TaxTMI 
TaxTMI 
2026 (1) TMI 432
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....I. SUBMISSIONS MADE ON BEHALF OF THE PLAINTIFF 11 IV. ANALYSIS 13 V. OBJECT AND PURPOSE OF THE IBC 14 VI. OUSTER PROVISIONS UNDER THE IBC 19 VII. SECTIONS 65, 75, 60(5)(C) OF THE IBC AND THE RELEVANT NCLT RULES, 2016 20 A. SCOPE OF SECTION 65 OF THE IBC 20 B. SCOPE OF SECTION 75 OF THE IBC 30 C. RESIDUARY POWERS OF THE NCLT UNDER SECTION 60(5)(C) OF THE IBC 31 D. NCLT RULES, 2016 38 VIII. ANALYSING THE PLAINTIFF'S SUBMISSIONS 43 A. RELIANCE ON THE LAW DECLARED UNDER THE SARFAESI ACT, 2002 AND THE SEBI ACT, 1996 43 B. SCOPE OF SECTION 7 AND ITS EFFECT ON THE OUSTER PROVISIONS 47 C. INAPPLICABILITY OF MSA GLOBAL 52 IX. ANALYSING THE PLAINT 54 X. ORDER 62 The plaintiff/corporate debtor has filed this suit being aggrieved by the act of defendant no. 1/financial creditor filing a petition against the plaintiff, under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter "IBC"/"Code"), before the National Company Law Tribunal, New Delhi ('NCLT') for the initiation of the corporate insolvency resolution process. The gravamen of dispute, essent....
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....ved in the instant lis and to answer questions involved in the present suit, the bar provided for under Section 63 and 231 of the IBC applies. The I.A. 22791/2025 filed by defendant no. 1 under Order VII Rule 11 of the CPC is, therefore, allowed. Resultantly, I.A. 19370/2025 filed by the plaintiff under Order XXXIX Rule 1 and 2 of the CPC becomes infructuous and is disposed of accordingly. Before detailing the reasoning, the necessary facts, as gleaned from the plaint, shall be considered. I. FACTUAL MATRIX 7. The plaintiff and defendant nos. 1-5 are companies engaged in real estate and other allied commercial activities. From the year 2006 until 2024, defendant no. 5 consistently held 50% of the equity shareholding in the plaintiff, while the remaining 50% shareholding was held by various entities. During the financial years 2021-22, defendant no. 2 held the remaining shareholding of the plaintiff, which was then transferred by defendant no. 2 in favour of defendant no. 4 in April, 2024. 8. The plaintiff claims that vide loan agreement dated 31.10.2006 it had availed a term loan facility of Rs. 80 Crores from defendant no. 2 (then Sonata Investments Ltd.) (hereinafter "sa....
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....veral payments to defendant no. 1 during the financial years 2023-24 and 2024-25, towards the complete discharge of the loan liability towards defendant no. 2, under the said Loan Agreement. The said payments were made with the understanding that the payments to defendant no. 1 would reduce the obligation of the plaintiff towards defendant no. 2 under the said Loan Agreement. 14. In April, 2024 while disregarding the purported understanding between the parties, defendant no. 2 transferred its shareholding in the petitioner, in favour of defendant no. 4. Thereafter, an agreement was arrived at, that the shareholding of the plaintiff, which stood with defendant no. 4, shall be sold to defendant no. 6 for a consideration of Rs. 88 Crores. In furtherance of the same, defendant no. 6 made payments to defendant no. 4; however, defendant no. 4 resiled from executing the share purchase agreement. 15. Thereafter, upon the purported discharge of all liabilities, including the repayment of the Rs. 80 Crore loan, defendant no. 1 instituted a petition under Section 7 of the IBC registered as C.P. (IB) No. 389 (PB)/2024 and titled 'Vihaan 43 Realty Pvt. Ltd. v. Roseland Buildtech Pvt. Ltd.....
