGE, INDIRANAGARA BENGALURU - 560038

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… PETITIONERS (BY SRI UNNIKRISHNAN M., ADVOCATE)

¶211

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AND:

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SHOBA RAMESH W/O DR.A.C.RAMESH AGED ABOUT 56 YEARS RESIDING AT No.592 10^TH ‘ A’ MAIN, 5^TH BLOCK JAYANAGAR, BENGALURU - 560041

¶214

… RESPONDENT

¶215

(BY SRI H.N. SHASHIDHARA, ADVOCATES-(THROUGH V.C.))

¶216

THIS CRIMINAL PETITION IS FILED UNDER SECTION 482 OF CR.P.C PRAYING TO QUASH ALL PROCEEDINGS IN C.C.NO.9183/2019 PENDING BEFORE THE XXII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE, BENGALURU AS AGAINST THESE PETITIONERS.

¶217

THESE CRIMINAL PETITIONS HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 06.03.2021 THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:

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O R D E R

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Crl.P.Nos.4902/2020, 4166/2020, 4887/2020, 4888/2020, 4889/2020, 4890/2020, 4892/2020, 4894/2020, 4895/2020, 4897/2020, 4900/2020, 4901/2020, 4904/2020, 4905/2020, 4907/2020 and 4908/2020 are filed under Section 482 of Cr.P.C. praying this Court to quash the proceedings in C.C.No.20540/2019 pending on the file of XVIII Additional Chief Metropolitan Magistrate, Bengaluru; C.C.NO.2644/2019 pending on the file of XXXVII Additional Chief Metropolitan Magistrate, Bengaluru; C.C.NO.9186/2019 pending on the file of XXII

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Additional Chief Metropolitan Magistrate, Bengaluru; C.C.NO.10908/2019 pending on the file of XVIII Additional Chief Metropolitan Magistrate, Bengaluru; C.C.NO.53860/2019 pending on the file of LVII Additional Chief Metropolitan Magistrate, Bengaluru; C.C.NO.9185/2019 pending on the file of XXII Additional Chief Metropolitan Magistrate, Bengaluru; C.C.NO.1969/2019 pending on the file of XXII Additional Chief Metropolitan Magistrate, Bengaluru; C.C.NO.55615/2019 pending on the file of LVII Additional Chief Metropolitan Magistrate, Bengaluru; C.C.NO.2645/2019 pending on the file of XII Additional Chief Metropolitan Magistrate, Bengaluru; C.C.NO.55134/2019 pending on the file of LVII Additional Chief Metropolitan Magistrate, Bengaluru; C.C.NO.9182/2019 pending on the file of XXII Additional Chief Metropolitan Magistrate, Bengaluru; C.C.NO.14330/2019 pending on the file of XV Additional Chief Metropolitan Magistrate, Bengaluru; C.C.NO.9184/2019 pending on the file of XXII Additional Chief Metropolitan Magistrate, Bengaluru; C.C.NO.1652/2019 pending on the file of XVI Additional Chief Metropolitan Magistrate, Bengaluru; C.C.NO.10909/2019 pending on the file of XVIII Additional Chief Metropolitan Magistrate, Bengaluru; and

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C.C.NO.9183/2019 pending on the file of XXII Additional Chief Metropolitan Magistrate, Bengaluru respectively against these petitioners and pass such other orders as deem fit in the facts and circumstances of the case.

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The factual matrix of the case is that the petitioners were running M/s. Indiranagar Chit Funds and Trading Company, registered as a Chit Fund Company under the provisions of the Companies Act, 1956 in the year 1976. The Company gained popularity over a period of time in the Chit Fund business and has completed about 2000 chit groups. It is the further contention of the petitioners that the Company grew to become a force to reckon with in the Chit Fund Business and transacted with several Crores of Rupees and with more than around 5000 satisfied customers. In fact, the Company was started by one Mr.Achuthan Nair, i.e., the father of the second and third petitioners. That after his demise, his sons Mr.P.K.Chandrasekhara Babu and Mr.P.K.Ravi Kumar were managing the business as its Directors.

