SCI (2026.04.16) in Abhaykumar Anandkumar Bhambore & Anr. Vs. Ortho Relief Hospital and Research Centre & Anr. [Special Leave to Appeal (CRL.) NO(S). 19823/2025] held that;-
High Court allowed the Writ Petition observing that liability under S.138 of the NI Act would subsist despite the initiation of proceedings under the Insolvency and Bankruptcy Code, 2016. The order discharging the petitioners was quashed and set aside.
Blogger’s Comments; The position stands amply clarified by the Hon’ble Supreme Court (2023.03.15) In Ajay Kumar Radheshyam Goenka Vs. Tourism Finance Corporation of India Ltd. [Criminal Appeal No. 170 of 2023 (SLP(Crl) No. 417 of 2020) with Criminal Appeal No. 172 of 2023 (SLP(Crl) No. 482 of 2020) & Criminal Appeal No. 171 of 2023 (SLP (Crl) 446 of 2020)] wherein it held that;
Thus, for the period of moratorium, since no Sections 138/141 proceeding can continue or be initiated against the corporate debtor because of a statutory bar, such proceedings can be initiated or continued against the persons mentioned in Sections 141(1) and (2) of the Negotiable Instruments Act.
This being the case, it is clear that the moratorium provision contained in Section 14 IBC would apply only to the corporate debtor, the natural persons mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of the Negotiable Instruments Act.”
Thus, the heart of the matter is the second proviso appended to Section 32A(1) (b) of the IBC which provides statutory recognition of the criminal liability of the persons who are otherwise vicariously liable under Section 141 of NI Act, in the context of Section 138 offence.
No clause in the resolution plan even if accepted by the adjudicating authority/appellate tribunal can take away the power and jurisdiction of the criminal court to conduct and dispose of the proceedings before it in accordance with the provisions of the CrPC.
Thus, where the proceedings under Section 138 of the NI Act had already commenced and during the pendency the plan is approved or the company gets dissolved, the directors and the other accused cannot escape from their liability by citing its dissolution. What is dissolved is only the company, not the personal penal liability of the accused covered under Section 141 of the NI Act.
This Court in Lalit Kumar Jain v. Union of India and Others reported in (2021) 9 SCC 321 has held that the approval of the resolution plan per se does not operate as a discharge of guarantors’ liability. That is because:
Section 30(2)(e) of the IBC requires the resolution professional to approve the resolution plan, only if the same does not violate any of the provisions of the law for the time being in force. Thus, the clauses of the resolution plan cannot control the Enactment/Rules in force.
After passing of the resolution plan under Section 31 of the IBC by the adjudicating authority & in the light of the provisions of Section 32A of the IBC, the criminal proceedings under Section 138 of the NI Act will stand terminated only in relation to the corporate debtor if the same is taken over by a new management.
Section 138 proceedings in relation to the signatories/directors who are liable/covered by the two provisos to Section 32A(1) will continue in accordance with law.
Excerpts of the Order;
Briefly stated, the facts of the case are that the petitioners/accused took a loan of Rs. 15,00,000/- from respondent No.1/complainant, and allegedly repaid the amount through a post-dated cheque dated 12.12.2018. The cheque was signed by petitioner No.1 in his capacity as a director and authorized signatory of respondent No.2 company (of which petitioner No.2 herein is also a director). This cheque was dishonoured on 14.12.2018.
On 8.02.2019, respondent No.1 filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 (‘NI Act’). This was registered as S.C.C. No. 7281/2019. On 08.04.2019, an order of liquidation was passed against the respondent No.2 company (accused No.1). The petitioners subsequently filed an application for discharge, which was allowed by the Trial Court by order dated 31.01.2025. The Trial Court observed that since the petitioners had lost their positions as directors of the respondent No.2 company post liquidation, they could not be liable.
Aggrieved, respondent No.1 filed Criminal W.P.No.251/2025 before the Bombay High Court, Nagpur Bench. By the impugned order dated 01.10.2025, the High Court allowed the Writ Petition observing that liability under S.138 of the NI Act would subsist despite the initiation of proceedings under the Insolvency and Bankruptcy Code, 2016. The order discharging the petitioners was quashed and set aside. Aggrieved, the petitioners have preferred the present Special Leave Petition.
We have heard learned counsel for the petitioners and learned counsel for the respondents at length.
do not find any reason to interfere with the impugned order.
Special Leave Petition is hence, dismissed.
It is needless to observe that all other contentions on both sides are left open to be advanced before the trial court.
Pending application(s), if any, shall stand disposed of.
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