New Delhi, May 28 -- The Supreme Court has referred to a larger Bench the issue of whether cheque bounce proceedings under Section 138 of the Negotiable Instruments Act can be stayed during the moratorium period under Part III of the Insolvency and Bankruptcy Code (IBC).

The court also observed that such proceedings are predominantly criminal in nature and not merely debt recovery actions.

Court Rejects Earlier View Treating Section 138 As Purely Civil

A Bench comprising Justice JB Pardiwala and Justice KV Viswanathan held that proceedings under Section 138 of the Negotiable Instruments Act cannot be treated purely as legal action for recovery of money.

The Court disagreed with the view expressed in the earlier judgment in P Mohanraj ...