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Due to the general slump in the financial market and also due to the demonetization of money, many of the

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subscribers of the chits, who were paying in cash started defaulting in payment of monthly installments. That apart, many customers/subscribers, who had bid for the chit also did not repay M/s. Indiranagar Chit Funds and Trading Company, as a result of which, there was short fall in collection every month. However, the expenses and out flow from the Company did not reduce. Due to financial pressures as stated supra, the chit groups were also not fully subscribed. The Company instead of focusing on recoveries started repaying the customers whose chits had matured by borrowing heavily with huge rate of interest i.e., 2% to 4%, as a result of which, there was financial pressure over the Company.

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It is further contended that in many cases, the customers did not take the chit and left it with the Company to get interest which would be the subscription for a new chit. This resulted in unhealthy and unfinished group having less collection every month and with the shortage of collections and inflow of funds was only in Books and not in reality. Thus, the Company was in the red which resulted in no inflow of cash. It is also contended that M/s. Indiranagar Chit Funds and Trading

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Company sold some of its properties and repaid many customers. This being the factual situation, the Superintendent in the office of the Assistant Registrar of Co-operative Societies, filed a complaint before the Indiranagar Police Station when many subscribers of Chit Fund Companies started complaining regarding the default of the Company. The first respondentPolice registered a complaint under Section 420 of IPC and Section 76 of the Chit Fund Act, 1982 (for short 'the Act, 1982') against the Directors of the M/s. Indiranagar Chit Funds and Trading Company. The filing of criminal case triggered panic amongst subscribers of the first petitioner, who filed many cheque bounce cases against the petitioners. In fact, the petitioners were not allowed to set right things and the Indiranagar Police sealed all offices of the first petitioner and seized all accounts books and froze all the Bank accounts. Thus, the cheque was returned due to accounts being frozen and returned unpaid with the remarks "Refer the Drawer".

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It is further contended that in the meanwhile, one Mr.Rajendra.P filed a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 (for short 'the I&B Code, 2016')

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read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for short 'I&B Rules, 2016') by inter alia seeking to initiate the Corporate Insolvency Resolution Process against the first petitioner on the ground that it has committed default. The said petition was filed before the National Company Law Tribunal, Bengaluru Bench and numbered as CP (IB) No.322/BB/2019. The said petition came up before the National Company Law Tribunal (NCLT), Bengaluru Bench on 28.01.2020 and the Tribunal was pleased to admit the petition and ordered that a Moratorium be declared in respect of the first petitioner and its Directors i.e., the second and third petitioners. By virtue of the order dated 28.01.2020 of the NCLT, Bengaluru Bench and Section 101 of the I&B Code, 2016, the proceedings initiated by the respondent against the petitioners herein will have to be quashed.

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The common ground urged in all the petitions is that Section 101 of the I&B Code, 2016 states that once an application for initiation of Corporate Insolvency is filed and admitted before the National Company Law Tribunal, a Moratorium shall commence in relation to all the debts and all

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pending legal action or proceedings in respect of any debts shall be deemed to have been stayed. That apart, Section 3(11) of the I&B Code, 2016 describes "Debt as a liability or obligation in respect of the claim which is due from any persons and includes a financial debt or operation debt". Accordingly, since Section 101 sub clause 2(a) postulates that all pending legal actions or proceedings in respect of any debt shall deemed to have been stayed.

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It is contended that under Section 101(3) states that when an order of admitting the application under Section 96 of I&B Code, 2016 has been made in relation to a firm, the Moratorium would also apply against all the partners of the firm. Further, Section 141(2) of the Negotiable Instruments Act (for short ‘the NI Act’), i.e., at explanation, it states that the Director in relation to a firm means a Partner of the firm and hence, the proceedings initiated against all these petitioners by all the respondents herein needs to be quashed.

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Learned counsel appearing for the petitioners would vehemently contend that separate complaints are filed by the different subscribers against the Company as well as other

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petitioners. Learned counsel also would submit that the NCLT has admitted the petition and liquidation proceeding is going on and the moratorium orders is also passed. Learned counsel would submit that it was declared that the insolvency proceeding was initiated and also the liquidation order was also passed and hence, there cannot be any proceedings against the Company as well as its Directors.

