On March 15, 2023, a three judge bench of the Supreme Court in
the case of Ajay Kumar Radheyshyam Goenka vs Tourism Finance
Corporation of India Limited1 and other connected
matters held that personal liability of a signatory/director of a
company in a cheque dishonour case filed under the Negotiable
Instruments Act, 1881 ("NI Act") cannot
be absolved pending corporate insolvency resolution proceedings
("CIRP") against the company under the
provisions of the Insolvency and Bankruptcy Code, 2016
("IBC").
Facts
In this case, one M/s Rainbow Papers Limited (Accused Company)
of which the Appellant herein was the Promoter and Managing
Director, sought a term loan of Rs. 30 crores from a public
financial institution (Respondent herein). In order to satisfy its
obligations under the Loan Agreement dated March 27, 2012, the
Accused Company issued a post-dated cheque towards payment of one
of the instalments, but the cheque was returned for the reason
"Account Closed",
