Arun Monga, J.

1. Petitioner seeks quashing of criminal complaint dated 17.10.2017, titled as "ICICI Bank v. M/s. Supreme Tex Mart Ltd. & Anr." filed by respondent Bank under section 138 of Negotiable Instruments Act. Consequential summoning order dated 06.01.2018 passed therein is also under challenge.

2. Impugned complaint was filed by respondent bank against petitioner/accused No. 2, a former director of accused No. 1-company. Complaint resulted out of dishonour of two collateral security cheques dated 15.08.2017 and 26.07.2017, for an amount of ` 10,78,419/- and ` 5,00,000/-, respectively. Cheques were issued on behalf of accused company M/s. Supreme Tex Mart Limited, in discharge of alleged outstanding of a term loan sanctioned by the bank.

3. The banker of the petitioner returned the cheques vide memo dated 24.08.2017 on account of "payment stopped by the drawer" instructions. Despite legal notice dated 01.09.2017, no payment was made, leading to the filing of impugned complaint. The trial Court, on the basis of preliminary evidence, summoned the accused company and the petitioner vide an order dated 06.01.2018.

4. The fundamental argument of learned counsel for the petitioner is that the petitioner cannot be prosecuted for dishonor of cheques, as the liability was that of Company and not of the petitioner as an individual. While taking this Court to the impugned complaint, he submits that there is no recital in the complaint (P/1) as to how the petitioner was responsible for the day to day affairs and management of the Company or otherwise personally responsible for an alleged debt of the company.

5. Para 3 to 5 of the impugned complaint contains material averments/allegations which read as under:-

"3. That the accused approached the complainant for the grant of financial facilities & as per his request, inducement & representation the loan was extended to him. The agreement bearing No. 151705000249 for loan for the said purpose was duly executed by him.

4. That at the time of the grant if the said amount the accused duly completed all the formalities and executed all the documents including the execution of the above stated agreement. It was also made clear to him that the said amount is to be repaid by him as per the terms of the agreement.

5. That the accused issued the following Cheques in order to pay a part of the amount outstanding against accused."

It is thus seen that there are no allegations qua the petitioner and/or any averment that he was/is responsible for the conduct of the business of the accused company and thus liable to be prosecuted in his individual capacity.

6. In the aforementioned context, learned counsel for the petitioner relies on a decision in case titled Rajeev Raj Kumar & Ors. v. State of Maharashtra & Anr. Criminal Application No. 02052 of 2018, Bombay High Court wherein, per him, in somewhat similar situation, prosecution of 138 complaint against the Directors of accused Company was quashed. Continuation thereof was held valid only against the accused Company. He submits that prior to filing of impugned complaint, Allahabad Bank had already initiated insolvency proceedings against the Company. Moratorium had been declared. Company did not thereafter have the option to pay its debts and/or settle/pay the amount qua the cheques. All the moveable and immoveable assets of the Company have been taken over under section 7 of the Insolvency and Bankruptcy Code (IBC), 2016 read with Rule 4 of the Insolvency and Bankruptcy(Application to Adjudicating Authority) Rule, 2016.

7. Per contra, learned counsel for respondent Bank strongly defends the impugned summoning order. He argues that process was rightly against the petitioner after duly relying material on record. No interference by this Court is thus called for to exercise jurisdiction under section 482 of Cr.P.C., 1973.

8. Heard learned counsel for the parties and perused the case file. I am of the opinion that there is merit in the contention of learned counsel for the petitioner. Given the facts of case read with allegations in the impugned complaint, as an individual Director, petitioner seems to have been wrongly fastened with criminal liability of accused company M/s. Supreme Tex Mart Ltd., particularly, after appointment of the Interim Resolution Professional and suspension of the directors under the IBC.

9. Before proceeding further, it would be apposite to reproduce some of the observations from Rajeev Raj Kumar case(supra), which in turn relies on an Apex Court judgment in S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and another 2005 (8) SCC 89 [LQ/SC/2005/943] . Speaking for Bombay High Court Vibha Kankanwadi, J. opined as under:-

"12. Now, turning towards the second point, it is to be noted that as regards accused Nos. 02 to 12, only at two places, same statement has been made by the complainant, that they are the directors of accused No. 01, who are incharge and responsible for the conduct of the affairs of the company. The complainant has not given what is the nomenclature and how each one of accused Nos. 02 to 12 is incharge. Admittedly, accused Nos. 02 to 12 are not the signatories to the disputed cheques. In fact, in para No. 05 of the complaint, the complainant has stated that accused Nos. 01 to 12 issued a cheque.....None of them i.e. accused Nos. 02 to 12 had issued that cheque but somebody else is the signatory to the cheque. This fact is also suppressed by the complainant. The learned Magistrate ought to have considered as to who is the signatory to the cheque and whether he is made an accused or not before proceeding to issue process against accused Nos. 02 to 12.

In N.K. Wahi's case (supra), the Hon'ble Supreme Court has relied on the decision in the case of S.M.S. Pharmaceuticals Ltd. v. Neeta Bhalla and another [ 2005 (8) SCC 89 [LQ/SC/2005/943] ], wherein it was held thus:-

"To sum up, there is almost unanimous judicial opinion that necessary averments ought to be contained in a complaint before a person can be subjected to criminal process. A liability under Section 141 of theis sought to be fastened vicariously on a person connected with a company, the principal accused being the company itself. It is a departure from the rule in criminal law against vicarious liability. A clear case should be spelled out in the complaint against the person sought to be made liable. Section 141 of thecontains the requirements for making a person liable under the said provision. That the respondent falls within the parameters of Section 141 has to be spelled out. A complaint has to be examined by the Magistrate in the first instance on the basis of averments contained therein. If the Magistrate is satisfied that there are averments which bring the case within Section 141, he would issue the process. We have seen that merely being described as a director in a company is not sufficient to satisfy the requirement of Section 141. Even a non-director can be liable under Section 141 of the. The averments in the complaint would also serve the purpose that the person sought to be made liable would know what is the case which is alleged against him. This will enable him to meet the case at the trial."