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Learned counsel in support of his arguments, also relied upon the recent judgment of the Apex Court passed in Civil Appeal No.10355/2018 between P.MOHANRAJ AND ORS. v. M/S. SHAH BROTHERS ISPAT PVT. LTD. Learned counsel referring to this judgment brought to the notice of this Court para Nos.33, 53 and 65 and would vehemently contend that there cannot be any proceedings against the petitioners. The Hon'ble Apex Court held in the judgment referred supra that Section 138 of the NI Act also attracts against the petitioners. The moratorium proceedings contained under Section 14 of the I&B Code, 2016 would apply to Section 138 proceedings also. Hence, the proceedings initiated against these petitioners are to be quashed.

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Per contra, learned counsel appearing for the respondent in Crl.P.No.4897/2020 would vehemently contend

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that the proceedings initiated by one of the subscribers is only for Rs.8 Crores and the due amount payable is of Rs.47 Crores.

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Learned counsel also filed a memo stating that Section 482 of Cr.P.C. is totally not applicable in respect of the cases which are pending before XXXIII Additional Chief Metropolitan Magistrate, Mayo Hall Unit, Bengaluru. The ratio rendered by the Apex Court in the judgment decided on 01.03.2021 in Civil Appeal No.10355/2018 between P.MOHANRAJ & ORS V. M/S. SHAH BROTHERS ISPAT PVT.

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LTD. , is clear that the proceedings under Section 138 of Negotiable Instruments Act though covers under the I&B Code, 2016, that is only in respect of Corporate Debtor and hence, the proceedings have to be continued against the Directors. Learned counsel would vehemently contend that the bar is only for institution of the suit and not in respect of proceedings under Section 138 of Negotiable Instruments Act.

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Sri.H.N.Shashidhara, learned counsel appearing for the respondents in Crl.P.Nos.4887/2020, 4890/2020, 4900/2020, 4904/2020, 4908/2020 would vehemently contend that the validity of the period of moratorium is only for six months. Since the order has been passed in the month of January, 2020, the same has also expired. Therefore, the petitioners cannot take shelter under the order of moratorium. Learned counsel in support of his arguments, would rely upon the judgment of the Apex Court in the case of SHAH BROTHERS ISPAT PVT. LTD., v. P.MOHANRAJ AND ORS reported in 2018 SCC Online NCLAT 415 , wherein the similar question was raised before the Court and the Apex Court had discussed regarding Section 14 of the I&B Code, 2016 and at para No.6, it has been observed that the proceedings under Section 138 of NI Act is a penal provision, which empowers the Court of competent jurisdiction to pass order of imprisonment or fine, which cannot be held to be proceeding or any judgment or decree of money claim. Imposing of fine cannot held to be a money claim or recovery against the Corporate Debtor nor order of imprisonment, if passed by the Court of competent jurisdiction on the Directors, they cannot come within the purview of Section

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Infact, no criminal proceeding is covered under Section 14 of I&B Code. The Court of competent jurisdiction may proceed with the proceeding under Section 138 of Negotiable Instruments Act, even during the period of moratorium.

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The learned counsel appearing for the other respondents also adopts the arguments canvassed by the learned counsel, who represented on behalf of the respondents before this Court as stated supra.

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In reply to the said arguments, learned counsel for the petitioners would submit that the contention of the respondents’ counsel that the bar is only in respect of the suit cannot be accepted and the petitioners are not disputing the order of liquidating the Company. In the recent judgment of the Apex Court, it has been held that it attracts Section 138 of NI Act also. Learned counsel appearing for the respondents would contend that I&B Code is not meant for protecting criminal proceedings and the very submission of the learned counsel for the petitioners is to make camouflage and the same cannot be accepted.

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Having heard the learned counsel for the petitioners

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and also learned counsel for the respondents, this Court has to appreciate the material available on record. It is not in dispute that the subscribers of the Chit Fund have initiated the proceedings against these petitioners under Section 138 of the NI Act. The main contention of the learned counsel for the petitioners before this Court is that one of the subscribers approached the NCLT and NCLT admitted the petition for moratorium and passed an order in the month of January, 2020. Learned counsel appearing for the petitioners also extracted Section 101 of I&B Code, 2016.

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Learned counsel appearing for the respondents

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relying upon the very same provisions, would vehemently contend that the moratorium period is valid only for six months as per Section 101 of the I&B Code, 2016. The order has been passed in the month of January, 2020 and now we are in the month of January, 2021. It is also important to note that the Apex Court in the judgment referred supra by the learned counsel for the respondents held that in fact, no criminal proceedings is covered under Section 14 of I&B Code, 2016.

