Vishnoo Mittal vs Shakti Trading Company 2025 INSC 346 - IBC - Moratorium - S. 138 NI Act
Negotiable Instruments Act - Section 138 - The cause of action arises only when the amount remains unpaid even after the expiry of fifteen days from the date of receipt of the demand notice-
Insolvency and Bankruptcy Code - Section 14 ; Negotiable Instruments Act - Section 138 -In this case, the accused contended that the corporate debtor is presently facing insolvency proceedings and a moratorium order was issued- HC refused to quashed complaint - Allowing appeal, SC observed: The case at hand is totally different from P.Mohan Raj as the cause of action in the present case arose after the commencement of the insolvency process- The bare reading of the above provision shows that the appellant did not have the capacity to fulfil the demand raised by the respondent by way of the notice issued under clause (c) of the proviso to Section 138 NI Act. 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. Therefore, the powers vested with the board of directors were to be exercised by the IRP in accordance with the provisions of IBC. 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 section 17 of the IBC. (Para 9- 11)- Distinguished P. Mohan Raj v. M/S Shah Brothers Ispat Pvt. Ltd. (2021) 6 SCC 258.
