Moratorium prohibition contained in clause (c) of Section 14(1) of IBC appears to be of wide amplitude than the bar to the suit or proceedings against the Corporate Debtor under clause (a) of Section 14(1) – Edelweiss Asset Reconstruction Company Ltd. Vs. Meeti Developers Pvt. Ltd. – Bombay High Court
Hon’ble Bombay High Court held that:
(i) The focus under clause (a) of Section 14(1) of IBC is on the suit or proceedings against the corporate debtor but under clause (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor over its property is prohibited.
(ii) Though there is an element of continuity and action against the corporate debtor may fall both under clause (a) and (c), a situation, governed by clause (c), is not inconceivable where the corporate debtor may not be necessarily involved as a party.
(iii) The prohibition contained in clause (c) appears to be of wide amplitude than the bar to the suit or proceedings against the corporate debtor under clause (a).
(iv) The decisions in SSMP Industries Ltd Vs. Perkan Food Processors Pvt. Ltd. [2019] ibclaw.in 07 HC, Power Grid Corporation of India vs. Jyoti Structures Ltd. (2017) ibclaw.in 12 HC and Trading Engineers International Ltd. Vs. U.P. Power Transmission Corp. Ltd. (2022) ibclaw.in 215 HC primarily deal with the prohibition contained in clause (a) of section 14(1) of the IBC. These decisions did not deal with a situation covered by clause (c) of section 14(1).
