Kusum Ingots And Alloys Ltd vs Pennar Peterson Securities Ltd. And Ors

The Supreme Court held that a company and its Directors can be prosecuted under Section 138 of the Negotiable Instruments Act, 1881, even after the company has been declared sick under The Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). The Court clarified that Section 22 of SICA does not apply to criminal proceedings and does not prevent the initiation of such proceedings for dishonored cheques. Consequently, the appeals challenging the High Court's dismissal of quashing petitions were rejected, affirming the validity of the criminal complaints against the company and its Directors.