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Learned counsel appearing for the petitioners brought to the notice of this Court the recent judgment of the Apex Court and would contend that the petitioners are also not disputing the fact of initiation of the criminal proceedings and also not disputing the liability, but his main contention is in view of the recent judgment of the Apex Court, wherein it has been held that the proceeding under Section 138 of NI Act is also covered, though it was earlier held that the I&B Code does not cover Section 138 proceedings.

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Learned counsel also brought to the notice of this Court para No.65 of the said judgment, wherein it is stated that Section 33(5) of the I&B Code, 2016 is analogous to Section 14(1)(a) and extracted Section 33(5) of the Code. It is also important to note that the Apex Court has discussed in detail with regard to invoking of Section 138 of NI Act, wherein it has been held that Section 14 of the I&B Code, 2016 also comes within the purview of Section 138 of NI Act, but restricted its scope in respect of only Corporate Debtors. In para No.77, it has been held that as far as Directors/persons in management or control of the Corporate Debtor are concerned, a Section

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138/141 proceeding against them cannot be initiated or continued without the Corporate Debtor.

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The Apex Court dealt with the principles laid down in

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the case of ANEETA HADA v. GODFATHER TRAVELS & TOURS (P) LTD., reported in (2012) 5 SCC 661 and held that the proceeding against the Directors cannot be initiated or continued without the Corporate Debtor because Section 141 of the NI Act speaks of persons in charge of, and responsible to the Company, for the conduct of the business of the Company, as well as the Company. The Apex Court referring to all these paragraphs held that since the Corporate Debtor would be covered by the moratorium provision contained in Section 14 of the I&B Code, 2016, 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 lnsolvency Resolution Process are interdicted, what is stated in para Nos.51 and 59 in Aneeta Hada (supra) would then become applicable. The legal impediment contained in Section 14 of the I&B Code, 2016 would make it impossible for such proceedings to continue or be instituted against the

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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 NI Act. This being the case, it is clear that the moratorium provision contained in Section 14 of the I&B Code, 2016 would apply only to the Corporate Debtor, the natural persons mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of the NI Act.

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The Apex Court in detail discussing the same held that Section 138/141 proceedings against the Corporate Debtor is covered by Section 14(1)(a) of the I&B Code, 2016 and allowed the appeal. However, Section 138/141 proceedings in this case will continue both against the Company as well as the Appellants for the reason given by them in para No.77 above as well as the fact that insolvency resolution process does not involve a new management taking over. It is also observed that the moratorium has come to an end in the case the Apex Court also discussed with regard to the Scope of Section 138 in Crl.A.

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and held that the moratorium provisions not extend to the persons other than the Corporate Debtor and appeal stands dismissed.

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Having perused the principles laid down in the judgment referred supra and also the facts of the present cases on hand, it is clear that the subscribers of the Chit Fund have initiated the proceedings under Section 138 of the NI Act and the material available on record also discloses that one of the subscribers invoked the I&B Code, 2016, wherein moratorium order has been passed under Section 14 of the I&B Code, 2016 and the petitioners' counsel also produced the documents for having appointed a liquidator in respect of the Company. This Court has already discussed the principles laid down in para No.77 of the recent judgment of the Apex Court in P.Mohanraj ’s case, wherein it has been discussed in detail the judgment of Aneeta Hada and held that the legal impediment contained in Section 14 of the I&B Code, 2016 would make it impossible for such proceedings to continue or to be initiated against the Corporate Debtor. Thus, for the period of moratorium, since no Section 138/141 proceeding can continue or shall be initiated

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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 NI Act. Hence, Section 14 of the I&B Code, 2016 would apply only to the Corporate Debtor. The natural persons mentioned in Section 141 continuing to be statutorily liable under the Chapter XVII of the NI Act and in conclusion it is held that Section 138/141 proceedings, in the case, will continue both against the Company as well as the appellants for the reasons given by the Apex Court in para No.77 as well as the fact that the insolvency resolution process does not involve a new management taking over.

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In view of the principles laid down in the judgment, it is crystal clear that Section 14 of the I&B Code, 2016 would apply only to the Corporate Debtor and hence, the very contention of the petitioners that the judgment of the Apex Court would come to the aid of the petitioners herein cannot be accepted.

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