In Brief
A director of a corporate debtor that is undergoing insolvency proceedings challenged criminal charges under Section 138 of the Negotiable Instruments Act (dishonoured cheques). The Supreme Court held that where a demand notice for payment is issued after a moratorium is imposed under the Insolvency and Bankruptcy Code, proceedings against the director cannot continue. This is because the director's powers are suspended upon appointment of the interim resolution professional, and the director lacks practical capacity to pay. The moratorium's protections apply when the cause of action arises after its imposition, distinguishing this case from prior precedent. The Court allowed the appeal and quashed the criminal complaint, directing that the claim be pursued through the insolvency process instead.
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