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IBC Moratorium & Criminal Prosecution of Directors

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Section 96 IBC Moratorium & Vicarious Criminal Liability of Directors

The applicability of the moratorium under the provisions of Section 96 of the Insolvency and Bankruptcy Code, 2016 (“IBC 2016”) to the initiation or continuation of a complaint filed for the commission of an offence punishable under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 (“the NI Act, 1881”) qua the directors/the persons liable for commission of such offence under Section 141 of the NI Act, 1881

criminal aspect of the prosecution under Section 138 of the Act, 1881 would not be affected by the moratorium provisions of the IBC 2016 and the directors of the corporate debtor cannot escape personal criminal liability.

Judgment dated 18.8.2026 of the High Court of Bombay in Criminal Writ Petition No.2228 of 2025 Prashant Boorugu  Vs.   National Spot Exchange Ltd and another with connected writ petitions and applications.

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