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DIPANKAR DATTA, PRASHANT KUMAR MISHRA
Shashankbhai Jayantibhai Shah – Appellant
Versus
HDFC Bank ltd. – Respondent
| Table of Content |
|---|
| 1. conviction under section 138 of the n.i. act (Para 1 , 5 , 6) |
| 2. distinction between corporate insolvency and personal liabilities (Para 12 , 16) |
| 3. personal liability persists despite corporate liquidation (Para 14 , 18 , 19) |
| 4. appellant granted opportunity to make payment (Para 20 , 21 , 22) |
ORDER :
1. The appellant was convicted by the Additional Chief Metropolitan Magistrate, NIA Court No.30, Ahmedabad[Magistrate], vide judgment and order dated 03rd April, 2017, in a case registered under the provisions of Section 138 of the Negotiable Instruments Act, 1881[N.I. Act], for dishonour of a cheque. He was sentenced to undergo imprisonment for two years and to pay Rs.2,50,00,000/- (Rupees two crore fifty lakh) as compensation.
2. An appeal was carried from the said judgment and order by the appellant before the Sessions Court at Ahmedabad[sessions court].
3. During the pendency of the appeal, a petition came to be admitted by the National Company Law Tribunal, Ahmedabad against a company. The appellant happens to be one of the Directors of the company.
4. By an order dated 19th March, 2018, the National Company Law Tribunal[NCLT] passed an order for liquidation of the
The court ruled that proceedings under Section 138 of the NI Act are penal and cannot be stayed by the interim moratorium under Section 96 of the IBC, affirming the distinction between criminal and c....
The moratorium under the Insolvency and Bankruptcy Code does not protect individuals from criminal liability under the Negotiable Instruments Act for cheque dishonour.
The moratorium under the IBC does not protect directors from criminal liability under Section 138 of the N.I. Act, as these proceedings are distinct from civil recovery actions.
Individual directors remain liable for dishonoured cheques even after a corporate debtor enters insolvency, as personal criminal liability under the NI Act persists irrespective of corporate status.
IBC moratorium applies solely to corporate debtor, not shielding directors from Section 138 NI Act criminal proceedings, which continue independently despite company liquidation.
The interim moratorium under the Insolvency and Bankruptcy Code does not protect individuals from criminal liability for dishonouring cheques under the Negotiable Instruments Act.
The moratorium under the Insolvency and Bankruptcy Code does not protect individuals who are directors or guarantors of a corporate debtor from criminal proceedings under the Negotiable Instruments A....
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