LexVISHNOO MITTAL versus M/S SHAKTI TRADING COMPANY
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2025] 4 S.C.R. 41 : 2025 INSC 346 Vishnoo Mittal v. M/s Shakti Trading Company (Criminal Appeal No. 1287 of 2025) 17 March 2025 [Sudhanshu Dhulia* and Ahsanuddin Amanullah, JJ.] Issue for Consideration Whether the High Court was justified in relying upon P. Mohan Raj case which held that the immunity granted by the moratorium order issued under Section 14, IBC can only be obtained by a Corporate Debtor and not by a natural person such as the present appellant, while dismissing the s.482 application filed by the appellant for quashing of proceedings initiated u/s.138 of Negotiable Instruments Act, 1881. Headnotes† Code of Criminal Procedure, 1973 – s.482 – Negotiable Instruments Act, 1881 – s.138 – Insolvency and Bankruptcy Code, 2016 – ss.14, 17 – Moratorium order was imposed on 25.07.2018 – Demand Notice u/s.138, NI act was served on the appellant (former director of the corporate debtor), thereafter on 06.08.2018 – High Court relying on P. Mohan Raj case, dismissed the s.482 application filed by the appellant – Challenge to: Held: Impugned order set aside – Under clause (c) of the proviso to s.138, NI Act cause of action arises only when demand notice is served and payment is not made pursuant to such demand notice within the stipulated fifteen-day period – The return of the cheques dishonoured simpliciter does not create an offence u/s.138, NI Act – High Court erred in relying on P. Mohan Raj since the facts of that case were completely different as the cause of action in the present case arose after the commencement of the insolvency process whereas in P. Mohan Raj cause of action u/s.138, NI Act arose before the imposition of the moratorium and on these facts, this Court had held that s.14, IBC bars or stays * Author 42 [2025] 4 S.C.R. Supreme Court Reports proceedings only against the corporate debtor and proceedings can be continued or initiated against the natural persons – Moreover, when the notice was issued to the appellant, he was not in charge of the corporate debtor as he was suspended from his position as the director of the corporate debtor as soon as IRP was appointed on 25.07.2018 – All the bank accounts of the corporate debtor were operating under the instructions of the IRP, hence, it was not possible for the appellant to repay the amount in light of s.17, IBC – Summoning order and the complaint are quashed. [Paras 7-9, 11, 13] Case Law Cited P. Mohan Raj v. M/s Shah Brothers Ispat Pvt. Ltd. [2021] 14 SCR 204 : (2021) 6 SCC 258 – distinguished. Jugesh Sehgal v. Shamsher Singh Gogi [2009] 10 SCR 857 : (2009) 14 SCC 683 – relied on. List of Acts Code of Criminal Procedure, 1973; Negotiable Instruments Act, 1881; Insolvency and Bankruptcy Code, 2016. List of Keywords Section 138 of Negotiable Instrument Act, 1881; Dishonour of cheque; Sections 14 and 17 of Insolvency and Bankruptcy Code, 2016; Moratorium order; Section 482 of CrPC; Quashing; Natural Person; Insolvency proceedings; Cause of action; Cause of action arose after the commencement of the insolvency process; Demand notice; P. Mohan Raj v. M/s Shah Brothers Ispat Pvt. Ltd.; Return of the cheques dishonoured simpliciter; Immunity granted by moratorium order; Director of the Corporate Debtor; Management of corporate debtor taken over by the interim resolution professional. Case Arising From CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 1287 of 2025 From the Judgment and Order dated 21.12.2021 of the High Court of Punjab & Haryana at Chandigarh in CRM-M No. 10624 of 2020 [2025] 4 S.C.R. 43 Vishnoo Mittal v. M/s Shakti Trading Company Appearances for Parties Advs. for the Appellant: Abhishek Anand, Ms. Mithu Jain, Karan Kohli, Krishna Sharma, Ms. Vanshika Dhoot. Advs. for the Respondent: A D S Jattana, Triloki Nath Razdan, Prashant Shukla, Mrs. Anushree Shukla. Judgment / Order of the Supreme Court Judgment Sudhanshu Dhulia, J. 1. Leave granted. 2. The appellant before this court has challenged the order dated 21.12.2021 of the learned Single Judge of the Punjab and Haryana High Court by which the appellant’s petition under section 482 of Criminal Procedure Code, 1973 (‘CrPC’), seeking quashing of proceedings initiated under Section 138 of Negotiable Instruments Act, 1881 (‘NI Act’) against the appellant, has been dismissed. 3. Admittedly, the appellant was the director of M/s Xalta Food and Beverages Private Limited (hereinafter ‘corporate debtor’). There was a contrac
Excerpt shown. Read the full judgment & AI analysis in Lexace.