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....ka & Ors. (2020) 13 SCC 308., Swiss Ribbons Pvt. Ltd. and Anr. v. Union of India (2019) 4 SCC 17. ("Swiss Ribbons"), Gujarat Urja Vikas Nigam Ltd. v. Amita Gupta (2021) 7 SCC 209. ("GUVNL"), Shree Ambica Rice Mill v. Kaneri Agro Industries Limited 2021 SCC OnLine NCLAT 599., Rishima SA Investments LLC v. Sarga Hotel Private Limited Company Appeal (AT) (Insolvency) No. 800 of 2020., Hytone Merchants v. Sabtadi Investments Consultants 2021 SCC OnLine NCLAT 598., Sanjay Pandurang Kalate v. Vistra ITCL (India) 2023 SCC OnLine NCLAT 1415., Beacon Trusteeship Ltd v. Earthcon Infracon Pvt. Ltd (2020) SCC OnLine SC 1233., Mohammed Enterprises v. Farooq Ali Khan (2025) 257 Comp Cas 344., Innoventive Industries Ltd. v. ICICI Bank(2018) 1 SCC 407., Thampanoor Ravi v. Charupara Ravi (1999) 8 SCC 74., CIT v. Venkateswara Hatcheries (P) Ltd. (1999) 3 SCC 632., Subramaniam Swamy v. Union of India (2016) 7 SCC 221., P. Jamnadas Kothari v. Vikram Jamnadas Kothari (2013) 177 Comp Cas 199., Mrs. Shailja Krishna v. Satori Global Limited (2025) 259 Comp Cas 1., Kunwer Sachdev v. IDBI Bank & Ors (2024) 5 HCC (Del) 170., Tejinder Pal Setia v. KONE Elevators India (P) Ltd (2024) 242 Comp Cas 700., Cotton ....
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....rayer is found to be worthy of trial, the plaint as a whole cannot be rejected. 25. Reliance was placed on the decisions in Sian Participation Corp v. Halimeda International Ltd. [2024] 3 WLR 937., Kirpa Ram v. Surendra Deo Gaur (2021) 13 SCC 57., Anita Kushwaha v. Pushap Sudan (2016) 8 SCC 509., Sri Boyenepally Srijayavardhan v. V. Nirupama Reddy & Ors 2024 SCC OnLine TS 3516., Ranjeet alias Bhaiyu Mohite v. Nandita Singh & Ors. 2021 SCC OnLine MP 3410., Liverpool London S.P. & I Assn Ltd v. M.V. Sea Succes I (2004) 9 SCC 512., Joginder Pal Singh v. State (Govt. of NCT of Delhi) 2025 SCC OnLine Del 5617., Central Bank of India v. Prabha Jain (2025) 4 SCC 38., Punjab & Sind Bank v. Frontline Corporation Ltd. (2023) 16 SCC 331., SEBI v. Rajkumar Nagpal (2023) 8 SCC 274., TATA Consultancy Services Ltd v. S.K. Wheels (P) Ltd. (2022) 2 SCC 583., Innoventive Industries Limited v. ICICI Bank and Another (2018) 1 SCC 407., Vijay Kumar Singhania v. Bank of Baroda & Anr. (2025) 256 Comp Cas 822., M. Suresh Kumar Reddy v. Canara Bank & Ors. (2023) 8 SCC 387. ("M. Suresh Kumar Reddy"), Radha Exports (India) Pvt. Ltd v. K.P. Jayaram & Anr. (2020) 10 SCC 538., Sandeep Behl v. Nirmal Trading ....
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.... laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the priority of payment of government dues and to establish an Insolvency and Bankruptcy Fund, and matters connected therewith or incidental thereto. An effective legal framework for timely resolution of insolvency and bankruptcy would support development of credit markets and encourage entrepreneurship. It would also improve Ease of Doing Business, and facilitate more investments leading to higher economic growth and development. 3. The Code seeks to provide for designating the NCLT and DRT as the Adjudicating Authorities for corporate persons and firms and individuals, respectively, for resolution of insolvency, liquidation and bankruptcy. The Code separates commercial aspects of insolvency and bankruptcy proceedings from judicial aspects. The Code also seeks to provide for establishment of the Insolvency and Bankruptcy Board of India (Board) for regulation of....