Further, taking into consideration the legal fiction that has been created in section 141 of the N.I. Act, in para 19 of the judgment, it has been held thus:-

"19. In view of the above discussion, our answers to the questions posed in the reference are as under:

(a) It is necessary to specifically aver in a complaint under Section 141 that at the time the offence was committed, the person accused was in charge of, and responsible for the conduct of business of the company. This averment is an essential requirement of Section 141 and has to be made in a complaint. Without this averment being made in a complaint, the requirements of Section 141 cannot be said to be satisfied.

(b) The answer to the question posed in sub-para (b) has to be in the negative. Merely being a director of a company is not sufficient to make the person liable under Section 141 of the. A director in a company cannot be deemed to be in charge of and responsible to the company for the conduct of its business. The requirement of Section 141 is that the person sought to be made liable should be in charge of and responsible for the conduct of the business of the company at the relevant time. This has to be averred as a fact as there is no deemed liability of a director in such cases.

(c) The answer to Question (c) has to be in the affirmative. The question notes that the managing director or joint managing director would be admittedly in charge of the company and responsible to the company for the conduct of its business. When that is so, holders of such positions in a company become liable under Section 141 of the. By virtue of the office they hold as managing director or joint managing director, these persons are in charge of and responsible for the conduct of business of the company. Therefore, they get covered under Section 141. So far as the signatory of a cheque which is dishonoured is concerned, he is clearly responsible for the incriminating act and will be covered under sub-section (2) of Section 141."

13. Therefore, taking into consideration the above said legal position, it was necessary for the complainant to specifically aver and demonstrate as to how each one of accused Nos. 02 to 12 were in charge and responsible for the conduct of the business of accused No. 01. Therefore, the order of issuance of process passed by the learned Magistrate cannot be allowed to be sustained."

10. I am in respectful agreement with the above view taken above by the learned Judge, which in turn, is based on lucid principles enunciated by Supreme Court in S.M.S. Pharmaceuticals Ltd., ibid. Going by contents and the allegations contained in the impugned complaint, continuation of prosecution against the petitioner in his capacity as Director of accused No. 1 Company in the instant case also is held to be bad in law.

11. Apart from above, even otherwise, it is not in dispute that before instituting the complaint, Allahabad Bank had initiated insolvency proceedings against the accused Company M/s. Supreme Tex Mart. Pursuant thereto, vide order dated 29.09.2017, followed by another dated 11.10.2017, learned NCLT had appointed Interim Resolution Professional. All the Directors including the petitioner/director were thus suspended from the accused company. The management and affairs of the Company had come to vest with Interim Resolution Professional (IRP). In the premise, there was no occasion with the Directors to get the offence compounded.

12. It is though not stated in the impugned complaint but on a query of this court, it transpires that petitioner had signed the cheques in question on behalf of the accused company. However, following the appointment of IRP, the petitioner was forthwith suspended to act as Director of the accused company and he was/is thus not in a position to pay or settle on behalf of the company. The primary liability of cheque bouncing in this case is of the accused drawer Company. All accounts are currently since under the control of a interim Resolution Professional, it would not be fair to impose liability on a suspended Director of the Company.

13. Under the Insolvency and Bankruptcy Code-2016, once an insolvency petition is "admitted", the resolution process gets initiated. The existing management automatically gets suspended. The Interim Resolution Professional takes over the operations of the company. Under Section 25 of IBC the Resolution Professional is under mandate to protect and preserve the assets of the 'corporate debtor company'. Subsequent thereto, the committee of creditor is required to submit a resolution plan for approval of the 'committee of creditors'. After such approval, the resolution plan is presented to the Adjudicating Authority. Resolution plan, if approved, is be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan.

14. In the premise, due to insolvency proceedings against the accused company and imposition of moratorium, two consequences arise, namely, (a) option to compound a cheque bounce is not available to its directors (erstwhile) and; (b) claims of the creditors have to be submitted before a committee of creditors. The primary liability in a cheque bounce case where cheque has been issued on behalf of the company is upon the drawer-Company. Though the accounts of the drawer company herein are under the control of a Resolution Professional but sword of liability qua cheque issued on behalf of company has been vicariously imposed on the suspended director/petitioner.

15. It is not out of place to mention here that NCLT, Chandigarh vide order dated 08.08.2018 (Annexure P-5) held that financial creditors against the corporate debtor(Supreme Tex Mart Limited), initiated the insolvency resolution process against the Company Supreme Tex Mart Limited. The petition was admitted on 29.09.2017, declaring moratorium in terms of Section 14 of the Code and by another order dated 11.10.2017, Mr. Bhupesh Gupta, Registered Resolution Professional was appointed as Interim Resolution Professional with necessary directions. The Interim Resolution Professional constituted a Committee of Creditors, comprising of 12 Financial Creditors. The respondent Bank/ICICI is also one of the members of committee of creditors. Accordingly, ICICI bank/complainant-respondent is taking parallel steps to recover its dues qua the cheque from the accused company under the IBC proceedings.

16. As an upshot of the discussion above, the impugned complaint and summoning order are set aside only qua the petitioner/director. Consequently, the complaint proceedings shall continue further against the Company/accused No. 1, in accordance with law.

17. Disposed of in above terms.