# In the matter of Rakesh Bhanot & Ors. vs. Gurdas Agro Pvt. Ltd. & Ors.

> SC judgment dated 2025-04-01. Citation: TCN-2025-SC-00030. The case involves multiple criminal appeals and a writ petition, all addressing the common issue of…

- **Court:** SC
- **Order date:** 1 Apr 2025
- **Citation:** TCN-2025-SC-00030
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/rakesh-bhanot-ors-vs-gurdas-agro-pvt-ltd-ors-ee6ad654

## Summary

### Background

The case involves multiple criminal appeals and a writ petition, all addressing the common issue of whether proceedings under Section 138 of the Negotiable Instruments Act, 1881 should be stayed due to the interim moratorium under Section 96 of the Insolvency and Bankruptcy Code (IBC), 2016. The appeals challenge orders from various High Courts that dismissed petitions seeking to stay Section 138 proceedings. The appellants/petitioners initiated personal insolvency proceedings under the IBC and sought exemption from the Section 138 proceedings, arguing that the interim moratorium under Section 96 IBC should apply. The trial courts rejected these applications, and the High Courts affirmed those rejections.

## Facts

The appellants/petitioners are facing trial under Section 138/141 of the Negotiable Instruments Act, 1881, for cheque dishonor. They initiated personal insolvency proceedings under the IBC and sought a stay of the Section 138 proceedings, citing the interim moratorium under Section 96 IBC. The respondent, M/s Gurdas Agro Pvt. Ltd., filed a complaint under Section 138 of the N.I. Act, 1881, against M/s Arjun Mall Retail Holdings Pvt. Ltd. through its Director- Kiran Bhanot, Kiran Bhanot (wife of the appellant), Rakesh Bhanot (appellant herein), and Arjun Bhanot (their son). The complaint alleged that the accused issued four cheques each for Rs.50,00,000/- drawn on UCO Bank, Mid Corporate Industrial Area, Ludhiana, in order to discharge their legally enforceable

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## Issues and analysis

### Issue 1: Whether the proceedings initiated against the appellants/petitioners under Section 138 read with …

**Ratio:** The interim moratorium under Section 96 IBC is designed to offer a breathing space to the

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**Reasoning:** The court reasoned that Section 138 proceedings are distinct from corporate insolvency

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**Interpretation:** The court interpreted Section 96 IBC to provide protection against civil claims

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**Application:** The court applied the ratio and reasoning to the specific facts of the case,

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## Parties

- **Judges:** R. MAHA…; J.B. PARD…
- **Appellants:** RAKESH B…
- **Respondents:** M/s Arjun Mall…; M/S.GURDAS AGRO…
- **Other parties:** Modif…

## Timeline

- **2019-01-01 — Complaint…**: Complaint was taken on file as COMA No.1059/2019 and is pending adjudication before the…
- **2021-01-01 — Application for…**: Rakesh Bhanot filed an application in CP(IB) No.147/CHD/PB/2021 under Section 94 IBC…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 138 — Discharge order](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-138)

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