Interim Order 10

Order Details: COPY OF JUDICIAL PROCEEDINGS
Pdf Text: 146 Ct Cases / 1601/2024
Kotak Mahindra Bank Vs. Abhishek Gupta
147 Ct Cases / 1602/2024
Kotak Mahindra Bank Limited Vs. Mahendra Kumar Gupta
19.05.2026
Present : Mr. Abhishek Kumar, Ld. counsel for complainant.
Ms. Akanksha Mehra, Sh. Shivam Bhimsaria, Sh.
Abhiraj Choudhary and Ms. Akanksha Singhania, Ld.
counsels for accused appeared through VC.
The present order shall dispose of an application moved
on behalf of the accused/applicant under Section 96 of the
Insolvency and Bankruptcy Code, seeking stay of further
proceedings in the present complaint case.
It is submitted on behalf of the applicant/accused that
insolvency proceedings under Insolvency and Bankruptcy Code,
2016 have already been initiated against the applicant before the
Hon’ble National Company Law Tribunal, Kolkata and
consequently an interim moratorium under Section 96 of the
Insolvency and Bankruptcy Code has come into operation. It is
further submitted that in view of the said interim moratorium, all
legal proceedings in respect of any debt are deemed to have been
stayed and therefore the present proceedings under Section 138 NI
Act are also liable to be stayed qua the applicant/accused. In support
of the application, reliance has been placed upon the judgments filed
alongwith the application.
Per contra, Ld. Counsel for the complainant opposed
the application and submitted that the issue is no longer res integra
in view of the latest judgment of the Hon’ble Supreme Court
in Rakesh Bhanot v. Gurdas Agro Pvt. Ltd. Crl Appeal No. 1607
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Of 2025 wherein it has been categorically held that proceedings
under Section 138 NI Act are criminal proceedings and are not
stayed by virtue of interim moratorium under Section 96 of the
Insolvency and Bankruptcy Code, 2016. It is thus prayed that the
present application be dismissed.
Submissions heard. Record perused.
At the outset, it is pertinent to note that the applicant
seeks stay of the present proceedings on the ground that insolvency
proceedings under Section 95 of the Insolvency and Bankruptcy
Code, 2016 are pending against him and therefore an interim
moratorium under Section 96 IBC is in operation.
The principal contention raised on behalf of the
applicant is that proceedings under Section 138 NI Act are
proceedings “in respect of any debt” and therefore would
automatically stand stayed by virtue of Section 96 IBC. However,
the said issue now stands conclusively settled by the recent
judgment of the Hon’ble Supreme Court in Rakesh Bhanot v.
Gurdas Agro Pvt. Ltd. wherein the Hon’ble Apex Court has
specifically held that proceedings under Section 138 of the
Negotiable Instruments Act are criminal proceedings and the interim
moratorium contemplated under Section 96 IBC does not operate as
a bar to continuation of such proceedings.
The Hon’ble Supreme Court has clarified that the
object of proceedings under Section 138 NI Act is not merely
recovery of debt but enforcement of penal liability arising from
dishonour of cheque and maintenance of commercial efficacy of
negotiable instruments. It has further been held that Section 96 IBC
cannot be used as a shield to avoid criminal prosecution under
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Section 138 NI Act.
In view of the aforesaid authoritative pronouncement of
the Hon’ble Supreme Court, the judgments and interim orders relied
upon by the applicant do not advance the case of the applicant,
particularly when the issue now stands conclusively settled by the
Hon’ble Apex Court.
Accordingly, this Court does not find any merit in the
present application. The application under Section 96 of the
Insolvency and Bankruptcy Code, 2016 seeking stay of proceedings
is hereby dismissed.
Put up for further proceedings on 30.09.2026.
(Siddhant Kumar)
JMFC (NI Act)-05/PHC/NDD
19.05.2026
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