Justice Navin Chawla

A perusal of the provisions of the IBC and the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, as amended, shows that the amounts due to operational creditors under a resolution plan are to be given priority in payment over financial creditors. Thus, the IBC gives importance to the amounts due to operational creditors like respondent No.1. The question is, whether an operational creditor like respondent No.1 could be deprived of amounts due to it, only because a civil suit initiated before the Civil Court is still pending and the dues, if any, are yet to be crystallized. In other words, whether a resolution plan takes into account and encapsulates sub judice claims of operational creditors like respondent No.1 herein.(p19-20)

The emphasis placed by the learned counsel appearing for the petitioner on section 14 of the IBC and the moratorium contemplated therein, can be of no assistance to the petitioner to show any error in the impugned order passed by the Trial Court. There can be no quarrel with the proposition that upon the commencement of the insolvency proceedings, there shall be moratorium on institution of suit or continuation of pending suits, but the said moratorium does come to an end upon completion of the corporate insolvency resolution process. Such a moratorium cannot lead to a conclusion that pending suits like the suit for recovery filed by respondent No.1 herein, would be liable to be dismissed, upon the resolution process being undertaken.(p27)