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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Informative
No Bar to Liability of Signatory of Cheque under NI Act due to Initiation of Proceedings under IBC: Madhya Pradesh HC [Read Order]
Insolvency & Bankruptcy Code
The Madhya Pradesh High Court ruled that signatories of cheques remain liable under the Negotiable Instruments Act, despite insolvency proceedings under the Insolvency and Bankruptcy Code. An applicant sought relief under Section 482 of Cr.P.C., challenging a condition to deposit Rs.13,73,890 during the pendency of an appeal. \r
The court cited the Supreme Court's ruling, distinguishing between IBC and NI Act proceedings, emphasizing that dissolution of a company doesn't absolve personal penal liability. It upheld the conviction, stating that initiation of IBC proceedings doesn't invalidate the liability of cheque signatories. \r
Justice Gurpal Singh Ahluwalia's bench affirmed that IBC initiation can't be a ground to evade cheque signatory liability.
