Case Law Details
Gurmeher Singh Vs State of U.P. and Another (Allahabad High Court)
The case of Gurmeher Singh vs. State of U.P. and Another, heard in the Allahabad High Court, revolves around the quashing of an order issued by the Additional District & Sessions Judge and an Addl. Civil Judge, both in Gorakhpur. The applicant sought the quashing of these orders and a stay on further proceedings related to Complaint Case No. 6272 of 2020 pending before the Addl. Civil Judge.
The facts of the case indicate that the opposite party filed an application under Section 138 of the Negotiable Instruments Act (N.I. Act) against the applicant and his company, M/s Saraya Industries Ltd. The trial court issued a summons to the applicant as an active director of the company. The applicant challenged this order through a revision petition, which was subsequently rejected. Dissatisfied with both orders, the applicant filed the present application seeking relief.
The applicant argued that since insolvency proceedings were underway against the company under the Insolvency and Bankruptcy Code, 2016 (IBC), Section 14 of the IBC prohibited any proceedings, including those under Section 138 of the N.I. Act, against the company. Furthermore, the applicant, as a director, had not guaranteed any amount payable under the disputed cheque. The applicant cited the Supreme Court’s judgment in Mohanraj vs. M/s Shah Brothers Ispat Pvt. Ltd., which held that during insolvency proceedings, no proceedings under Section 138 of the N.I. Act could be executed against the company.
However, the State argued that Section 14 of the IBC only prohibited execution against the company, not against natural persons. It was alleged that the applicant actively participated in the day-to-day business of the company and persuaded the complainant to invest in the company’s liquor business.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