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....two ancillary laws and one special provision. ... 3.3.1 Difficulties of the present arrangement The current state of the bankruptcy process for firms is a highly fragmented framework. Powers of the creditor and the debtor under insolvency are provided for under different Acts. Given the conflicts between creditors and debtors in the resolution of insolvency as described in Section 3.2.2, the chances for consistency and efficiency in resolution are low when rights are separately defined. It is problematic that these different laws are implemented in different judicial fora. Cases that are decided at the tribunal/BIFR often come for review to the High Courts. This gives rise to two types of problems in implementation of the resolution framework. The first is the lack of clarity of jurisdiction. In a situation where one forum decides on matters relating to the rights of the creditor, while another decides on those relating to the rights of the debtor, the decisions are readily appealed against and either stayed or overturned in a higher court. Ideally, if economic value is indeed to be preserved, there must be a single forum that hears both sides of the case....
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.... the value of the corporate debtor. The Supreme Court in Swiss Ribbons at paras. 27-28 further detailed the features of the IBC in the following words: "27. As is discernible, the Preamble gives an insight into what is sought to be achieved by the Code. The Code is first and foremost, a Code for reorganisation and insolvency resolution of corporate debtors. Unless such reorganisation is effected in a time-bound manner, the value of the assets of such persons will deplete. Therefore, maximisation of value of the assets of such persons so that they are efficiently run as going concerns is another very important objective of the Code. This, in turn, will promote entrepreneurship as the persons in management of the corporate debtor are removed and replaced by entrepreneurs. When, therefore, a resolution plan takes off and the corporate debtor is brought back into the economic mainstream, it is able to repay its debts, which, in turn, enhances the viability of credit in the hands of banks and financial institutions. Above all, ultimately, the interests of all stakeholders are looked after as the corporate debtor itself becomes a beneficiary of the resolution scheme-workers are ....
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....The BLRC noted that speed is of the essence for the working of a bankruptcy code. From the point of the view of creditors, a good realisation can be obtained when a firm is sold as a going concern. The decisions of this Court in Madras Petrochem [Madras Petrochem Ltd. v. BIFR, (2016) 4 SCC 1 : (2016) 2 SCC (Civ) 478], Innoventive Industries [Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407 : (2018) 1 SCC (Civ) 356] and ArcelorMittal (India) (P) Ltd. [ArcelorMittal (India) (P) Ltd. v. Satish Kumar Gupta, (2019) 2 SCC 1] emphatically advert to the failure of the statutory resolution machinery in the regime prior to IBC. It was in this backdrop that IBC was enacted to provide for a timely resolution of CIRP. The primary focus of IBC is to ensure the revival and continuation of the corporate debtor. The interests of the corporate debtor have been bifurcated and separated from the interests of persons in management. The timelines which are prescribed in IBC are intended to ensure the resuscitation of the corporate debtor." 31. With the above context in mind, the provisions under the IBC, material to determine the bar on a civil court's jurisdiction, may now be considered. ....
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....the Adjudicating Authority may impose upon such person a penalty which shall not be less than one lakh rupees, but may extend to one crore rupees. (2) If, any person initiates voluntary liquidation proceedings with the intent to defraud any person, the Adjudicating Authority may impose upon such person a penalty which shall not be less than one lakh rupees but may extend to one crore rupees." (Emphasis Supplied) 36. To appreciate the breadth of these powers, the following judicial pronouncements of the NCLT and NCLAT may be considered, exclusively, for the purposes of appreciating the practice of the tribunal under the said provision. 37. In Punjab National Bank v. James Hotels Ltd. CP (IB) No. 14/CHD/2017, Order dt. 23.08.2017 (NCLT, Chandigarh). upon the corporate debtor claiming that the financial creditor had committed fraud, the NCLT directed the Registrar of Companies, Punjab and Chandigarh ('ROC') to preserve C.C.T.V. footages related to the visitors entering the premises of the ROC. This order of the NCLT was assailed before the Appellate Tribunal in James Hotels Ltd. v. Punjab National Bank Company Appeal (AT) (Insol.) No. 165 of 2017 (Principal Ben....
