The Bombay High Court has said that directors of a company are still accountable for penalties and criminal proceedings under the Negotiable Instruments Act of 1881 even if their company’s debts have been settled under the Insolvency And Bankruptcy Code, 2016.
This ruling came in the light of a case filed by a person who owns a hospital in Nagpur, Maharashtra. He tool legal action against two directors of a company, who are in charge of the company’s financial and business operations. These directors oversee the the day-to-day activities of the company, including the decision related to financing, borrowings and repayments.
On October 2015, these two directors approached this hospital owner for a short- term loan of Rs 15 lakh…