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An unjustified interference with the proceedings initiated under the Insolvency and Bankruptcy Code 2016, breaches the discipline of law – Mohammed Enterprises (Tanzania) Ltd. Vs. Farooq Ali Khan and Ors. – Supreme Court

(2025) ibclaw.in 03 SC IN THE SUPREME COURT OF INDIA Mohammed Enterprises (Tanzania) Ltd. v. Farooq Ali Khan and […]

An unjustified interference with the proceedings initiated under the Insolvency and Bankruptcy Code 2016, breaches the discipline of law – Mohammed Enterprises (Tanzania) Ltd. Vs. Farooq Ali Khan and Ors. – Supreme Court Read Post »

Even after Agreement to Assign, IBC Section 7 application filed by Financial Creditor (assignor) against Corporate Debtor is maintainable – JM Financial Asset Reconstruction Company Ltd. Vs. Howrah Mills Company Ltd. and Anr. – NCLAT New Delhi

Hon’ble NCLAT held that:

(i) Agreement dated 15.01.2020 was only agreement to assign and was not assignment agreement. Purchase consideration has not been paid. No document of assignment has yet been executed by the appellant in favour of Intending Assignee.
(ii) In any view of the matter, the debt of financial creditor has not been assigned to Intending Assignee till date. The Appellant continue to be creditor and the Corporate Debtor as a debtor.
(iii) Section 231 of the IBC which contains an injunction which is couched in negative term that “no civil court shall have jurisdiction in respect of any matter in which the Adjudicating Authority or the Board is empowered by, or under, this Code to pass any order”.
(iv) The interim injunction order passed by Court can have no effect on continuous of Section 7 application.
(v) The intending assignment having never taken place, the debt cannot be held to be assigned to Intending Assignee so that the Intending Assignee may step into the shoes of the financial creditor of the corporate debtor.

Even after Agreement to Assign, IBC Section 7 application filed by Financial Creditor (assignor) against Corporate Debtor is maintainable – JM Financial Asset Reconstruction Company Ltd. Vs. Howrah Mills Company Ltd. and Anr. – NCLAT New Delhi Read Post »

Whether attachment order passed prior to initiation of CIRP of Award Debtor shall remain unaffected to ensure the realization of the decretal dues or arbitral award? – Candor Gurgaon Two Developers & Projects Pvt. Ltd. Vs. Srei Infrastructure Finance Ltd. – Calcutta High Court

Hon’ble Calcutta High Court held that:
(i) Following the procedure as laid down under the IBC, 2016, once Resolution Applicant submits resolution plan and it is approved by the committee of creditors, the Adjudicating Authority is to take the call and once such plan is accepted the moratorium under Section 14 of the Code ceased to operate. But that does not permit the proceeding including one in the execution to dance back to life. The provision as laid down under Section 31 of the Code of 2016 takes over.
(ii) The execution proceeding appears to be not maintainable for the simple reason that if by way of execution the claim is satisfied and thereby the quantum of money is realized and given to the Corporate Creditor (in this case the Award Holder) it would amount to preferential transaction, which is not permitted under Section 43 of the IBC, 2016.
(iii) The provision of Section 231 of the IBC, 2016 is eloquent about ouster of jurisdiction of Civil Code in respect of matter in which the Adjudicating Authority or the Board is empowered by or under the Code of 2016. The order of attachment in favour of the Award Holder, in view of Section 238 of the IBC, 2016 as a natural corollary shall be void.

