P. Mohanraj & Ors. v. Shah Brothers Ispat Pvt. Ltd. & Anr.
Supreme Court of India(2021) 6 SCC 1A Constitution Bench-equivalent 3-judge bench settled a critical intersection of the NI Act and the Insolvency and Bankruptcy Code, 2016. Held: (i) A S.138 NI Act complaint is a "proceeding" within the meaning of S.14(1)(a) of the IBC — accordingly, once a Corporate Insolvency Resolution Process (CIRP) commences against a company, S.138 complaints and proceedings against that company stand stayed; (ii) however, the moratorium under S.14 IBC does not extend to natural persons such as directors, guarantors and officers of the company — they can still be prosecuted under S.141 NI Act during the CIRP; (iii) upon successful resolution, the resolution plan binds all creditors including those with pending S.138 complaints; and (iv) if the company goes into liquidation, the S.138 complaint abates qua the company but can continue against directors.