Liquidation Process Under IBC Code Halts Appeals; NCLT Approval Grants Liquidator Full Powers, Pausing Legal Proceedings.

The judgment dismisses all cross appeals in limine due to the initiation of the liquidation process under the IBC Code, 2016, which imposes a moratorium on legal proceedings against the corporate debtor. The NCLT's approval of the liquidation as a going concern vests all powers with the liquidator, barring any income tax proceedings without their consent. The appeals are consigned to records, allowing reinitiation upon directions from the committee of creditors, NCLT, or the liquidator post-process completion, granting liberty to the parties to pursue appeals later.

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Issues: Cross appeals filed by erstwhile company and department for various assessment years; Liquidation of company under IBC Code, 2016; Bar on legal proceedings during moratorium including income tax proceedings.

Analysis:
1. Cross Appeals: The judgment pertains to cross appeals filed by the erstwhile company and the department for assessment years from A.Y. 2008-09 to 2014-15.

2. Liquidation under IBC Code: The company in question has gone into liquidation, and proceedings under Section 7 of the IBC Code, 2016 have been initiated. The NCLT approved the liquidation of the corporate debtor as a going concern and appointed a liquidator. The liquidator is granted powers as per Section 34(1) of the Code and is directed to follow the liquidation process under the Insolvency & Bankruptcy Board of India (Liquidation Process) Regulations, 2016. All powers of the board of directors, key managerial personnel, and partners of the corporate debtor are vested with the liquidator. The liquidation order also includes directions for public notice, cooperation of corporate debtor personnel, and a bar on legal proceedings against the corporate debtor during moratorium.

3. Bar on Legal Proceedings: The judgment emphasizes that once the liquidation process is initiated, including the moratorium under Section 52 of the IBC, no suit or other legal proceedings can be instituted against the corporate debtor except with the liberty of the liquidator. This bar on legal proceedings encompasses income tax proceedings as well. Therefore, the judgment concludes that it is premature to decide the appeals on merits under these circumstances. The appeals are consigned to records, allowing the parties to reinitiate the appeals once directed by the committee of creditors, NCLT, or the liquidator after completion of the process. The appeals are dismissed in limine, subject to the liberty granted to the parties.

4. Conclusion: The judgment dismisses all appeals in limine, highlighting the impact of the liquidation process and the bar on legal proceedings during moratorium as per the IBC Code. The parties are given the liberty to pursue the appeals at a later stage based on directions from relevant authorities or the liquidator.

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