Whether attachment order passed prior to initiation of CIRP of Award Debtor shall remain unaffected to ensure the realization of the decretal dues or arbitral award? – Candor Gurgaon Two Developers & Projects Pvt. Ltd. Vs. Srei Infrastructure Finance Ltd. – Calcutta High Court Read Post »

High Court has no territorial jurisdiction to entertain prayers with respect to debt assignment deed which is a subject matter of proceedings before NCLT/NCLAT | Jurisdiction vested in NCLT while dealing with a resolution plan is of wide ambit and any question of law or fact in relation to insolvency resolution has to be determined by NCLT – Tejinder Pal Setia v. Kone Elevators India Pvt. Ltd. and Anr. – Delhi High Court

Hon’ble Delhi High Court held that:
(i) As such, this Court has no territorial jurisdiction to entertain the prayers of the plaintiff with respect to the assignment deed dated 03.02.2023, which is the fulcrum of the present suit.
(ii) Sections 63 and 231 IBC create a bar on the jurisdiction of the civil court in respect of any matter in which the NCLT and NCLAT has jurisdiction under the IBC and the adjudicating authority under the Code is competent to pass any order.
(iii) The jurisdiction vested in NCLT while dealing with a resolution plan is of wide ambit and any question of law or fact in relation to the insolvency resolution has to be determined by the NCLT.

High Court has no territorial jurisdiction to entertain prayers with respect to debt assignment deed which is a subject matter of proceedings before NCLT/NCLAT | Jurisdiction vested in NCLT while dealing with a resolution plan is of wide ambit and any question of law or fact in relation to insolvency resolution has to be determined by NCLT – Tejinder Pal Setia v. Kone Elevators India Pvt. Ltd. and Anr. – Delhi High Court Read Post »

Whether a judgment creditor can withdraw decretal amount/money deposited by Corporate Debtor (judgment debtor) in a Trial Court during moratorium under Section 14 of IBC – Reliance Communication Ltd. Vs. Rajendra P. Bansal – Bombay High Court

Hon’ble High Court held that NCLT could never sit in appeal over the judgment/decree of a Civil Court. Such a judgment/decree can only be corrected in appeal and, therefore, the NCLT would not have jurisdiction to hear and decide the First Appeal. Section 231 creates a bar on the jurisdiction of a civil court only where the Adjudicating Authority (i.e., NCLT in this case) has the jurisdiction over a given issue. The moratorium that is imposed under Section 14 applies only to proceedings against the corporate debtor and only applies qua the assets and properties of the corporate debtor. If monies deposited in court or any other asset/property does not belong to the corporate debtor, the moratorium would not preclude/prevent a creditor from enforcing its rights against the monies/assets/properties.

Whether a judgment creditor can withdraw decretal amount/money deposited by Corporate Debtor (judgment debtor) in a Trial Court during moratorium under Section 14 of IBC – Reliance Communication Ltd. Vs. Rajendra P. Bansal – Bombay High Court Read Post »

Issue of claim any injunction before High Court during pendency of the Liquidation proceeding – Alliance Broadband Services Pvt. Ltd. Vs. Manthan Broadband Services Pvt. Ltd. – Calcutta High Court

In this case, The Liquidator has refused to recognize the petitioner as secured creditor or to allow the petitioner to sell the pledged shares towards the partial satisfaction of the claim of the petitioner against the respondent. Hon’ble High Court held that as per Section 238 of the IBC, 2016 is having override effect in any other law for the time being in force. In view of my prima facie findings that this Court cannot pass any interim order at this stage. This Court is of the view that the matter in issue in the suit can be more appropriately and effectively decided and adjudicated by the NCLT. In the present case, Section 430 of the Companies Act, 2013 itself provides an additional bar by stating that no injunction shall be granted by any civil court in respect of any action taken or to be taken in pursuance of any power conferred on the NCLT by the Companies Act, 2013.

Issue of claim any injunction before High Court during pendency of the Liquidation proceeding – Alliance Broadband Services Pvt. Ltd. Vs. Manthan Broadband Services Pvt. Ltd. – Calcutta High Court Read Post »

As Section 238 of the Code is having the override effect in any other law for the time being in force and thus the suit cannot be proceeded further as the claim made by the plaintiff in the instant suit is similar to the claim raised before the Liquidator – C. Surendra Trading & Investment Pvt. Ltd. Vs. Aditi E-Oils Pvt Ltd. & Anr. – Calcutta High Court

In the instant case, one of the financial creditors of the defendant had initiated proceeding under Section 7 of the Insolvency and Bankruptcy Code 2016 against the defendant and the Tribunal had admitted the application and appointed Liquidator. The Liquidator had made Public announcement calling upon all the stakeholders of the defendant company for submission of their respective claim, if any, and the plaintiff has lodged its claim before the Liquidator but the same was rejected on the ground of limitation but in appeal the Learned Tribunal had admitted the claim of the plaintiff and admittedly the same is to be adjudicated by the Liquidator.

