TaxTMI 
TaxTMI 
2022 (9) TMI 637
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....or being appointed, the present suit can proceed or not. The said issue was noted in the order dated 17th October, 2019 passed by this Court. Written submissions have been filed on behalf of the plaintiff as well as the defendant no.1 company. Oral submissions on behalf of the counsels have been heard on 23rd May, 2022, 30th May, 2022, 18th August, 2022 and 31st August, 2022. 2. The present suit was filed seeking relief of permanent injunction restraining the defendant no.1 company from encashment of bank guarantees and for recovery of a sum of Rs.10,69,77,650/- against the defendant no.1. 3. It is the case of the plaintiff that the defendant no.1 had wrongfully and unlawfully invoked/encashed the contract performance bank guarantees and advance bank guarantees issued by the defendant no.2 and defendant no.3 respectively. 4. Vide order dated 27th February, 2017, while issuing summons in the suit, this Court had granted an ad interim injunction against payments under the bank guarantees being made to the defendant no.1. In view of the insolvency proceedings initiated against the defendant no.1, the present suit was stayed vide order dated 14th November, 2017. Subsequently, ....
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....on proceedings. Therefore, he submits that the Court should interpret Section 33(5) of the IBC in a manner that the moratorium provided under the said Section would cover pending suits as well. Counsel for the Liquidator has placed reliance on the Report of the Insolvency Law Committee dated 20th February, 2020 to submit that the omission of 'pending suits and legal proceedings' under Section 33(5) of the IBC seems to be an error. 9. Reliance is placed on the judgment in Guru Gobind Singh Indraprastha University v. Naincy Sagar & Anr., 2019 (178) DRJ 372, to submit that while interpreting a Statute, Court should reject a construction that results in defeating the intent behind the Statue. 10. Reliance is also placed on the judgment in Delhi High Court Bar Association & Anr. v. Govt. of NCT of Delhi & Anr., 2013 (203) DLT 129, to submit that the Court should rely upon the Statement of Objects and Reasons of a Statute for appreciating the true intent of the legislature. 11. I have heard the rival submissions. 12. At the outset, the Relevant provisions of Section 13, Section 14, Section 33(5), Section 60(5), Section 63 and Section 231 of the IBC are set out below: ....
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....isdiction to entertain any suit or proceedings in respect of any matter on which National Company Law Tribunal or the National Company Law Appellate Tribunal has jurisdiction under this Code. Civil court not to have jurisdiction. xxx xxx xxx xxx 231. Bar of jurisdiction. - No civil court shall have jurisdiction in respect of any matter in which the [Adjudicating Authority or the Board] is empowered by, or under, this Code to pass any order and no injunction shall be granted by any court or other authority in respect of any action taken on to be taken in pursuance of any order passed by such [Adjudicating Authority or the Board] under this Code." 13. From the language of Section 33(5) of the IBC, it is clear that the bar/moratorium is only in respect of fresh suits or legal proceedings. Unlike the moratorium under Section 14 of the IBC, where it is clearly noted that the moratorium is in respect of institution of suits or continuation of pending suits or proceedings against corporate debtor, the words "continuation of pending suits or proceedings" are conspicuously absent in Section 33(5) of the IBC. 14. Section 33(5) of the IBC came up for consid....
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....iew was taken by Kerala High Court in The Liquidator of The Corporate Debtor, Viz., Orieon Kuries And Loans Private Limited v. The State of Kerala And Ors. MANU/KE/1245/2022. It was specifically observed in the said judgment that unlike Section 14(1)(a) of the IBC, under Section 33(5) of the IBC there is no prohibition for continuance of already instituted suits and proceedings. The moment the liquidation proceedings commence, there would be a bar only in respect of fresh suits or proceedings in terms of Section 33(5) of the Code. However, the pending suits and proceedings shall continue. In view thereof, the Kerala High Court upheld the order passed by the Controlling Authority under the Minimum Wages Act, 1948 even though the same was passed during the liquidation process. 17. I am in respectful agreement with the views expressed by Madras High Court and Kerala High Court above. To appreciate the difference in the language of Sections 14 and 33(5) of the IBC it may be useful to refer to the scheme of the IBC in the context of the aforesaid Sections. Section 14 and Section 33 are part of two separate Chapters of IBC. Section 14 is part of Chapter II which deals with 'Corporate ....
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....ot be continued as the claims made in the said suit fall within the jurisdiction of NCLT. Reliance is also placed on Section 60(5) of the IBC. 20. A reading of Section 63 of the IBC would reveal that the bar on the Civil Court is only to 'entertain any suit or proceeding in respect of any matter on which NCLT has the jurisdiction under this Code'. This would not apply to suits, which were already pending before the commencement of liquidation proceedings. Section 231 of the IBC, inter alia states that no injunction shall be granted by a Court in respect of action taken in pursuance to any order passed by the Adjudicating Authority. The intent is clear that the bar is only in respect of civil suits filed after an order has been passed by the Adjudicating Authority. In my view, the aforesaid bar under Sections 63 and 231 of the IBC would only be in respect of fresh suits. Sections 63 and 231 of the IBC cannot be read in manner so as to defeat the provisions of Section 33(5) of the IBC. If Sections 63 and 231 of the IBC are interpreted in the manner canvased by the counsel for the Liquidator, the provision of Section 33(5) of the IBC would be rendered otiose and the moratorium unde....
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....ngs of the corporate debtor from the scope of moratorium provided under Section 33(5) of the IBC seems to be an error. Further, the Committee recommended that suitable amendments should be made to Section 33(5) of the IBC so that leave of the Adjudicating Authority is also required for continuing any pending suit or legal proceeding by or against the corporate debtor undergoing liquidation. The said report is of 20th February, 2020 and the IBC has been amended many times thereafter. However, the legislature in its wisdom has not made any amendments in respect of Section 33(5) of the IBC. Therefore, the reliance placed on the Report of the Insolvency Law Committee is misplaced. It cannot even be stated that the legislature was not aware of the omission in view of the fact that the words 'pending suit or legal proceedings' have been specifically used in Section 14 of the IBC. 23. In any event, the submission of the counsel for the liquidator that words which are missing from the language of Section 33(5) of the IBC can be added by the Court is completely against the rule of casus omissus, in terms of which, an omission in a statute cannot be supplied by judicial interpretation. ....
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....R 1961 SC 1107] , Balasinor Nagrik Coop. Bank Ltd. v. Babubhai Shankerlal Pandya [(1987) 1 SCC 606 : AIR 1987 SC 849] and Dadi Jagannadham v. Jammulu Ramulu [(2001) 7 SCC 71] , SCC pp. 78-79, para 13.)" 26. In light of the aforesaid legal principles, even if it is assumed that there was an omission on behalf of the legislature in not applying the moratorium under Section 33(5) of the IBC to pending suits, the same cannot be supplied by the Courts. It is for the legislature to amend the statute. 27. In view of my finding above that there appears to be no error or omission in Section 33(5) of the IBC, the judgements in Guru Gobind Singh Indraprastha University (supra) and Delhi High Court Bar Association (supra) cited by the counsel for the Liquidator have no application in the present case. 28. Counsel for the Liquidator has relied upon an order dated 25^th September, 2019 passed by the National Company Law Appellate Tribunal (NCLAT), New Delhi in Company Appeal (AT) (Insolvency) No.230 of 2019 titled KSB Shanghai Pump Co. Ltd. v. Lanco InfraTech Ltd. and Ors. In the said case, the Resolution Professional in respect of the corporate debtor, invoked the performance bank guar....