Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(SC) 588

SUPREME COURT OF INDIA
J.B. PARDIWALA, R. MAHADEVAN, JJ.
Rakesh Bhanot - Appellant
Versus
M/s.Gurdas Agro Pvt. Ltd. - Respondents
Criminal Appeal No. 1607 of 2025(Arising out of SLP (Crl.) No. 6087 OF 2023)
With
Sandeep Gupta - Appellant(S)
Versus
Shri Ram Steel Traders And Another - Respondent(S)
Criminal Appeal No. 1608 OF 2025 (Arising out of SLP (Crl.) No. 9316 OF 2023)
With
Rakesh Bhanot - Appellant(S)
Versus
M/s.Gurdas Agro Pvt. Ltd. - Respondent(s)
Criminal Appeal No. 1609 of 2025 (Arising out of SLP (Crl.) No. 12328 OF 2023)
With
Rakesh Bhanot - Appellant
Versus
M/s.Gurdas Agro Pvt. Ltd. - Respondent(s)
Criminal Appeal No. 1610 of 2025 (Arising out of SLP (Crl.) No. 12327 OF 2023)
With
Rakesh Bhanot - Appellant(S)
Versus
M/s.Gurdas Agro Pvt. Ltd. - Respondent(S)
Criminal Appeal No. 1611 OF 2025 (Arising out of SLP (Crl.) No. 12329 OF 2023)
With
Sanjeev Narula - Appellant(S)
Versus
M/s. Elkay International Ltd. - Respondent(S)
Criminal Appeal No. 1612 OF 2025 (Arising out of SLP (Crl.) No. 6835 OF 2024)
With
M/s.Shiva Shakti Grains (India) Pvt.Ltd & Anr. Etc. - Appellant(S)
Versus
M/s.Kaur Chand Munish Kumar Etc. - Respondent(S)
Criminal Appeal No(S). 1613-1649 of 2025 (Arising out of SLP (Crl.) Nos. 9104 – 9140 OF 2024)
With
Vijay Chetan Lilaramani & Another - Petitioner(S)
Versus
Union Of India And Others - Respondent(S)
W.P. (C) NO.469 OF 2024
With
Ashok B Jeswani And Another Etc. - Appellant(s)
Versus
M/s.Redington India Limited - Respondent(S)
Criminal Appeal Nos. 1650-1652 OF 2025 (Arising out of SLP (Crl.) NOS. 272-274 of 2025)
With
Jitender Singh Sodhi And Another Etc. - Appellant(s)
Versus
Deputy Commissioner Of Income Tax And Another Etc. - Respondent(S)
Criminal Appeal Nos. 1653-1688 OF 2025 (Arising out of SLP (Crl.) NOS. 4822-4857 of 2025)
With
Yogesh Jogindernath Mehra And Anr. - Appellant(S)
Versus
State Of Maharashtra And Anr. - Respondent(S)
Criminal Appeal No. 1689 of 2025 (Arising out of SLP (Crl.) No. 15852 OF 2024)
With
Yogesh Jogindernath Mehra And Anr. - Appellant(S)
Versus
State Of Maharashtra And Anr. - Respondent(S)
Criminal Appeal No. 1690 of 2025 (Arising out of SLP (Crl.) No. 15813 OF 2024)
With
Yogesh Jogindernath Mehra And Anr. - Appellant(S)
Versus
State Of Maharashtra And Anr. - Respondent(S)
Criminal Appeal No. 1691 of 2025 (Arising out of SLP (Crl.) No. 15933 OF 2024)
With
Yogesh Jogindernath Mehra And Anr. - Appellant(S)
Versus
State Of Maharashtra And Anr. - Respondent(S)
Criminal Appeal No. 1692 OF 2025 (Arising out of SLP (Crl.) No. 15905 OF 2024)
Decided on : 01-04-2025

