Deciding two connected writ petitions arising from a common Industrial Tribunal Award, the Delhi High Court set aside the Tribunal's direction granting hotel workmen a further…
Labour Laws
06/09/20264 min read
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Mere Initiation Of Proceedings Under IBC Doesn't Bar Liability Of Signatory Of Cheque Under Negotiable Instruments Act: Madhya Pradesh High Court
Insolvency & Bankruptcy Code
The Madhya Pradesh High Court, under Justice Gurpal Singh Ahluwalia, ruled that initiation of proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC) doesn't absolve a signatory of a cheque from liability under the Negotiable Instruments Act, 1881 (NI Act).
The petitioner sought relief under Section 482 of Cr.P.C., arguing the IBC's interim moratorium invalidated the compensation order. The court referenced the Supreme Court's decision in Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation, affirming that IBC and NI Act proceedings are distinct. It clarified that approval of an IBC resolution plan doesn't nullify personal criminal liability under the NI Act.
Thus, the High Court upheld the conviction and the condition to deposit Rs. 13,73,890 as a prerequisite for sentence suspension, rejecting the petitioner's plea based on IBC initiation.
