Back
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
URMILA JOSHI-PHALKE
Yatendra Singh s/o Rajendra Singh Panwar – Appellant
Versus
Ganga Iron and Steel Trading Company Limited – Respondent
| Table of Content |
|---|
| 1. overview of factual background and allegations. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. arguments from applicants and non-applicant company. (Para 7 , 8 , 9) |
| 3. court's analysis of legal issues regarding the moratorium. (Para 10 , 11 , 12 , 20 , 21 , 22 , 29 , 30 , 32 , 36 , 39) |
| 4. legal provisions under the ibc and their applicability to the case. (Para 13 , 14) |
| 5. court's ruling on corporate liability under ibc and nia. (Para 18 , 26 , 28 , 33 , 34 , 42 , 43) |
| 6. court's observations on the implications of the moratorium. (Para 23 , 24 , 27) |
| 7. the court's rationale on the non-application of liability to directors. (Para 31) |
| 8. conclusion regarding the status of the claims and proceedings against directors. (Para 35) |
| 9. final conclusion quashing criminal proceedings. (Para 44) |
JUDGMENT :
URMILA JOSHI-PHALKE, J.
1. These applications are filed by applicants for quashing Criminal Case Nos.691/2023; 696/2023; 695/2023; 693/2023; 692/2023; and 694/2023 filed under Section 138 read with 141 of the Negotiable Instruments Act (the NIA ).
2. Brief facts necessary for disposal of applications are as under:
Applicants were Directors of company namely “Venus Rolling Mills Private Limited” wh
After declaration of moratorium, directors lose liability for cheques issued on behalf of the company, as all powers transfer to the resolution professional.
Directors of a corporate debtor cannot be prosecuted for cheque dishonor under the NI Act for cheques issued during moratorium as per the IBC, voiding their authority to transact.
The moratorium provision under Section 14 of the Insolvency and Bankruptcy Code, 2016 does not apply to the natural persons mentioned in Section 141(1) and (2) of the Negotiable Instruments Act.
The imposition of moratorium under Sec. 14 of the I.B. Code applies to the corporate debtor, while the natural persons mentioned in Sec. 141 of the N.I. Act continue to be statutorily liable.
A partner of a firm can file a complaint under Section 138 of the Negotiable Instruments Act if authorized, as they act as agents of the firm, and the moratorium under IBC does not protect directors ....
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....
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.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
