Moratorium given to an individual under Chapter III of IBC, 2016 will not cover the proceedings under Sec. 138/141 of Negotiable Instruments Act, 1881 initiated against Directors or Guarantors of any Company, which is not a Corporate Debtor under the Code – Ashok B.Jeswani and Anr. Vs. Redington India Ltd. – Madras High Court
Hon’ble Madras High Court refers judgment in P. Mohanraj & Ors. v. Shah Brothers Ispat Pvt. Ltd. (2021) ibclaw.in 24 SC and Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation of India Ltd. (2023) ibclaw.in 30 SC and holds that as the Hon’ble Supreme Court held that the moratorium given to the corporate debtor under Chapter II will not cover the individuals, who are the Guarantors of Directors. Similarly, the moratorium given to an individual under Chapter III will not cover the proceedings initiated against them as Directors or Guarantors of any company, which is not a corporate debtor under this Code.