NCLT Mumbai Rules Pending Cheque-Bounce Case Does Not Bar Insolvency Plea

The National Company Law Tribunal (NCLT), Mumbai, held that the pendency of a cheque-bounce case under the Negotiable Instruments Act does not bar the initiation of insolvency proceedings.

The Tribunal admitted an application by Rexel India Private Limited to commence the corporate insolvency resolution process against Proto D Industries Private Limited.

The NCLT observed that the existence of a civil or criminal dispute relating to debt does not prevent the creditor from approaching the insolvency forum, provided default is established.

The ruling reaffirms that insolvency proceedings can proceed concurrently with other pending legal actions.

[Rexel India Pvt Ltd v. Proto D Industries Pvt Ltd]