Directors Can't Escape Penal Liability Under NI Act Despite Company Insolvency.

The High Court ruled that directors of a company cannot avoid penal liability under Section 138 of the Negotiable Instruments Act, 1881, even if the company is insolvent. The petitioners, who were the Managing Director and Director of a private company, sought to stay proceedings under Section 138 by invoking Section 96 of the Insolvency and Bankruptcy Code, 2016. The court determined that Section 138 proceedings are penal and not related to debt recovery, thus not barred by Section 96 IBC. The petition was dismissed as an attempt to delay proceedings that have been ongoing for nine years. .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X