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Madras High CourtCRL OP/28447/2009allowed

Rajeswaran Samuel v. M/S.Barclays Bank Plc

2017-03-14Honourable Mr Justice M.V. Muralidaran5 pages

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 15.03.2017

CORAM

THE HONOURABLE MR.JUSTICE M.V.MURALIDARAN Crl.O.P No.28447 of 2009 and M.P.No.1 of 2009 Rajeswaran Samuel ... Petitioner vs.

M/s.Barclays Bank PLC No.15/2, South Leith Castle Street, Foreshore Estate, Pattinapakkam, Chennai - 600 028.

Represented by its Associate Legal Manager, Mr.Manish Xavier ... Respondent Prayer: Criminal Original Petition filed under Section 482 of Criminal Procedure Code, to call for the records in C.C.No.10461 of 2009 pending on the file of the learned XXIII Metropolitan Magistrate Court, Saidapet, Madras and quash the same. For Petitioner : M/s.M.Vidya For Respondent : No Appearance

ORDER

The petitioner has filed the present Criminal original petition invoking the inherent power of this Court under Section 482 of CrPC to quash the private complaint in CC.No.10461 of 2009 under Section 138 to 142 of Negotiable Instruments Act ( herein after referred as NI Act).

2.It is the case of the petitioner is that the above complaint came to be filed against him by the respondent herein under Section 138 to 142 of Negotiable Instruments Act claiming that the petitioner has failed to honour the subject Cheque issued towards his liability of Sum of Rs.6,114/- to partly discharge a personal loan obtained from the respondent. 3.The case as projected in the complaint is that the petitioner having entered a personal loan agreement with the

respondent herein had issued a Cheque bearing No.672688 dated 04.05.2009 drawn on ICICI bank towards part discharge of the said loan for a sum of Rs.6,114/-. When the Subject cheque was presented for encashment by the complainant before his banker namely HDFC Bank Ltd, Delhi and the same came to be dishonored for want of funds on 11.05.2009. Thereupon the respondent issued a legal Notice on 27.05.2009 and the notice was duly received by the petitioner. However as there was no response from the petitioner, the respondent herein filed the above private complaint in CC.No.10461 of 2009 on the file of XXIII Metropolitan Magistrate Court, Saidapet, Chennai. 4.According to the petitioner, he is an insolvent and his insolvency was declared in I.P.No.52 of 2009 by this Hon'ble Court vide an order dated 26.03.2009.

Originally the petitioner filed I.P.No.52 of 2009 under the Presidency Towns Insolvency Act 19 of 2009 and this Hon'ble Court was pleased to adjudicate him as an insolvent and was also pleased to order interim protection from arrest in respect of the petition schedule debts in Application No.119/2009 wherein the respondent was also arrayed as one of the creditors. In furtherance of order of adjudication, the Official Assignee took charge of the assets and liabilities of the petitioner and thereafter filed the schedule of affairs as per section 25 of the Insolvency act, wherein notice was ordered by this Hon'ble Court to the petitioner's creditors including the respondent herein. The said notice remained served on the respondent herein.

However he failed to appear and prove his debts to the official assignee in the insolvency proceedings on the file of this Hon'ble court. That apart the petitioner by way of reply to the earlier notice dated 11.4.2009 of the respondent herein, has sent a reply notice dated 21.04.2009 noticing the respondent with regard to the adjudicating the order and the interim protection order made in I.P.No.52 of 2009 by this Court.

5.However, the respondent without addressing his grievance under Insolvency Act before the Official Assignee, but to rope the petitioner herein with criminal prosecution has issued a notice dated 27.05.2009 under Section 138 of Negotiable Instruments Act, 1881 claiming that the cheque (obtained blank from the petitioner at the time of granting loan) for Rs.6,114/- dated 04.04.2009 was returned dishonour.

6.Thus the petitioner with plea of the filing of above complaint as an abuse of process of law, seeks to quash the complaint filed by the respondent.

7.I heard M/s.M.Vidya, learned counsel for the petitioner

and perused the entire records. There is no representation on behalf of the respondent.

