# In the matter of Catmoss Retail Pvt. Ltd.

> HC judgment dated 2024-02-07. Citation: TCN-2024-HC-00130. The application seeks a stay on proceedings initiated against the company under liquidation and its…

- **Court:** HC
- **Order date:** 7 Feb 2024
- **Citation:** TCN-2024-HC-00130
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/catmoss-retail-pvt-ltd-94c56fa3

## Summary

### Background

The application seeks a stay on proceedings initiated against the company under liquidation and its ex-management/director in various criminal courts in Delhi under Section 138 of the Negotiable Instruments Act, 1881, citing Sections 446 and 447 of the Companies Act, 1956.

## Facts

The company, M/s Catmoss Retail Pvt. Ltd., was ordered to be wound up on February 28, 2013 , and a Provisional Liquidator was appointed on March 27, 2014 , to take over its assets and records. Mr. Ashwani Chawla, an ex-management/director, filed an application (CO.APPL. 58/2024) seeking a stay on proceedings initiated against the company and himself in various criminal courts in Delhi. The application was filed under Sections 446 and 447 of the Companies Act, 1956, seeking to halt complaints instituted under Section 138 of the Negotiable Instruments Act, 1881. The applicant argued that all legal proceedings against the director after the winding-up order cannot continue without the leave of the High Court, especially since the Official Liquidator now holds all company

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## Issues and analysis

### Issue 1: Whether proceedings under Section 138 of the Negotiable Instruments Act, 1881, can continue against …

**Ratio:** Proceedings under Section 138 of the Negotiable Instruments Act, 1881, against a

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**Reasoning:** The court reasoned that previous decisions holding that Section 446(1) of the Companies

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**Interpretation:** The court interpreted 'suit' or 'other legal proceedings' in Section 446(1) of

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**Application:** In this case, since the company was ordered to be wound up on February 28,

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## Parties

- **Judges:** DHARMESH…
- **Appellants:** RE- M/S CATMOSS…
- **Respondents:** M/S CATMOSS…; Sangram Patnaik…; +10 more
- **Advocates:** For the applicant…; Shankari…; +9 more

## Timeline

- **February 28, 2013 — Winding-up…**: The company, M/s Catmoss Retail Pvt.…
- **March 27, 2014 — Provisional Liquidator…**: A Provisional Liquidator was ordered to take…

## 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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