# In the matter of Tayal Cotton Pvt Ltd Vs State of Maharashtra & Ors Criminal Writ Petition No. 1437-2018

> HC judgment dated 2018-08-06. Citation: TCN-2018-HC-00010. Tayal Cotton Pvt. Ltd. filed a complaint under Section 138 of the Negotiable Instruments Act…

- **Court:** HC
- **Order date:** 6 Aug 2018
- **Citation:** TCN-2018-HC-00010
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-chandigarh-bench/tayal-cotton-pvt-ltd-vs-state-of-maharashtra-ors-criminal-writ-petition-no-1437-425101ca

## Summary

### Background

Tayal Cotton Pvt. Ltd. filed a complaint under Section 138 of the Negotiable Instruments Act against Aegan Industries Private Limited and its directors (respondents 2 to 7) regarding a dishonored cheque of Rs. 15,58,612 issued towards a civil liability. The Magistrate issued process under Section 204 of the Code of Criminal Procedure. Respondents 2 to 7 challenged this order by filing a Criminal Revision. Meanwhile, respondents 2 to 7 initiated insolvency proceedings, and the National Company Law Tribunal (NCLT) issued an order prohibiting the institution or continuation of proceedings against the corporate debtor. Respondents then requested the Criminal Revision to be stayed, which was allowed by the Additional Sessions Judge. The petitioner, Tayal Cotton, challenged

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## Facts

Tayal Cotton Pvt. Ltd. (the petitioner) filed a complaint under Section 138 of the Negotiable Instruments Act against Aegan Industries Private Limited (respondent no. 2) and its directors (respondents 3 to 7) due to the dishonor of a cheque amounting to Rs. 15,58,612. The cheque was issued by the respondents towards the discharge of a civil liability. The Magistrate issued process under Section 204 of the Code of Criminal Procedure. Respondents 2 to 7 then initiated insolvency proceedings and obtained a moratorium order from the NCLT, prohibiting the institution or continuation of suits or proceedings against the corporate debtor. Based on this moratorium, the respondents sought a stay of the criminal revision they had filed against the Magistrate's order. The

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## Issues and analysis

### Issue 1: Whether the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 applies to …

**Ratio:** The principle of ejusdem generis dictates that general words following specific words are

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**Reasoning:** The court reasoned that Section 14 of the IBC, when interpreted using the principle of

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**Interpretation:** Section 14 of the IBC should be interpreted narrowly to apply only to civil

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**Application:** Applying the principle of ejusdem generis and the reasoning from the Indorama

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## Parties

- **Judges:** MANGESH S.…
- **Appellants:** Tayal Cotton Pvt.…
- **Respondents:** Aegan Industries…; The State of…

## Timeline

- **2016-01-01 — Complaint…**: Tayal Cotton Pvt. Ltd. filed a complaint under Section 138 of the Negotiable Instruments…
- **2016-01-01 — Criminal Case…**: The complaint was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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