Sections 138 & 141 of NI Act & IBC – Cheques after liquidation
The Applicants were the Directors of Venus Rolling Mills Pvt Ltd – accused no.1 in the criminal cases.
On 21.5.2015, Applicant No.4 resigned as Director.
On 10.6.2017, Applicant No.2 resigned as Director.
On 22.4.2019, the NCLT Mumbai admitted insolvency petition and started moratorium against the accused company. Resolution Professional had filed applied for liquidation.
The Applicant Nos.1 and 3 were suspended as Directors.
On 9.5.2019, the Resolution Professional intimated non-applicant company not to deposit cheques.
In 2022, various cheques were issued.
On 29.10.2022, the non-applicant Company presented cheques despite information of CIRP and liquidation.
On 25.10.2022, the non-applicant Company issued statutory notice under Section 138 of the NI Act against the applicants with accused – company.
On 30.3.2023, the accused company was sold to another company, and the certificate was issued on 14.9.2023. The liquidation was closed on 18.6.2024.
HELD that the notices were issued on 25.10.2022 after section 33 IBC application was decided by NCLT. After the moratorium was declared, the applicant nos.1 and 3 did not have the capacity to pay the demand as per section 138 notice. They were ceased to be Directors of the corporate debtor. The powers of the Board of Directors of the accused company were further ceased on 9.6.2022 prior to the issue of cheques. The applicant Nos.1 and 3 had no authority to sign the cheques. Therefore, the cheques were not valid cheques.
Judgment dated 3.7.2025 of the High Court of Bombay, Bench at Nagpur, in Criminal Application (APL) No.1679 of 2024 of Yatendra Singh Rajendra Singh Panwar and others Vs. Ganga Iron and Steel Trading Company Limited with connected matters