Advocates appeared:
For the Petitioner(s): Dr. Yusuf Iqbal Yusuf, Adv. Mr. Bhavya Sethi, Adv. Ms. Gyanika Kochar, Adv. Mr. Mohd. Abid Sheikh, Adv. Ms. Neelam Singh, AOR Mr. R K Rathore, Adv. Mr. Jawahar Lal, Adv. Mr. Danish Saifi, Adv. Mr. Subramaniam S, Adv. Mr. Naman Dwivedi, Adv. Mr. Shafik Ahmed, Adv. Mr. Bhaskar Sundaram, Adv. Mr. P.R. Sreejith, Adv. Ms. Pallavi Anand, Adv. Mr. V. Elanchezhiyan, AOR Mr. Abhimanyu Tewari, AOR Mr. Siddhant Saroha, Adv. Mr. Viren Sibal, Adv. Mr. Prashant Katara, Adv. Mr. Soin Khan, Adv. Mr. Jaydip Pati, AOR Mr. Nitish Kumar Rai, Adv. Ms. Anushruti Tripathi, Adv. Ms. Anita, Adv. Mr. Chritarth Palli, AOR Mr. Nakul Mohta, Adv. Mr. Puneet Pathak, Adv. Mr. Amulya Upadhyay, Adv. Mr. Ayush Kashyap, Adv. Mr. Shashank Khurana, Adv. Ms. Misha Rohatgi, AOR Mr. Nitin Setia, Adv. Mr. Abhishek Baid, Adv. Mr. Mohit Kumar Bafna, Adv. Mr. Praneet Das, Adv. Mr. Anup Jain, Adv. Mr. Ashok Kumar Jain, Adv. For M/s.Expletus Legal, AOR
For the Respondent(s): Mr. Shailendra Babbar, Adv. Mr. Devendra Kumar Shukla, AOR Mr. Avinash Das, Adv. Mr. Rahul Kumar, Adv. Mr. Rishi Kapoor, Adv. Ms. Deboleena Datta, Adv. Ms. Maitri Goal, Adv. Mr. Ashish Kumar Upadhyay, AOR Mr. Atul Mangla, Adv. Mr. Ashish Pandey, AOR Mr. Inderjeet, Adv. Mr. Shubham Saxena, Adv. Mr. Prateek Rai, Adv. Mr. Ashutosh Bhardwaj, Adv. Mr. Pushkar Dwivedi, Adv. Mr. Anmol Goyal, Adv. Mr. Akshit Chauhan, Adv. Ms. S Janani, Sr. Adv. Ms. Sharika Rai, Adv. Mr. Deepak Goel, AOR Ms. Alka Goyal, Adv. Ms. Archana Preeti Gupta, Adv. Mr. Aditya Krishna, Adv. Mr. Siddharth Dharmadhikari, Adv. Mr. Aaditya Aniruddha Pande, AOR Mr. Md. Naushad Alam, AOR Mr. Raghav Vij, Adv. Mr. Suraj Kumar Jha, Adv. Ms. Sakshi Tiwari, Adv. Mr. Pratham Malik, Adv. Mr. Palash Singhai, AOR Mr. S. Vinay Ratnakar, AOR Mr. Apoorva Misra, Adv. Mr. Manish Gusain, Adv. Mr. Ankit Roy, AOR Dr. Pankaj Garg, Adv. Mr. Milind Garg, Adv. Ms. Nikita Garg, Adv. Mr. Yaksh Garg, Adv. Mr. Suvidutt M.S., AOR Dr. Pankaj Garg, Adv. Mr. Milind Garg, Adv. Ms. Nikita Garg, Adv. Mr. Yaksh Garg, Adv. Mrs. Saumya Jain, Adv. Ms. Yashna Ahuja, Adv. Ms. Atulika Ghawana, Adv. Ms. Shambhavi Sharma, Adv. Ms. Paromita Majumdar, AOR Ms. Minakshi Vimal, Adv. Ms. Bhavana Jhakhar, Adv. Ms. Astha Tyagi, AOR Mr. Akhil Sachar, Adv. Ms. Sunanda Tulsyan, Adv. Ms. Henna George , AOR Ms. Purti Gupta, AOR Ms. Henna George, Adv.

The moratorium under the Insolvency and Bankruptcy Code does not protect individuals from criminal liability under the Negotiable Instruments Act for cheque dishonour.

Headnote:(A) Criminal Procedure Code, 1973 - Section 482 - Negotiable Instruments Act, 1881 - Sections 138 and 141 - Insolvency and Bankruptcy Code, 2016 - Sections 94, 96, and 101 - Appeals against High Court orders dismissing petitions to stay proceedings under Section 138 of the N.I. Act during insolvency proceedings - The court held that the moratorium under Section 96 IBC does not extend to criminal proceedings under Section 138 N.I. Act, as these are distinct from civil recovery actions. (Paras 4, 12, 17)

(B) Legal principles - The moratorium under IBC is intended to protect debtors from civil claims but does not shield individuals from criminal liability for cheque dishonour. (Paras 12, 17)

(C) The court emphasized that allowing individuals to evade prosecution under Section 138 by invoking the moratorium would undermine the integrity of commercial transactions. (Paras 17, 20)

Facts of the case:
Multiple appeals were filed against High Court orders that dismissed petitions to stay Section 138 proceedings under the N.I. Act during the pendency of insolvency proceedings initiated under Section 94 IBC. The appellants argued that the moratorium should apply to their criminal liability.

Findings of Court:
The court found that the moratorium under IBC does not apply to criminal proceedings under Section 138 of the N.I. Act, affirming the High Court's dismissal of the petitions.

Issues: Whether the proceedings under Section 138 of the N.I. Act should be stayed due to the moratorium under Section 96 IBC.

