# In the matter of Shashankbhai Jayantibhai Shah vs. HDFC Bank Ltd. & Ors.

> SC judgment dated 2025-04-23. Citation: TCN-2025-SC-00023. The appellant was convicted by the Additional Chief Metropolitan Magistrate for dishonoring a…

- **Court:** SC
- **Order date:** 23 Apr 2025
- **Citation:** TCN-2025-SC-00023
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/shashankbhai-jayantibhai-shah-vs-hdfc-bank-ltd-ors-4b10e9a2

## Summary

### Background

The appellant was convicted by the Additional Chief Metropolitan Magistrate for dishonoring a cheque under Section 138 of the Negotiable Instruments Act, 1881, and sentenced to imprisonment and compensation. An appeal was filed before the Sessions Court. During the appeal's pendency, the National Company Law Tribunal admitted a petition against the company, where the appellant was a director, and ordered its liquidation. The Sessions Court confirmed the Magistrate's order. The National Company Law Appellate Tribunal permitted proceedings under Section 138 of the N.I. Act to continue despite the moratorium. The appellant then questioned the appellate judgment in a revisional application before the High Court. The High Court directed suspension of sentence pending the

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## Facts

Shashankbhai Jayantibhai Shah, the appellant, was convicted by the Additional Chief Metropolitan Magistrate, NIA Court No.30, Ahmedabad, for dishonoring a cheque under Section 138 of the Negotiable Instruments Act, 1881, and was sentenced to two years imprisonment and ordered to pay Rs.2,50,00,000 as compensation. He appealed to the Sessions Court at Ahmedabad. During the pendency of the appeal, a petition was admitted by the National Company Law Tribunal, Ahmedabad, against the company where the appellant was a director. The National Company Law Tribunal ordered the liquidation of the company on March 19, 2018. The Sessions Court confirmed the Magistrate's order on July 26, 2018. The National Company Law Appellate Tribunal permitted proceedings under Section 138 of

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## Issues and analysis

### Issue 1: Whether the moratorium under the Insolvency and Bankruptcy Code (IBC) shields individuals from …

**Ratio:** The legislative intent behind the IBC is to provide a structured framework for the

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**Reasoning:** The court reasoned that proceedings under Section 138 of the N.I. Act pertain to the

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**Interpretation:** The court interpreted that the moratorium under Section 96 IBC is designed to

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**Application:** The court applied this principle to the appellant, stating that the moratorium

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## Parties

- **Judges:** DIPANKAR…; PRASHANT KUMAR…
- **Appellants:** SHASHANKBHAI…
- **Respondents:** HDFC Bank…

## Timeline

- **2017-04-03 — Conviction by M…**: The appellant was convicted by the Additional Chief Metropolitan Magistrate, NIA Court…
- **2018-03-19 — Liquidation…**: The National Company Law Tribunal passed an…

## 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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