TaxTMI 
TaxTMI 
TaxTMI 
2025 (5) TMI 2003
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....bakar), a petition under Section 95 of the I & B Code, 2016, for initiation of the personal insolvency proceedings has already been already initiated against the Personal Guarantors (PG) by way of C.P. (IB) No. 785/2020 by IDBI Trusteeship Services Limited and when the same is pending consideration and the interim moratorium is in force, in the light of the provisions contained under Section 96 of the I & B Code, 2016, no legal proceedings can be initiated against the Personal Guarantor by any other Financial Creditor. The question, which arose for consideration was as to, "whether, at the stage when the moratorium has been imposed under Section 96 of the I & B Code, 2016, whether at all, any other legal proceedings can be initiated by the Personal Guarantors, by any other Financial Creditor". The answer to the aforesaid question has been given in a negative by the Ld. Tribunal by the impugned order dated 13.12.2024 holding thereof that, owing to the specific bar created by Section 96 of the I & B Code, 2016, subsequent filing of an application under Section 95 of the I & B Code, 2016, by another Financial Creditor during the period of subsistence of an Interim Moratorium, would no....
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....instant case, particularly, when the provisions of the I & B Code under Section 238, has been given an overriding effect since being a special statute, which contemplates the conclusion of the proceedings in a time bound fashion, whereas the principle, of rule of mischief has been considered by the Hon'ble Apex Court in the matters pertaining to the issue of grant of permanent registration to those acquiring foreign medical degrees by the Medical Council of India, where the issue involved was as to whether the persons acquiring medical qualification granted by a Medical College in Nepal, which is recognized by the Medical Council of India, should be granted provisional as well as permanent registration without qualifying the screening test. The entire controversy, was confined to the domain of medical education, governed under the Indian Medical Council Act, 1933 and later on under the Indian Medical Council Act, 1956. In the said Acts certain restrictions were imposed upon with regards to licensing of the members of the medical profession who have obtained foreign medical qualification in order to enable them to practice in India in accordance with the provisions of the said Acts.....
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.... which has been upheld, holding it to be, not to be ultra-vires to the Constitution of India. 7. The alleged concept of the 'mischief rule', as it has been sought to be argued by the Ld. Counsel for the Appellant in the context of the provisions contained under Section 96(1) of the I & B Code, 2016, creating a bar against initiation of a proceeding by the Financial Creditor as against the Corporate Debtor, this Appellate Tribunal is of the view that, it doesn't at all barges upon to bring the issue within the ambit of the principles of the 'mischief rule', as argued by the Ld. Counsel for the Appellant. 8. We have been consistently facing this situation in quite a number of occasions, in various proceedings which are being carried before this Appellate Tribunal, where particularly the counsels had been taking their written submissions as submitted before the Ld. NCLT, as to be the basis of the appeal, so as to elaborate their argument in the appeal, preferred under Section 61, of the I & B Code, 2016 or under Section 421 of the Companies Act, 2013. Often this controversy has been in debate "whether written submissions could at all be treated as to be a pleading". We are of th....
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..... Meaning thereby, though the law doesn't create an absolute bar that, subsequent pleadings cannot be taken on record, they are permissible but subject to satisfying the conditions contained under Order VIII Rule 9, of Civil Procedure Code, 1908, that there has had to be a prior permission of court discharging judicial functions before the said subsequent pleading submitted by way of written submissions is permitted to be taken to be read as a part of defence either before the Ld. NCLT or NCLAT. In the instant Company Appeal the Ld. Counsel for the Appellant had attempted to read the written submissions, which he has preferred before the Ld. NCLT during the course of the pleading in support of his contention by making reference to various contentions, qua the implications pertaining to Section 96 of the I & B Code, 2016, and as to in what manner it has to be interpreted without the same being part of pleadings in the proceedings. 11. With all due reverence at our command, we are of the opinion that, admittedly, it is not the case of the Appellant that the written submissions submitted by him before the Ld. NCLT, would be satisfying the ingredients and the parameters contemplat....
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....es to substantiate the argument of the Ld. Counsel for the Appellant qua the 'mischief rule', as contemplated to be applied in the context of the implications flowing from Section 96 of the I & B Code, 2016. 13. There is another reason for not accepting the concept of 'mischief rule' in light of the executive directions issued by the Ministry of Corporate Affairs on 18.01.2023, because under the definition of 'law' as provided under Article 13 of the Constitution of India, it defines 'law'. The definition of law as extracted under the Constitution of India, will not include within its ambit any executive directions, particularly, when it was mandatorily required to be notified under Article 245 of the Constitution of India. To be treated to the law under Article 13(3)(a) is described hereunder. "13. Laws inconsistent with or in derogation of the fundamental rights.-(1) All laws in force in the territory of India immediately before the commencement of this Constitution, in so far as they are inconsistent with the provisions of this Part, shall, to the extent of such inconsistency, be void. (2) The State shall not make any law which takes away or abridges the rights conferred by....
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....rium under Section 96 of the I & B Code, 2016, cannot be permitted to draw any proceedings, which is barred by statute as contained under Section 96(1)(b) of the I & B Code, 2016, and particularly the statute which is of a special nature. 16. Thus the Ld. NCLT, while holding the proceedings to be barred by Section 96 of the I & B Code, 2016, by the impugned order didn't require to go into factual matrix, calling for an elaborate discussion. Rather to the contrary, on the simple reading of the order, it is apparently reflects that the Appellant was heard and the contentions which, were raised by the Appellant before the Ld. Tribunal were considered and ultimately, the analysis drawn by the Ld. Tribunal that, the legal actions already initiated in respect of a debt against a Corporate Debtor by virtue of the provisions contained under Section 96 of the I & B Code, 2016, the Financial Creditor would be restrained to initiate any further new legal proceedings or an action in respect of any debt against the Personal Guarantor for which the proceedings have already been undertaken or is being carried. 17. The Ld. Counsel for the Appellant has argued that, the time since being the e....