AI Overview...
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Section 96 of the Insolvency and Bankruptcy Code, 2016 - Provides for the moratorium during insolvency proceedings, preventing creditors from initiating or continuing legal actions, including criminal proceedings, against the debtor or its assets. Courts have held that proceedings under Section 138 of the Negotiable Instruments Act (NI Act) can be stayed or are subject to the moratorium under Section 96, especially when insolvency proceedings are pending Ram Kishor Arora @ R. K. Arora VS Puneet Dhar - Punjab and Haryana, Ashok B. Jeswani VS Redington India Limited - Madras, Arvind Dham VS State Bank of India and Anr. - National Company Law Appellate Tribunal.
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Interplay between Section 138 NI Act and IBC Proceedings - Courts have examined whether criminal proceedings under Section 138 can proceed when an insolvency case is ongoing. The consensus is that the moratorium under Section 96 of the IBC can stay such proceedings, but the criminal liability of individuals may persist unless specifically stayed or quashed Ram Kishor Arora @ R. K. Arora VS Anubhav Kapoor - Punjab and Haryana, Arvind Dham VS State Bank of India and Anr. - National Company Law Appellate Tribunal.
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Legal Challenges and Court Rulings - Several cases have addressed the legality of continuing criminal proceedings during insolvency. Courts have emphasized that proceedings under Section 138 of NI Act are quasi-criminal and can be subject to the moratorium, but the actual stay or quashing depends on the specifics of the case and whether the proceedings are linked to the corporate debtor or individual guarantors Ram Kishor Arora @ R. K. Arora VS Puneet Dhar - Punjab and Haryana, Anurodh Mittal S/o Ramdhari Mittal VS Rehat Trading Company - Madhya Pradesh.
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Application of Section 96 in Criminal and Civil Contexts - Courts have clarified that Section 96 applies broadly, including to proceedings under the NI Act, and that the initiation of insolvency proceedings can have a 'relation back' effect, impacting ongoing legal actions against the debtor or guarantors KISHORE LAXMINARAYAN BIYANI & ORS. Vs. AMAR DEEP SINGH WALIA & ANR. - Delhi.
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Implications for Personal Guarantors and Creditors - Personal guarantors challenging the initiation or continuation of proceedings under Section 138 have been denied relief if insolvency proceedings are pending, as the moratorium aims to protect the insolvency process rather than individual liabilities unless explicitly stated Arvind Dham VS State Bank of India and Anr. - National Company Law Appellate Tribunal, Gagandeep Kaur VS - National Company Law Appellate Tribunal.
Analysis and Conclusion:
Section 96 of the Insolvency and Bankruptcy Code, 2016, establishes a broad moratorium that halts legal actions, including criminal proceedings like those under Section 138 of the NI Act, during insolvency proceedings. Courts have consistently held that such proceedings are subject to the moratorium, and continuation without court permission may be illegal. However, the criminal liability of individuals, especially guarantors, may not be automatically stayed unless the proceedings are directly linked to the insolvency process. The courts emphasize the need to balance the objectives of insolvency resolution with the enforcement of criminal liabilities, often leaning towards staying proceedings to preserve the integrity of the insolvency process Ram Kishor Arora @ R. K. Arora VS Puneet Dhar - Punjab and Haryana, Ashok B. Jeswani VS Redington India Limited - Madras, Arvind Dham VS State Bank of India and Anr. - National Company Law Appellate Tribunal.
References:
- Ram Kishor Arora @ R. K. Arora VS Anubhav Kapoor - Punjab and Haryana
- Ram Kishor Arora @ R. K. Arora VS Puneet Dhar - Punjab and Haryana
- Ashok B. Jeswani VS Redington India Limited - Madras
- KISHORE LAXMINARAYAN BIYANI & ORS. Vs. AMAR DEEP SINGH WALIA & ANR. - Delhi
- Anurodh Mittal S/o Ramdhari Mittal VS Rehat Trading Company - Madhya Pradesh
- Arvind Dham VS State Bank of India and Anr. - National Company Law Appellate Tribunal
- Gagandeep Kaur VS - National Company Law Appellate Tribunal
Search Results for "Insolvency Bankruptcy Code 2016 in Section 96 Court Case"
2023 0 Supreme(P&H) 257 • India - Punjab and Haryana
SANJIV BERRY
Section 138 of the NI Act - Jurisdiction of Criminal Court - Insolvency and Bankruptcy Code, 2016 - Sections 14 and 96 - [Section ... 138 of the NI Act, Sections 14 and 96 of the Insolvency and Bankruptcy Code, 2016] Fact of the Case: The petitioner ... in a complaint under Section 138 of t....
