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21. Amplifying the submission, Mr.Joshi strenuously submitted that the relief by way of proposed amendment is primarily against Ajmera Realty (D5), the Society (D6) and Ajmera Luxe (R7). The character of Ajmera Realty (D5) and Ajmera Luxe (R7) is that of Vishal Parekar, PS 9 of 30 1-IA-1319-2024.doc third parties to CIRP. It is beyond the stretch of imagination that the third parties can be permitted to take benefit of the moratorium under section 14 of the IBC and defeat legitimate rights of the financial creditor by dealing with the assets of the corporate debtor, with impunity. Mr. Joshi urged with a degree of vehemence that by the proposed amendment and the reliefs which the plaintiff proposes to seek, the plaintiff is not at all endangering or touching the property of the corporate debtor. Laying emphasis on the object of the moratorium envisaged by section 14 of the IBC, Mr. Joshi would urge that the legal position has been crystallized by a catena of decisions that even the promoters and directors of the corporate debtor cannot claim immunity from the proceedings by invoking section 14 of the IBC much less the third parties like defendant Nos. 5 and 6 and respondent No. 7 herein. 

 Vishal Parekar, PS                    12 of 30





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26. Mr. Andhyarujina joined the issue of the protection under Section 14 of IBC being claimed by third parties, by canvassing a submission that resistance of defendant Nos. 5 and 6 and respondent No. 7 does not proceed on the premise that during the currency of moratorium no action can be initiated against them, but on a statutory ground that 'any action to enforce the security interest created by the corporate debtor' which, the plaintiff proposes to resort to, cannot be permitted. Mr. Andhyarujina would urge that the key words in clause (c) of sub section (1) of section 14 are "any action" and "in respect of its property". The word "any" expands the scope of the prohibition and is not restricted to a proceeding against the corporate debtor which is covered by clause (a) of sub section (1) of section 14. Irrespective of the parties to the proceedings, be it corporate debtor or the third parties, if the action is to enforce any security interest created by corporate debtor in respect of its property, the interdict contained in clause (c) of section 14(1) of IBC comes into play, urged Mr. Andhyarujina. Reliance was placed on a decision of the Supreme Court in the case of Shri Balaganesan Metals v/s. M.N. Shanmugham Chetty and Ors.8 wherein the wide amplitude of the word "any' was expounded.

37. It would be contextually relevant to note, in the case of P. Mohanraj (supra) the Supreme Court enunciated in clear and explicit terms that the moratorium contained in section 14 of IBC would apply to corporate debtor and not the natural persons who are liable to be prosecuted by invoking section 141 of the NI Act, 1881. The observations of the Supreme Court in paragraph 102 in the case of P. Mohanraj (supra) are instructive and hence extracted below.

102 Since the corporate debtor would be covered by the moratorium provision contained in Section 14 of the IBC, by which continuation of Section 138/141 proceedings against the corporate debtor and initiation of Section 138/141 proceedings against the said debtor during the corporate insolvency resolution process are interdicted, what is stated in paragraphs 51 and 59 in Aneeta Hada (supra) would then become applicable. The legal impediment contained in Section 14 of the IBC would make it impossible for such proceeding to continue or be instituted against the corporate debtor. Thus, for the period of moratorium, since no Section 138/141 proceeding can continue or be initiated against the corporate debtor because of a statutory bar, such proceedings can be initiated or continued against the persons mentioned in Section 141(1) and (2) of the Negotiable Instruments Act. This being the case, it is clear that the moratorium provision contained in Section 14 of the IBC would apply only to the corporate debtor, the natural persons mentioned in Section 141 continuing to be statutorily liable under Chapter XVII of the Negotiable Instruments Act.

45. In the aforesaid case, Delhi High Court, was confronted with the question as to whether the adjudication of the counter claim would be liable to be stayed in view of section 14 of IBC as the plaintiff who had instituted the suit was under Insolvency Vishal Parekar, PS 23 of 30 1-IA-1319-2024.doc Resolution Process. After adverting to its another judgment in the case of Power Grid Corporation of India vs. Jyoti Structures Limited13, the Delhi High Court held that until and unless the proceeding has the effect of endangering, diminishing, dissipating or adversely impacting the assets of corporate debtor, it would not be prohibited under Section 14(1)(a) of the Code. In the facts of the said case, the Delhi High Court, found that the counter claim did not deserve to be stayed under section 14 of the IBC and both the suits and counter claim ought to proceed to trial.