Ratio Decidendi: The court ruled that the moratorium under IBC is limited to civil claims and does not extend to criminal liability, thus upholding the integrity of the N.I. Act.

Result: Appeals and writ petition dismissed.

Judgement Key Points

Key Points: - The moratorium under IBC does not extend to criminal proceedings under NI Act Section 138/141. (!) (!) - Moratorium provisions (Sections 96 and 101) protect only civil/debt-related actions, not penal actions; criminal liability persists for individuals. (!) (!) - Proceedings under Section 138/141 NI Act can continue against individuals even if insolvency proceedings are pending or moratorium is in place for corporate debtors. (!) (!)

Question 1?

Question 2?

Question 3?

JUDGMENT :

R. MAHADEVAN, J.

Leave granted.

2. Since the facts and issues involved in all these cases are common, they are clubbed together and disposed of, by this common judgment.

3. All these appeals are filed against the orders passed by different High Courts, which dismissed the petitions filed under Section 482 of the Criminal Procedure Code, 1973¹[For short, “Cr.P.C”] and thereby affirmed the orders passed by the trial Court rejecting the applications filed for staying the proceedings under Section 138 of the Negotiable Instruments Act, 1881²[For short, “N.I. Act, 1881”], sine die till the conclusion of the proceedings initiated under Section 94 of the Insolvency and Bankruptcy Code, 2016³[For short, “IBC”], before the National Company Law Tribunal. A writ petition has also been filed for declaration and direction that section 138 proceedings shall be deemed to be stayed during the operation of the moratorium period under section 96 IBC. The details of the cases are tabulated below:

Case No.	Name of the parties	Order impugned before this Court	Order impugned before the High Court
SLP(Crl) No.6087 of 2023	Rakesh Bhanot v. M/s. Gurdas Agro Pvt. Ltd	Order dated 23.3.2023 passed by the High Court of Punjab and Haryana, Chandigarh in CRM – M –37169/2022 (O&M)	Order dated 23.05.2022 passed by the Judicial Magistrate First Class, Bathinda in complaint No. COMA 1059/2019
SLP(Crl) No.9316 of 2023	Sandeep Gupta v. M/s. Sri Ram Steel Traders and another	Order dated 15.5.2023 passed by the High Court of Delhi at New Delhi, in Crl.M.C. No.381 of 2022	Order dated 03.12.2021 passed by the Metropolitan Magistrate Patiala House Courts, New Delhi, in CT No.12161/2018
SLP(Crl) No.12328 of 2023 SLP(Crl) No.12327 of 2023 SLP(Crl) No.12329 of 2023	Rakesh Bhanot v. M/s. Gurdas Agro Pvt. Ltd	Order dated 23.03.2023 passed by the High Court of Punjab and Haryana, Chandigarh in CRM – M – 59371/2022 (O&M) Order dated 07.02.2023 passed by the High Court of Punjab and Haryana, Chandigarh in CRM – M –39859/2022 (O&M) Order dated 23.03.2023 passed by the High Court of Punjab and Haryana, Chandigarh in CRM – M –39885/2022 (O&M)	Order dated 12.09.2022 passed by the Judicial Magistrate First Class, Bathinda in complaint No. COMA 89/2016 Order dated 23.05.2022 passed by the Judicial Magistrate First Class, Bathinda in complaint No. COMA 1060/2019 Order dated 23.05.2022 passed by the Judicial Magistrate First Class, Bathinda in complaint No. COMA 1061/2019
SLP(Crl) No.6835 of 2024 SLP (Crl) Nos. 9104 - 9140 of 2024	Sanjeev Narula v. M/s. Elkay International Ltd M/s. Shiva Shakti Grains (India) Pvt. Ltd and Another Etc. v. M/s.Kaur Chand Munish Kumar Etc.	Order dated 06.3.2024 passed by the High Court of Punjab and Haryana, Chandigarh in CRM – M – 9799/2024 (O&M) Order dated 12.03.2024 passed by the High Court of Punjab and Haryana, Chandigarh in CRM – M – 12807/2019 etc. Cases Referred	Order dated 18.01.2024 passed by the Judicial Magistrate First Class, Faridabad in complaint No. NACT– 719/2016. Complaint in No. NACT– 704/2017 dated 21.11.2017 as well as the summoning orders dated 14.09.2018 issued by the Judicial Magistrate First Class, Sri Muktsar Sahib and all consequential proceedings.
W.P(C) No. 469/2024	Vijay Chetan Lilaramani and another v. Union of India and others	(i)to declare that the proceedings under section 138 r/w 141 of the Negotiable Instruments Act, 1881, shall be covered under moratorium imposed by section 96 of the IBC or shall deemed to be stayed during operation of the moratorium under section 96 of the IBC; and (ii)to direct that the trial pending before the Additional Chief Metropolitan Magistrate, Ben