As Section 238 of the Code is having the override effect in any other law for the time being in force and thus the suit cannot be proceeded further as the claim made by the plaintiff in the instant suit is similar to the claim raised before the Liquidator – C. Surendra Trading & Investment Pvt. Ltd. Vs. Aditi E-Oils Pvt Ltd. & Anr. – Calcutta High Court Read Post »

It is ultra vires the IBC to invoke the provisions of the Companies Act, in the absence of any specific provision in the Code or Rules permitting such invocation – Ashok Velamur Seshadri, Liquidator of M/s. Archana Motors Pvt. Ltd. Vs. Shibu Job Cheeran Suspended Managing Director of Archana Motors Pvt. Ltd. – NCLT Kochi Bench

In this case, the Petition is filed by the Liquidator as an Execution Application under Section 424 (3) of Companies Act, 2013 R/w Rule 56 of NCLT Rules, 2016. The Applicant filed the petition under Companies Act, 2013, R/w Rule 56 of NCLT Rules, 2016, to execute the order passed under Sec. 66, IBC. Time and again it is held that IBC is a self-contained code with objective to maximise value in a timely manner. When the Code provides certain mode for execution of orders it is unnecessary to proceed under the different Act. In fact, it is ultra vires the IBC to invoke the provisions of the Companies Act, in the absence of any specific provision in the Code or Rules permitting such invocation.

It is ultra vires the IBC to invoke the provisions of the Companies Act, in the absence of any specific provision in the Code or Rules permitting such invocation – Ashok Velamur Seshadri, Liquidator of M/s. Archana Motors Pvt. Ltd. Vs. Shibu Job Cheeran Suspended Managing Director of Archana Motors Pvt. Ltd. – NCLT Kochi Bench Read Post »

Unlike Section 14 of IBC (CIRP Moratorium), under Section 33(5) of IBC (Liquidation Moratorium) there is no absolute bar in a suit or legal proceedings continuing along with the Liquidation proceedings. Bar on the Civil Court u/s 63 and 231 of IBC would only be in respect of fresh suits – Elecon Engineering Company Ltd. Vs. Energo Engineering Projects Ltd. & Ors – Delhi High Court

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.

Unlike Section 14 of IBC (CIRP Moratorium), under Section 33(5) of IBC (Liquidation Moratorium) there is no absolute bar in a suit or legal proceedings continuing along with the Liquidation proceedings. Bar on the Civil Court u/s 63 and 231 of IBC would only be in respect of fresh suits – Elecon Engineering Company Ltd. Vs. Energo Engineering Projects Ltd. & Ors – Delhi High Court Read Post »

Sale Deeds were executed by the Corporate Debtor prior to CIRP cannot be cancelled during the CIRP – Yes Bank Ltd. Vs. Suresh Kumar Jain & Ors. – NCLAT New Delhi

The CIRP against the Corporate Debtor was initiated by order dated 19.09.2019 on Section 7 Application filed by a Financial Creditor. The Sale Deeds which were sought to be cancelled were executed by the Corporate Debtor prior to the CIRP. NCLAT held that we are of the view that there was no occasion to cancel the Sale Deed in the application which was filed by the Resolution Professional under Section 60(5) r/w Section 25, 68, 14, 231 & 238 and the Adjudicating Authority has rightly rejected the Application.

Sale Deeds were executed by the Corporate Debtor prior to CIRP cannot be cancelled during the CIRP – Yes Bank Ltd. Vs. Suresh Kumar Jain & Ors. – NCLAT New Delhi Read Post »

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