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PROCEEDINGS FOR CHEQUE DISHONOUR CAN CONTINUE AGAINST THE OFFICERS OF THE COMPANY DESPITE PRINCIPAL BORROWER UNDERGOING INSOLVENCY PROCEEDINGS
On 01.03.2021, in the matter of P. Mohanraj&Ors.Vs M/s Shah Brothers Ispat Pvt. Ltd. (2021) SCC OnLine SC 152, the Hon’ble Supreme Court while hearing challenge to the proceedings under Section 138, Negotiable Instruments Act, 1881, against the Corporate Debtors and their office bearers, who had signed the cheques which were eventually bounced, had held that while the moratorium under Section 14, Insolvency and Bankruptcy Code, 2016, shall attract qua the Corporate Debtor, the proceedings against its Officers/ex-Directors/Employees who had signed the cheques, shall continue.