CIRP public announcement and moratorium bar: no separate creditor notice is required, but coercive recovery during moratorium is prohibited.
Publication of the corporate insolvency public announcement in one English newspaper and one regional-language newspaper with wide circulation satisfied Regulation 6(1), and the resolution professional was not required to issue separate individual notices to each creditor; the challenge on that ground failed. A creditor was required to submit its claim in response to the public invitation. During the moratorium, however, municipal demand and sealing action could not be pursued against the corporate debtor, because Section 14 barred coercive recovery and enforcement steps. The municipal notice and consequential action were therefore set aside, while compliance with the public notice requirement was upheld.
Issues: (i) Whether the public announcement issued in the corporate insolvency resolution process complied with Regulation 6(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, and whether the applicant could insist on a separate notice to file its claim. (ii) Whether the municipal demand notice and sealing action issued during the moratorium period were barred by Section 14 of the Insolvency and Bankruptcy Code, 2016.
Issue (i): Whether the public announcement issued in the corporate insolvency resolution process complied with Regulation 6(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, and whether the applicant could insist on a separate notice to file its claim.
Analysis: The public announcement was published in an English newspaper and in a Hindi newspaper having Rohtak edition, which satisfied the requirement of publication in one English and one regional language newspaper having wide circulation in the relevant location. The governing regulation obliges public notice inviting claims, but does not cast a duty on the resolution professional to issue individual notices to each creditor. A creditor must submit its claim upon such public invitation.
Conclusion: The challenge to the public announcement failed, and the application seeking rejection of the resolution plan was dismissed.
Issue (ii): Whether the municipal demand notice and sealing action issued during the moratorium period were barred by Section 14 of the Insolvency and Bankruptcy Code, 2016.
Analysis: Once moratorium commenced, proceedings and enforcement action against the corporate debtor could not continue, including execution of any order by any authority, and no action could be taken to recover or enforce demands in a manner contrary to the moratorium. The impugned notice demanding payment and threatening coercive steps was issued during the moratorium period and was inconsistent with the statutory bar.
Conclusion: The municipal notice and consequential coercive action were held to be barred by the moratorium and were set aside.
Final Conclusion: The judgment upheld compliance with the public notice requirement but protected the corporate debtor from coercive recovery action taken during the moratorium, resulting in mixed relief across the connected applications.
Ratio Decidendi: Publication of the insolvency public announcement in one English and one regional-language newspaper with wide circulation satisfies the prescribed notice requirement, and once moratorium under the insolvency code commences, coercive recovery or enforcement action against the corporate debtor by an authority is prohibited.
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