The moratorium under the Insolvency and Bankruptcy Code bars proceedings under Section 138 of the Negotiable Instruments Act against the corporate debtor but does not bar such proceedings against its directors or other natural persons.
The Kerala High Court, through a Single-Judge Bench comprising Justice K. Babu, reviewed a criminal original petition and held that during the moratorium under Section 14 of the Insolvency and Bankruptcy Code (IBC), criminal proceedings under Section 138 of the Negotiable Instruments Act (NI Act) cannot be continued against the corporate debtor. However, such proceedings can lawfully proceed against natural persons who are vicariously liable under Section 141 of the NI Act.
