Allowed

M/S. Vaasan Health Care (P) Ltd. v. M/S. Sree Gokulam Chits and Finance

Madras HC17 Oct 2024CRL OP/20309/2024

Case brief

AI extract

What is this about?

The High Court allowed quashing petitions filed by corporate debtors in insolvency proceedings, holding that Section 32A of the IBC bars prosecution for prior liability after resolution plan approval. However, the court clarified that individual directors remain prosecutable if they had knowledge of cheque issuance.

What did the court decide?

Criminal proceedings C.C.Nos.5806 & 5807 of 2018 against the petitioners/1st accused are quashed; prosecution against Directors continues.

M/S. Vaasan Health Care (P) Ltd. Vs M/S. Sree… — Insolvency and Bankruptcy | Madras HC (2024)

¶1

Crl.O.P.Nos.20309 & 20311 of 2024

¶2

IN THE HIGH COURT OF JUDICATURE AT MADRAS

¶3

DATED : 17.10.2024

¶4

CORAM

¶5

THE HONOURABLE DR.JUSTICE G.JAYACHANDRAN

¶6

Crl.O.P.Nos.20309 & 20311 of 2024 & Crl.M.P.Nos.11758 & 11759 of 2024

¶7

Crl.O.P.No.20309 of 2024

¶8

M/s.Vaasan Health Care (P) Limited alias M/s.Vasan Healthcare Pvt.Ltd, Rep. by Mr.Vimal Chandrasekran, Head Human Resources, No.15/A, First Cross, Thillai Nagar Main Road, Tiruchirapalli – 600 018. Now having office at: No.120A, Bazaar Road, Saidapet, Chennai – 600 015. ... Petitioner/1 st Accused /versus/

¶9

M/s.Sree Gokulam Chits & Finance Co., (P) Limited.

¶10

Represented by Co-ordination Manager, Mr.N.K.Shanmugam, Sree Gokulam Towers, No:66, Arcot Road, Kodambakkam, Chennai – 600 024. ... Respondent/Complainant

¶11

Prayer: Criminal Original Petition is filed under Section 482 of Cr.P.C and Section 528 of BNSS, pleased to call for the records quash the proceedings in C.C.No.5807 of 2018 on the file of the Hon'ble Learned Fast Track – III, Metropolitan Magistrate at Saidapet, Chennai against the petitioner/1 st accused.

¶12

1/5

¶13

https://www.mhc.tn.gov.in/judis

¶14

Crl.O.P.Nos.20309 & 20311 of 2024

¶15

For Petitioner : Mr.G.Gautham Ram Vittal

¶16

For Respondent : Mr.P.Rakesh Kumar

¶17

Crl.O.P.No.20311 of 2024

¶18

¶19

... Petitioner/1 st Accused /versus/

¶20

M/s.Sree Gokulam Chits & Finance Co., (P) Limited. Represented by Co-ordination Manager, Mr.N.K.Shanmugam, Sree Gokulam Towers, No.66, Arcot Road, Kodambakkam, Chennai – 600 024.

¶21

... Respondent/Complainant

¶22

Prayer: Criminal Original Petition is filed under Section 482 of Cr.P.C and Section 528 of BNSS, pleased to call for the records quash the proceedings in C.C.No.5806 of 2018 on the file of the Hon'ble Learned Fast Track – III, Metropolitan Magistrate at Saidapet, Chennai against the petitioner/1 st accused.

¶23

For Petitioner : Mr.G.Gautham Ram Vittal

¶24

For Respondent : Mr.P.Rakesh Kumar

¶25

https://www.mhc.tn.gov.in/judis

¶26

2/5

¶27

Crl.O.P.Nos.20309 & 20311 of 2024

¶28

COMMON ORDER

¶29

The petitioners herein are the Corporate Debtors which is the subject matter of the Insolvency and Bankruptcy Code proceedings. The cheque issued after appointment of Resolution Professional returned for insufficiency of fund. Hence along with the Company under Resolution proceedings, the Directors were prosecuted under Section 138 of N.I Act and case is pending in C.C.Nos.5806 & 5807 of 2018 on the file of Fast Track-III, Metropolitan Magistrate, Saidapet, Chennai.

¶30

2. The Learned Counsel for the petitioners submits that after initiating Resolution Professionals under IBC, the affairs of the Company vest with Resolution proceedings and the Company cannot be held liable.

¶31

3. In support of his argument, the Learned Counsel for the petitioners rely upon the dictum laid down by the Hon'ble Supreme Court in Ajay Kumar Radheyshyam Goenka -vs- Tourism Finance Corporation of India Ltd reported in 2023 SCC Online SC 26 . The law laid down by the Hon'ble Supreme Court clearly holds that the Corporate Debtor cannot be

¶32

3/5

¶33

https://www.mhc.tn.gov.in/judis

¶34

Crl.O.P.Nos.20309 & 20311 of 2024

¶35

prosecuted for prior liability after the approval of the Resolution Plan in view of Section 32 A of IBC.

¶36

4. Hence, these Criminal Original Petitions are allowed. The complaint in C.C.Nos.5806 & 5807 of 2018 on the file of Fast Track Court-III, Metropolitan Magistrate, Saidapet, Chennai against the petitioners/1 st accused alone are hereby quashed. It is made clear that the prosecution as against the Directors, who are in-charge of the affairs of the company and had knowledge of the issuance of cheques are not immuned under Section 32A of IBC and therefore, the prosecution against them shall continue. Consequently, connected Miscellaneous Petitions are closed.

¶37

17.10.2024 Index : Yes/No Neutral Citation : Yes/No bsm To:- 1. The Learned Fast Track – III, Metropolitan Magistrate at Saidapet, Chennai.

¶38

4/5

¶39

https://www.mhc.tn.gov.in/judis

¶40

Crl.O.P.Nos.20309 & 20311 of 2024

¶41

Dr.G.JAYACHANDRAN,J.

¶42

bsm

¶43

Crl.O.P.Nos.20309 & 20311 of 2024

¶44

17.10.2024

¶45

5/5 https://www.mhc.tn.gov.in/judis

M/S. Vaasan Health Care (P) Ltd. v. M/S. Sree Gokulam Chits and Finance

Case brief

What is this about?

What did the court decide?

M/S. Vaasan Health Care (P) Ltd. v. M/S. Sree Gokulam Chits and Finance

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Shirley Salome Vs S.Durga

M/S. Manpuria Agro Products Private Limited Vs M/S. Kotak Mahindra Bank Limited.

Siva Vs the Deputy Superintendent of Police

Aravind Subramaniyan Vs the State Rep by

M/S. Chettinad Cement Corporation Pvt. Ltd. Vs the Tamilnadu Pollution Control Board Rep by

Vetrivel Vs the State Rep by