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.... that what was agreed, viz. 1% to 2%. 2.10 It is further averred that the respondent/operational creditor had allegedly used the seal of the applicant/corporate debtor to pass off the fabricated invoices as genuine ones. It is averred that such acts of the respondent/operational creditor amount to forgery, criminal intimidation and extortion against the applicant/corporate debtor intended to tarnish the image and reputation of the applicant/corporate debtor. It is further averred that the respondent/operational creditor owed amounts to the tune of INR 25 crores to the applicant/corporate debtor as on date. ... 9. When a serious ground is raised by the applicant/corporate debtor about the veracity of the invoices and pointed out the undisputed fact that a criminal case was filed against the respondent/operational creditor, it has become necessary to direct the respondent/operational creditor to produce the original invoices for which claim is raised to enable the adjudicating authority to decide the dispute. The original invoices are in the custody of the respondent/operational creditor. There will not be difficulty for the operational creditor to produce ....
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....tions 65 and 75 of the Code. Before admitting the Application, every precaution is necessary to be exercised so that the insolvency process is not misused for any other purposes other than the resolution of Insolvency. ... 44. ...Section 65 of the Insolvency and Bankruptcy Code, 2016 provides for punishment or fraudulent or malicious initiation of proceedings. It does not mean that Section 65 will not be applicable to prevent such fraudulent or malicious initiation of proceedings. When a statute makes a provision for punishment for any wrong, it also contains deemed power to prevent it. Therefore it cannot be said that section 65 will be applicable only after initiation of the Corporate Insolvency Resolution Process fraudulently or with malicious intent." 41. Further, in Wadhwa Law Chamber's Guide to the Insolvency and Bankruptcy Code, 3rd Edition, Volume 2, at Page 2502, the learned authors have discussed the following caselaw under heading 'Collusion between Corporate Debtor and Financial Creditor': "Collusion between corporate debtor and financial creditor In Electroparks (India) Private Limited v. Videocon Infinity Infrastructure Private L....
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....t the NCLT does indeed have powers to inquire into allegations of fraud, if the underlying purpose for kickstarting the insolvency process is not the resolution of insolvency or liquidation as the case may be. The material paras. read as under: "51. Even fraudulent tradings carried on by the corporate debtor during the insolvency resolution, can be inquired into by the adjudicating authority under Section 66. Section 69 makes an officer of the corporate debtor and the corporate debtor liable for punishment, for carrying on transactions with a view to defraud creditors. Therefore, NCLT is vested with the power to inquire into (i) fraudulent initiation of proceedings as well as (ii) fraudulent transactions. It is significant to note that Section 65(1) deals with a situation where CIRP is initiated fraudulently "for any purpose other than for the resolution of insolvency or liquidation". 52. Therefore, if, as contended by the Government of Karnataka, the CIRP had been initiated by one and the same person taking different avatars, not for the genuine purpose of resolution of insolvency or liquidation, but for the collateral purpose of cornering the mine and the mining....
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....into on 16-4-2016 between the corporate debtor and M/s Udhyaman Investments Pvt. Ltd., represented by the said Mr Poobalan, whereby the corporate debtor agreed to pay Rs 11.5 crores; (viii) that the said agreement was purportedly executed at Florida, but witnessed at Chennai; (ix) that Mr Poobalan even communicated to the Director, Department of Mines & Geology as well as the Monitoring Committee, taking up the cause of the corporate debtor as its authorised signatory; (x) that the CIRP was initiated by M/s Udhyaman Investments Pvt. Ltd. represented by its authorised signatory, Mr Poobalan; (xi) that the resolution applicant, namely, M/s Embassy Property Development Pvt. Ltd. as well as the Financial Creditor who initiated CIRP, namely, M/s Udhyaman Investments Pvt. Ltd. are all related parties, and (xii) that Mr Poobalan had not only acted on behalf of the corporate debtor before the statutory authorities, but also happened to be the authorised signatory of the Financial Creditor who initiated the CIRP, eventually for the benefit of the resolution applicant which is a related party of the Financial Creditor." (Emphasis Supplied....
