Section 14 of the Code states that after declaration of the moratorium no legal action can be maintained against the Corporate Debtor. What will be your answer when: Criminal action under section 138 of NI Act filed befo

Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016, prohibits the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority. The question arises here is whether the order of moratorium will cover a criminal proceeding under Section 138 of the Negotiable Instruments Act, 1881, which provides for imprisonment for a term which may extend to three years or with fine which may extend to twice the amount of cheque or with both. Imposition of the fine cannot held to be a money claim or recovery against the Corporate Debtor. Same way order of imprisonment, if passed by the court of competent jurisdiction on the Directors, is not covered under Section 14 of the Code. In fact no criminal proceeding is covered under Section 14 of the Code. Hence, filing of criminal complaint under section 138 of the Negotiable Instruments Act, 1881 either before or after the declaration of moratorium under section 14 of the Code will have no effect of moratorium.