Elecon Engineering Company Ltd. Vs. Energo Engineering Projects Ltd. & Ors

Hon’ble High Court held that legislature in its wisdom has decided not to include ‘pending suits or legal proceedings’ within the scope of moratorium under Section 33(5) of the IBC. To be noted that even the proviso to Section 33(5) of the IBC only uses the word ‘instituted’, but does not use the word ‘pending’. Further, in terms of the said proviso, even a fresh suit or legal proceedings may be instituted by the Liquidator with the prior approval of the Adjudicating Authority. So, unlike Section 14 of the IBC, under Section 33(5) of the IBC there is no absolute bar in a suit or legal proceedings continuing along with the liquidation proceedings. It also held that a reading of Section 63 of the IBC would reveal that the bar on the Civil Court is only to ‘entertain any suit or proceeding in respect of any matter on which NCLT has the jurisdiction under this Code’. This would not apply to suits, which were already pending before the commencement of liquidation proceedings.