Preserved insolvency claims may survive resolution plan approval when a pending recovery suit is expressly kept sub judice.

A pending civil recovery suit by an operational creditor was not extinguished by completion of the corporate insolvency resolution process where the approved resolution plan itself identified the claim as sub judice. The Insolvency and Bankruptcy Code moratorium under section 14 operated only during the insolvency period and ceased on approval of the resolution plan under section 31. Because the plan and its annexures preserved the creditor's claim and provided an operational creditors settlement amount, the suit remained necessary to determine the crystallized sum payable from the earmarked fund. Sections 63 and 238 were therefore not treated as defeating the preserved claim, and the suit was held maintainable.

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Issues: Whether a civil suit for recovery filed by an operational creditor survives after initiation and completion of the corporate insolvency resolution process and approval of the resolution plan, where the claim is already reflected in the resolution plan as a sub judice claim.

Analysis: The corporate insolvency resolution framework was treated as a complete code intended to revive the corporate debtor while protecting creditor interests. The moratorium under section 14 of the Insolvency and Bankruptcy Code, 2016 bars institution or continuation of suits only during the insolvency period and ceases once the resolution plan is approved under section 31. The resolution plan and its annexures specifically recognized the respondent's pending recovery suit as a sub judice claim and provided for an operational creditors settlement amount, indicating that such claims were not extinguished but were to be taken into account within the plan. The bar under section 63 and the overriding effect under section 238 were held inapplicable to defeat a claim already preserved within the resolution mechanism. The plan did not require dismissal of the pending civil suit, because the suit was necessary to determine the crystallized amount payable from the earmarked settlement fund.

Conclusion: The civil suit was held to be maintainable and not extinguished by the insolvency resolution process; the application to dismiss the suit was correctly rejected, and the writ petition failed.

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