In Brief
In this case, the Supreme Court considered whether a company director could escape criminal prosecution under Section 138 of the Negotiable Instruments Act (relating to dishonoured cheques) after the company's debt was settled through a resolution plan under the Insolvency and Bankruptcy Code. The Court held that criminal proceedings against directors and signatories continue independently of the company's insolvency resolution. Section 138 proceedings are penal in nature, not civil recovery. While the company itself may be protected once new management takes over, directors remain personally liable under Section 141 of the NI Act. The Court dismissed the appeals and held that approval of a resolution plan does not extinguish the criminal liability of those responsible for the company's business at the time of the offence.
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