8.The records revealed that the petitioner has filed an Insolvency petition in I.P.No.52 of 2009 before this Court, for adjudication as an Insolvent under the Presidency Towns Insolvency Act, 1909 and this Court on appraisal of material available before it vide an order dated 26.03.2009, had passed an order of interim protection and also ordered notice to the respondent herein in the insolvency application. Further record disclose that already a notice is also been served by the Official Assignee and as well as the petitioner herein vide a notice dated 21.04.2009 putting the respondent on notice regarding the adjudication order and interim protection order in the insolvency proceedings.

9.From the dates and events of the case on hand, this Court is able to see that the petitioner herein has informed the respondent by an notice dated 21.04.2009 about the insolvency proceedings. However, the respondent despite of the knowledge of the insolvency proceedings has chosen to deposit the cheque on 07.05.2009. It is needless to say that in case of insolvency proceedings, there is a bar to commence legal proceedings except with the leave of the Insolvency Court in terms of Section 17 of the Insolvency Act.

10.Further the schedule of affair filed as per section 25 of the Insolvency Act reveal that the property of the petitioner is now vested with the official assignee and the same is divisible amongst the creditors including the respondent herein. 11.Moreover the respondent had knowledge about the Insolvency petition in terms of Section 15 and Section 24 of the Insolvency Act. In view of the above said fact this court is of the considered opinion that the respondent ought to have opted to make his claim under section 69 of the Insolvency Act before the Insolvency Court. However by not doing so, the respondent has come up with the above complaint under Negotiable Instruments Act. It is needless to say that when the insolvency proceedings filed by the petitioner is half the way and there is an interim order and the property is also under the custody of official assignee, if any undue preference would have been given in the case of the respondent, then it would amount to an offence under Section 103 of the Insolvency Act.

12.At this juncture it is useful to extract Section 17 of The Presidency Towns Insolvency Act, 1909 hereunder:

17. Effect of order of adjudication:- On the making of an order of adjudication, the property of the insolvent wherever situate shall vest in the official assignee and shall become divisible among his creditors, and thereafter, except as directed by this Act, no creditor to whom the insolvent is indebted in respect of any debt provable in insolvency shall, during the pendency of the insolvency proceedings, have any remedy against the property of the insolvent in respect of the debt or shall commence any suit or other legal proceeding except with the leave of the Court and on such terms as the Court may impose:

Provided that this section shall not affect the power of any secured creditor to realize or otherwise deal with his security in the same manner as he would have been entitled to realize or deal with it if this section had not been passed.

13.Admittedly in the case on hand an order of adjudication is passed by this Court and the property is now vested with official assignee. If there is no order made under Section 17 of the Presidency Towns Insolvency Act, 1909, then the respondent would have right or entitled to proceed with the complaint. Whereas from the negative language used that "no creditor to whom the insolvent is indebted in respect of any debt provable in insolvency shall, during the pendency of the insolvency proceedings, have any remedy against the property of the insolvent in respect of the debt or shall commence any suit or other legal proceeding except with the leave of the Court", it is needless to say that such bar is an absolute one. 14.

Thus above factual matrix involved in the case demonstrates that the respondent despite of due knowledge of the pendency of the Insolvency proceedings and knowledge of an order made under Section 17 of the Presidency Towns Insolvency Act, 1909, besides the receipt of notices both from the official assignee and the petitioner herein has not turned up to redress his grievance before the official assignee appointed under Insolvency Act by this Court. Therefore this Court in view of the absolute bar contained in Section 17 of the Insolvency Act deems fit to quash the above complaint as not maintainable and an abuse of process of law. However it is always open to the respondent to file appropriate applications before the official assignee, if he is advised so.

15.In the result, the present Criminal Original Petition succeeds and accordingly the complaint in C.C.No.10461 of 2009 on the file of the learned XXIII Metropolitan Magistrate, Saidapet, Chennai is quashed as not maintainable and an abuse of process of law. Consequently, connected miscellaneous petition is closed.

Sd/- Assistant Registrar(CCC) //True Copy// Sub Assistant Registrar vs To The XXIII Metropolitan Magistrate Court, Saidapet, Chennai.

The section Officer criminal section, High Court Madras. +1cc to Ms.M.Vidya, Advocate, S.R.No.16167 Crl.O.P.No.28447 of 2009 and M.P.No.1 of 2009 GMR(CO) RRK(20/02/2018)