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ARTICLE · 20 MARCH 2025

Section 138 NI Act And IBC Moratorium: Supreme Court Defines The Boundaries

IndiaLaw LLP
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The Supreme Court of India recently delivered a significant judgment in the case of Vishnoo Mittal versus M/S Shakti Trading Company, addressing the interplay between insolvency proceedings and criminal prosecutions.

IndiaLitigation, Mediation & Arbitration
Rahul Sundaram
Rahul Sundaram

The Supreme Court of India recently delivered a significant judgment in the case of Vishnoo Mittal versus M/S Shakti Trading Company, addressing the interplay between insolvency proceedings and criminal prosecutions under the Negotiable Instruments Act.

Background of the Case

This legal battle arose from a business relationship between Vishnoo Mittal, director of Xalta Food and Beverages Private Limited, and M/S Shakti Trading Company, which served as a super stockist for the corporate entity. The respondent had issued eleven cheques totalling Rs.11,17,326/- to M/S Shakti Trading Company, which were subsequently dishonoured by the bank on 07.07.2018.

Key Facts

Following the dishonour of these cheques, M/S Shakti Trading Company issued a legal notice under Section 138 of the Negotiable Instruments Act on 06.08.2018. Importantly, insolvency proceedings against Xalta Food and Beverages Private Limited had commenced on 25.07.2018, with a moratorium imposed under

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