The Bombay High Court has held that personal insolvency proceedings initiated by a company director do not require cheque-bounce proceedings against the director to be stayed where the dishonoured cheque was issued towards the company’s debt.
Justice N. J. Jamadar observed, “To put it in other words, the debt referred to in Section 96 must be a debt of the person by or against whom the insolvency resolution process is initiated under Sections 94 or 95, as the case may be.”
The ruling concerned whether the interim moratorium under Section 96 of the Insolvency and Bankruptcy Code, 2016 could stay proceedings under Sections 138 and 141 of the Negotiable Instruments Act, 1881, against directors and other persons responsible for a…