The Supreme Court on Monday held that the declaration of moratorium under Section 14 of the Insolvency and Bankruptcy Code(IBC) covers criminal proceedings for dishonour of cheque under Section 138 of the Negotiable Instruments Act against the corporate debtor. “We hold that a Section 138/141 NI Act against the corporate debtor. “We hold that a Section 138/141 NI Act proceeding against a corporate debtor is covered by Section 14(1)(a) of the judgement.
A bench comprising Justices RF Nariman, Navin Sinha and KM Joseph delivered the judgment on a batch of petitions(P Mohanraj and others v M/s Shah Brothers Ispat Ltd and connected cases) which challenged the continuation of criminal trial under Section 138 NI Act during the pendency of liquidation proceedings can continue against natural persons in-charge of the corporate debtor, such as directors of the company.
(Livelaw)
