Moratorium under insolvency law does not stop a preserved winding up petition in the High Court.

Pending winding up petitions in which notice had been served before 15.12.2016 were treated as saved from transfer to the NCLT under the insolvency and company law notifications, so the High Court retained jurisdiction to continue with the petition. The moratorium under Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016 was stated not to restrain the High Court because it is not subordinate to the NCLT, and Section 41(b) of the Specific Relief Act, 1963 bars injunctions against proceedings in a non-subordinate court. The principle of comity was held inapplicable where statutory notifications preserved the High Court's jurisdiction.

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Issues: Whether the moratorium order passed by the NCLT under the Insolvency and Bankruptcy Code, 2016 barred the High Court from continuing with a pending winding up petition, and whether the petition remained within the High Court's jurisdiction in view of the notifications issued under the Insolvency and Bankruptcy Code, 2016 and the Companies Act, 2013.

Analysis: The statutory scheme was read to mean that pending winding up petitions in which notice had already been served before 15.12.2016 were saved from transfer to the Tribunal under the notifications issued under the Insolvency and Bankruptcy Code, 2016 and the Companies Act, 2013. Since the petition had not stood transferred, the High Court retained jurisdiction to proceed with it. The moratorium under Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016 was held not to operate so as to restrain the High Court, because the High Court is not a forum subordinate to the NCLT and the principle in Section 41(b) of the Specific Relief Act, 1963 prevents an injunction against proceedings in a court not subordinate to the court granting relief. The principle of comity of courts was also held inapplicable where the High Court's jurisdiction was preserved by the statutory notifications.

Conclusion: The objection that the NCLT's order barred continuation of the winding up petition was rejected, and the High Court held that it could proceed with the petition.

Ratio Decidendi: Where the governing insolvency notifications preserve a pending winding up petition in the High Court, a moratorium order of the NCLT cannot restrain continuation of that petition before a court not subordinate to it.

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