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....i.e., ledger statement dated 14.04.2017... ... 30. Thus, considering the principle laid down in the above said decisions, this Court is of the opinion that the Adjudicating Authority/learned Tribunal can enquire into the issue of fraud only under Section 65 of Insolvency and Bankruptcy Code, 2016 and the consequence of initiating a CIRP fraudulently will be limited to the monetary penalty provided for in Section 65 of Insolvency and Bankruptcy Code, 2016." 48. The language of Section 65(1) of the IBC explicitly empowers the NCLT to adjudicate on fraud; however, the power to inquire into collusion between the parties seems to originate from the following expression under the said provision: "or with malicious intent for any other purpose other than for the resolution of insolvency, or liquidation, as the case may be" Importantly, apart from collusion, there may possibly be other situations covered by the said expression, the Court is, however, in the instant case not concerned with them. 49. The adjudication of fraud, or malicious intent, naturally requires evidence to be led and, in some cases, parties to be cross-examined. It cannot be the case ....
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....deterrent, in relation to a financial creditor's application under Section 7, particularly because of the limited scope of scrutiny the NCLT can undertake under Section 7 of the Code. 55. From a combined reading of the discussion pertaining to Sections 65 and 75, it can safely be concluded that - first, the NCLT has powers to delve into allegations of fraud and malicious initiation of CIRP under Section 65 of the Code; second, the NCLT and NCLAT have, actively, been utilising these powers to adjudicate upon issues concerning forgery, fraud, and collusion; and third, in furtherance of the powers to adjudicate upon fraud and malicious intent, the NCLT can delve into questions concerning the veracity/truthfulness of statements, information and documents. C. RESIDUARY POWERS OF THE NCLT UNDER SECTION 60(5)(c) OF THE IBC 56. Before analysing the NCLT Rules, 2016 which provides the tribunal with the requisite tools to embark upon the aforesaid exercise, Section 60 of the IBC which contains the residuary powers of the tribunal may also be considered, the same reads as under: "60. Adjudicating authority for corporate persons. ... (5) Notwithstanding anyt....
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.... or in relation to insolvency resolution or liquidation under the Code." 59. The rational for the breadth of Section 60(5)(c) of the IBC was discussed by the Supreme Court in GUVNL, wherein the Court stressed upon the objective of the IBC, namely to create a unified code and fora for the insolvency resolution process, and held that disputes bearing a nexus with the insolvency of the corporate debtor are covered by Section 60(5)(c). The material portion of the judgement reads as under: "69. The institutional framework under IBC contemplated the establishment of a single forum to deal with matters of insolvency, which were distributed earlier across multiple fora. In the absence of a court exercising exclusive jurisdiction over matters relating to insolvency, the corporate debtor would have to file and/or defend multiple proceedings in different fora. These proceedings may cause undue delay in the insolvency resolution process due to multiple proceedings in trial courts and courts of appeal. A delay in completion of the insolvency proceedings would diminish the value of the debtor's assets and hamper the prospects of a successful reorganisation or liquidation. For the....
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....BC. However, since the dispute in the present case has arisen solely on the ground of the insolvency of the corporate debtor, NCLT is empowered to adjudicate this dispute under Section 60(5)(c) of IBC." (Emphasis Supplied) 61. The BLRC Report also notes the importance of providing sufficient powers to the adjudicating authority/tribunal to deal with all questions arising out of the insolvency or liquidation of a firm: "4.2.2. Territorial jurisdiction *** Further, following from current law, once a liquidation or bankruptcy order has been made, leave of NCLT or DRT would be necessary to proceed with any pending suit or proceeding or to file any fresh suit or proceeding by or against the debtor firm or individual. This will ensure the sanctity of the liquidation or bankruptcy process. NCLT or DRT should also have jurisdiction to entertain and dispose of any pending or freshsuit or legal proceeding by or against the debtor company or individual; question of priorities or any other question, whether of law or facts, in relation to the liquidation or bankruptcy. By bringing all litigations that may have a monetary impact on the economic value of de....
