# In the matter of Vijay Kumar Ghai
Vs.
Pritpal Singh Babbar CRM-M-22685-2021 (O&M)

> HC judgment dated 2022-07-04. Citation: TCN-2022-HC-00034. The petitioner, Vijay Kumar Ghai, challenged an order passed by the learned JMIC, Jalandhar, dated…

- **Court:** HC
- **Order date:** 4 Jul 2022
- **Citation:** TCN-2022-HC-00034
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/vijay-kumar-ghai-vs-pritpal-singh-babbar-crm-m-22685-2021-e173996b

## Summary

### Background

The petitioner, Vijay Kumar Ghai, challenged an order passed by the learned JMIC, Jalandhar, dated 25.05.2021, which dismissed his application seeking a stay on proceedings initiated under Section 138 of the Negotiable Instruments Act, 1881. The petitioner argued that filing an application under Section 94 of the Insolvency and Bankruptcy Code, 2016 (IBC), should automatically stay proceedings under Section 138, even if the cheque was issued in his personal capacity and not in discharge of any corporate debt. The respondent, Pritpal Singh Babbar, claimed the petitioner requested a loan of Rs.1,00,000 for business, later issuing a cheque for Rs.11,00,000 which was dishonored. The respondent issued a legal notice on 02.03.2012, and filed a complaint on 21.03.2012 when

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## Facts

Vijay Kumar Ghai, the petitioner, is a personal guarantor for M/s Priknit Retails Limited, a company undergoing liquidation under Section 7 of the IBC. Pritpal Singh Babbar, the respondent, filed a complaint against Ghai under Section 138 of the Negotiable Instruments Act, 1881, due to a dishonored cheque issued in 2012. The cheque was allegedly issued for repayment of a personal loan taken by Ghai from Babbar. Ghai filed an application under Section 94 of the IBC in December 2020, seeking initiation of an insolvency resolution process. The JMIC dismissed Ghai's application for a stay on the Section 138 proceedings, leading Ghai to file a petition in the High Court. The key facts are the personal loan, the dishonored cheque, the Section 138 complaint, the IBC

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## Issues and analysis

### Issue 1: Whether the complaint under Section 138 of the Act of 1881 would fall within the ambit of the …

**Ratio:** The court interpreted the phrases "all the debts" and "any legal actions

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**Reasoning:** The court reasoned that unless the wordings of a statute are "unworkable" or

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**Interpretation:** The court interpreted the terms "all the debts" and "any legal

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**Application:** The court applied this interpretation to the facts of the case, holding that

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## Parties

- **Judges:** Amol Rattan…
- **Appellants:** Vijay Kuma…
- **Respondents:** Priknit Retails…; Pritpal Singh…
- **Other parties:** Kohi…
- **Advocates:** Aalok J…; Bal Krishan…

## Timeline

- **2012-03-02 — Legal Notice…**: Respondent issued a legal notice to the petitioner in terms of Section 138 of the…
- **2012-03-21 — Complaint…**: Respondent filed a complaint against the petitioner under Section 138 of the Negotiable…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 94 — Application by debtor to initiate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-94)

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