In a recent ruling of Ajay Kumar Radheyshyam Goenka vs Tourism Finance Corporation of India Limited, the Supreme Court held that personal liability of a signatory or director of a company in a cheque dishonour case cannot be absolved during corporate insolvency resolution proceedings.
The court emphasized that the nature of insolvency and cheque dishonour proceedings are different and that the moratorium under the Insolvency and Bankruptcy Code does not apply to proceedings under the Negotiable Instruments Act. The court rejected the argument that the dishonour case should be considered as civil rather than criminal by emphasizing its penal character.
Our Associate Aashna Jain undertakes the detailed legal analysis of the case in this article published by Mondaq.
#PioneerLegal #LawAtPL #IBC #NIAct #chequebounce #personalliability
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