2023 0 Supreme(P&H) 296 • India - Punjab and Haryana
SANJIV BERRY
and Bankruptcy Code, 2016] - The court discussed the interplay between the proceedings under the Insolvency and Bankruptcy Code, ... Section 138 of the NI Act - Proceedings under IBC - 1881, 2016 - [Section 138 of the NI Act, Section 14 and 96 of the Insolvency ... to quash the order summoning the petitioner under Section 138 of the NI Act, cit....
2023 0 Supreme(Mad) 3348 • India - Madras
G. JAYACHANDRAN
Sections 94, 96, and 101 of the Insolvency and Bankruptcy Code, 2016. ... INDEBTEDNESS - NEGOTIABLE INSTRUMENTS ACT, 1881 & INSOLVENCY AND BANKRUPTCY CODE, 2016 - Sections 138, 94 ... insolvency proceedings. ... Before the XXI Additional City Civil Court, Allikullam at Chennai, a memo was filed reporting pendency of insolvency proceedings and t....
2024 Supreme(Online)(DEL) 19426 • India - High Court of Delhi
MR. JUSTICE AMIT MAHAJAN, J
(Paras 1-7) ... ... (B) Insolvency and Bankruptcy Code, 2016 - Section 96 - Relation back of ... of a complaint under Section 138 of the NI Act, asserting that the proceedings are illegal due to ongoing insolvency proceedings ... ... ... Issues: The main issue is whether proceedings under Section 138 of the NI Act can continue when insolvency proceedings have ... He submits that the proceedings under the #HL_....
2024 0 Supreme(MP) 626 • India - Madhya Pradesh
GURPAL SINGH AHLUWALIA
(A) Criminal Procedure Code, 1973 - Section 482 - Negotiable Instruments Act, 1881 - Section 138 - Insolvency and Bankruptcy Code ... , 2016 - Section 96 - Application seeking to quash the condition of deposit for suspension of sentence during appeal - Interim moratorium ... ... ... Findings of Court: ... The court held that the applicant's criminal liability remains intact despite the initiation of in....
2024 Supreme(Online)(NCLT) 257 • India - National Company Law Tribunal
(A) Insolvency and Bankruptcy Code, 2016 - Section 94(1) - SARFAESI Act, 2002 - Sections 13(2), 13(4), and 14 - Application filed ... 96 of IBC, 2016. ... The application was found to be an attempt to frustrate legal remedies available to the creditor and to enjoy a moratorium under Section ... The Present Application is filed under Section 94(1) of the Insolvency and Bankruptcy ....
2024 Supreme(Online)(NCLAT) 434 • India - National Company Law Appellate Tribunal
Justice Ashok Bhushan (Chairperson) , Hon'ble Mr. Barun Mitra (Member (Technical)) , Hon'ble Mr. Arun Baroka (Member (Technical)) ,
(A) Insolvency and Bankruptcy Code, 2016 - Sections 95(1), 96, and 60(1) and (2) - Appeal by Personal Guarantor against admission ... that interim moratorium under Section 96 does not apply as application was filed without jurisdiction - Application under Section ... (Paras 1, 3) ... ... Findings of Court: ... The court found that the application under Section ... b....
2024 Supreme(Online)(NCLAT) 218 • India - National Company Law Appellate Tribunal
Justice Ashok Bhushan (Chairperson) , Hon'ble Mr. Barun Mitra (Member (Technical)) , Hon'ble Mr. Arun Baroka (Member (Technical)) ,
(A) Insolvency and Bankruptcy Code, 2016 - Sections 94 and 96 - Personal guarantors challenging dismissal of application under Section ... a corporate debtor against the dismissal of their application under Section 94 of the IBC for non-compliance with earlier orders ... ... ... Issues: The main issues included whether the subsequent application under Section 94 was maintainable and the implications ... 96 of IBC....
2022 0 Supreme(Del) 2181 • India - Delhi
AMIT BANSAL
13(2) of SARFAESI Act] - The court discussed the invocation of pledged shares and the notice requirements under Section 176 of the ... Shares - Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) - [Section ... Finding of the Court: The court found that the plaintiff failed to establish a prima facie case and vacated the interim ... The effect of insolvency proceedings being initiated against the plaint....
2020 5 Supreme 424 • India - Supreme Court
L.NAGESWARA RAO, HEMANT GUPTA, AJAY RASTOGI
and Bankruptcy Code, 2016 – Sections 95, 96, 99, 100 and 101 – Transfer of Writ Petitions – Writ Petitions that are pending ... (Paras 6 to 8) Facts of the case: Insolvency and Bankruptcy Board of India has ... – Insolvency and Bankruptcy Code is at a nascent stage and it is better that interpretation of provisions of Code is taken up by ... By a Notification dated 15.11.2019, th....
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