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.... in relation to the insolvency resolution process. We hasten to add, however, that NCLT's residuary jurisdiction, though wide, is nonetheless defined by the text of IBC. Specifically, NCLT cannot do what IBC consciously did not provide it the power to do." (Emphasis Supplied) 64. There are two approaches which may then be taken to sections conferring residuary jurisdictions - first, it can recognise powers that are independent from those provided for under a substantive section, but which have a meaningful and substantial connection with the text of a given provision; or second, it can recognise powers which are incidental and ancillary to a given provision i.e., a power which is to be read in, in order to meaningfully exercise a broader power explicitly provided for under a given section of a statute. 65. Para. 173 of GUVNL, as reproduced above, identifies two important facets of a power which may be recognised under Section 60(5)(c) them being-the power must have a textual hook, in other words the power is defined by the text of the IBC; and that the NCLT cannot do what the IBC did not consciously provide it the powers to do. Cumulatively, both these aspects po....
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....y, to be appointed by it by notification, to exercise and discharge such powers and functions as are, or may be, conferred on it by or under this Act or any other law for the time being in force." (Emphasis supplied) 71. A bare perusal of the afore-noted provision would reveal that the NCLT is empowered to exercise and discharge such powers which are conferred not merely by the Companies Act, 2013 but also any other law, including the IBC. The Supreme Court further noted the same in GUVNL, the material portion of which reads as under: "45. Sub-section (1) of Section 60 provides NCLT with territorial jurisdiction over the place where the registered office of the corporate person is located. NCLT shall be the adjudicating authority "in relation to insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors". NCLT has been constituted under Section 408 of the Companies Act, 2013 "to exercise and discharge such powers and functions as are, or may be, conferred on it by or under this Act or any other law for the time being in force" ["408. Constitution of National Company Law Tribunal.-The Central Governme....
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....elevant laws. 47. Oath to the witness. The Bench Officer or the Court Officer, as the case may be, shall administer the following oath to a witness: "I do swear in the name of God / solemnly affirm that what I shall state shall be the truth and nothing but the truth." 51. Power to regulate the procedure. The Tribunal may regulate its own procedure in accordance with the rules of natural justice and equity, for the purpose of discharging its functions under the Act. 52. Summoning of witnesses and recording Evidence. (1) If a petition or an application is presented by any party to the proceedings for summoning of witnesses, the Tribunal shall issue summons for the appearance of such witnesses unless it considers that their appearance is not necessary for the just decision of the case. (2) Where summons are issued by the Tribunal under sub-rule (1) to any witness to give evidence or to produce any document, the person so summoned shall be entitled to such travelling and daily allowance sufficient to defray the travelling and other expenses as may be determined by the Registrar which shall be deposited by the party....
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....urately all documents given to me for translation." 139. Officer to administer oath. The oath or affirmation shall be administered by the Court Master. 140. Form recording of deposition. (1) The Deposition of a witness shall be recorded in Form NCLT-16. (2) Each page of the deposition shall be initiated by the Members constituting the Bench. (3) Corrections, if any, pointed out by the witness may, if the Bench is satisfied, be carried out and duly initialled. If not satisfied, a note to the effect be appended at the bottom of the deposition. 141. Numbering of witnesses. The witnesses called by the applicant or petitioner shall be numbered consecutively as PWs and those by the respondents as RWs. 142. Grant of discharge certificate. Witness discharged by the Tribunal may be granted a certificate in Form NCLT-17 by the Registrar. 143. Witness allowance payable. (1) Where the Tribunal issues summons to a Government servant to give evidence or to produce documents, the person so summoned may draw from the Government travelling and daily allowances admissible to him as per rules. ....
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....e invoked in order to delve into disputed questions of facts, which warrant a thorough examination of evidence. The provisions under the IBC and the NCLT Rules, 2016 cumulatively, leave no manner of doubt that the NCLT is institutionally equipped, both in terms of jurisdiction and procedure, to adjudicate complex disputes involving allegations of fraud, forgery, fabrication of documents, collusion and other serious factual controversies that may arise in connection with the initiation of CIRP. VIII. ANALYSING THE PLAINTIFF'S SUBMISSIONS A. RELIANCE ON THE LAW DECLARED UNDER THE SARFAESI ACT, 2002 AND THE SEBI ACT, 1996 76. The judgements relied upon by the plaintiff may now be considered in a bit more detail. To argue that the jurisdiction of a civil court is not barred, reliance was placed on Central Bank of India v. Prabha Jain (supra), Punjab & Sind Bank v. Frontline Corpn. Ltd. (supra), SEBI v. Rajkumar Nagpal and Tata Consultancy Services Ltd. v. S.K. Wheels (supra). 77. In Central Bank of India v. Prabha Jain (supra) the Supreme Court declared that the issues raised in the plaint therein were not barred by Section 34 of the Securitisation and Reconstruction of Fin....
