Shashankbhai Jayantibhai Shah Vs HDFC Bank Ltd. & Ors. (Supreme Court of India)
The matter before the Supreme Court of India involved two appeals filed by the appellant, Shashankbhai Jayantibhai Shah, challenging orders issued by the High Court of Judicature at Gujarat in a case related to the dishonor of a cheque under Section 138 of the Negotiable Instruments Act, 1881 (N.I. Act).
The appellant was initially convicted by the Additional Chief Metropolitan Magistrate, NIA Court No.30, Ahmedabad, on April 3, 2017, for the cheque dishonor. He was sentenced to two years of imprisonment and ordered to pay Rs.2,50,00,000/- as compensation. The appellant challenged this conviction and sentence before the Sessions Court at Ahmedabad.
During the pendency of the appeal, a petition was admitted by the National Company Law Tribunal (NCLT), Ahmedabad, against a company of which the appellant was one of the directors. On March 19, 2018, the NCLT issued an order for the liquidation of the company. Despite this development, the Sessions Court confirmed the Magistrate’s conviction and dismissed the appellant’s appeal on July 26, 2018.
Following the Sessions Court’s decision, the National Company Law Appellate Tribunal (NCLAT), while considering a company appeal related to the NCLT’s liquidation order, issued an order on July 31, 2018. The NCLAT specifically permitted the proceedings under Section 138 of the N.I. Act to continue against the appellant, notwithstanding the period of moratorium applicable to the company.
