Supreme Court holds that Section 14 of the Insolvency and Bankruptcy Code is wide enough to include proceedings under Section 34 of the Act
M/s. Shah Brothers Ispat Pvt. Ltd (“Respondent”) and M/s Diamond Engineering Pvt. Ltd. (“Company”) executed a contract pursuant to which the Respondent had to supply steel to the Company. An amount of INR 24,20,91,054/- was due and payable from the Company to the Respondent. The Company issued 51 cheques in favour of the Respondent. However, the cheques were dishonoured on the grounds of insufficient funds.
The Respondent issued demand notice(s) calling upon the Company and the Appellants to pay the due amount and upon the Company’s failure to do so, instituted two criminal proceedings under Sections 138 and 141 of the Negotiable Instruments Act, 1881 (“NI Act”) against the Company and the Appellants before the Additional Chief Metropolitan Magistrate, Mumbai.
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