Delhi High Court - Orders
M/S. Cmi Energy India Pvt. Ltd vs M/S. Easun Reyrolle Limited on 29 August, 2022
$~12
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(COMM) 224/2017
M/S. CMI ENERGY INDIA PVT. LTD. ..... Plaintiff
Through: Mr. Sudhir Sukhiji, Advocate.
versus
M/S. EASUN REYROLLE LIMITED ..... Defendant
Through: None.
CORAM:
HON'BLE MS. JUSTICE MINI PUSHKARNA
ORDER
% 29.08.2022
7. Learned counsel for the plaintiff submits that the defendant is under insolvency proceedings and a Resolution Professional (in short „RP‟) has already been appointed by NCLT, Chennai. He further submits that on behalf of the plaintiff, a claim has already been filed before the RP.
8. Since the plaintiff has already filed his claim before the RP on 21.03.2022, the present suit cannot continue in view of the mandate of The Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as „The Code‟). It is now settled law that proceedings under the Insolvency and Bankcruptcy Code would take precedence and any moratorium issued therein would automatically bind any pending proceedings. Further, reference may be made to Section 33 (5) of The Code, which states as under:
Signature Not Verified Digitally Signed By:PREETI Signing Date:07.09.2022 11:25:23"33. ......
(5) Subject to section 52, when a liquidation order has been passed, no suit or other legal proceeding shall be instituted by or against the corporate debtor:
Provided that a suit or other legal proceeding may be instituted by the liquidator, on behalf of the corporate debtor, with the prior approval of the Adjudicating Authority."
9. As regards the Corporate Insolvency Resolution Process (CIRP), Hon‟ble Supreme Court in the case of Anand Rao Korada, Resolution Profession vs. Varsha Fabrics (P) Ltd. and Others, (2020) 14 SCC 198 , has held as follows:
"9. Section 238 gives an overriding effect to the IBC over all other laws. The provisions of the IBC vest exclusive jurisdiction on NCLT and NCLAT to deal with all issues pertaining to the insolvency process of a corporate debtor, and the mode and manner of disposal of its assets. Section 238 reads as follows:
"238. Provisions of this Code to override other laws.--The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law."
10. Section 231 of the IBC bars the jurisdiction of civil courts in respect of any matter in which the adjudicating authority i.e. NCLT or Nclat is empowered by the Code to pass any order. Section 231 is set out hereinbelow for ready reference:
"231. Bar of jurisdiction.--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 and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any order passed Signature Not Verified Digitally Signed By:PREETI Signing Date:07.09.2022 11:25:23 by such adjudicating authority or the Board under this Code."
10. Similarly, in the case of Alchemist Asset Reconstruction Company Limited vs. Hotel Gaudavan (P) Ltd., (2018) 16 SCC 94 :
"4. The mandate of the new Insolvency Code is that the moment an insolvency petition is admitted, the moratorium that comes into effect under Section 14(1)(a) expressly interdicts institution or continuation of pending suits or proceedings against corporate debtors."
11. In view of the aforesaid, the present suit is disposed of. However, liberty is granted to the plaintiff to revive the suit in case the claim so survives or in case such a course of action is available to him.
12. The suit is disposed of accordingly.
MINI PUSHKARNA, J AUGUST 29, 2022 PB Signature Not Verified Digitally Signed By:PREETI Signing Date:07.09.2022 11:25:23