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....application ... to the Debts Recovery Tribunal...." (emphasis supplied) 13.2. From Sections 17(2), (3) and (4) of the SARFAESI Act, it is clear that the Tribunal has the power to examine whether "17. (2) ... any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor ... are in accordance with the provisions of this Act and the rules made thereunder." (emphasis supplied) 13.3. The Tribunal has the power to pass consequential orders as provided in Section 17(3). 14. From Section 17, it is clear that it is only the Tribunal that has the jurisdiction to determine whether "any of the measures referred to in sub-section (4) of Section 13 taken by the secured creditor" are in accordance with the Act or Rules thereunder. 15. The plaintiff in her suit has prayed for 3 reliefs: (a) The first relief is in relation to a sale deed executed by Sumer Chand Jain in favour of Parmeshwar Das Prajapati. (b) The second relief is in relation to a mortgage deed executed by Pramod Jain in favour of the Bank. (c) The third relief is for being handed over the possession of the suit ....
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....appointed under the SEBI Act is empowered to determine. Section 15-I of the SEBI Act provides that an adjudicating officer may be appointed to adjudge cases under Sections 15-A, 15-B, 15-C, 15-D, 15-E, 15-EA, 15-EB, 15-F, 15-G, 15-H, 15-HA, 15-HB. None of the sections mentioned in Section 15-I of the SEBI Act would confer jurisdiction on the adjudicating officer to grant the relief sought by the plaintiffs in the first instance. Hence, the bar in Section 15-Y would not operate as against the suit in the present case. 81. Similarly, Section 430 of the Companies Act provides that no civil court shall have the jurisdiction to entertain any suit in respect of any matter which the National Company Law Tribunal or the National Company Law Appellate Tribunal is empowered to determine. Nothing in the Companies Act, 2013 or any other law for the time being in force vests either the National Company Law Tribunal or the National Company Law Appellate Tribunal with the jurisdiction to adjudicate upon a challenge to the RBI Circular. Hence, the bar in Section 430 is not attracted. (Emphasis Supplied) 82. The reliance placed by the plaintiff on paras. 28 and 29 of Tata Consu....
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....ourt in Civil Appeal No. 9299 of 2024. Thereafter, in M. Suresh Kumar Reddy the Supreme Court re-iterated Innoventive Industries as being good law, and held that the only ground for rejection of a Section 7 application is that the debt has not become due and payable. The material parts of M. Suresh Kumar Reddy read as under: "11. Thus, once NCLT is satisfied that the default has occurred, there is hardly a discretion left with NCLT to refuse admission of the application under Section 7. "Default" is defined under sub-section (12) of Section 3 IBC which reads thus: "3. Definitions. -In this Code, unless the context otherwise requires- *** (12) "default" means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not [paid] by the debtor or the corporate debtor, as the case may be;" Thus, even the non-payment of a part of debt when it becomes due and payable will amount to default on the part of a corporate debtor. In such a case, an order of admission under Section 7 IBC must follow. If NCLT finds that there is a debt, but it has not become due and payable, the application under S....
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.... the plaintiff could have raised to challenge the vires of the legislation. This purported unfairness could not vest jurisdiction in a civil court when the same is barred under Sections 63 and 231 of the Code. The observations of the Supreme Court in Radha Exports (India) Pvt. Ltd v. K.P. Jayaram & Anr., relied upon by the plaintiff, were again made in the context of a Section 7 application. 88. It is, however, important to clarify that the Court is not making any judicial comment pertaining to the modified scope of scrutiny, if any, which the NCLT may have to undertake if applications under Section 7 and Section 65 of the IBC are found to be simultaneously pending before it. The said question is left open for a future Court to determine. This Court also at this stage refrains from rendering any guidance as to how pending applications under Sections 7 and 65 of the IBC are to be dealt with. The same is completely within the domain of the NCLT, who shall deal with the same in accordance with the applicable law. 89. A connected argument of the learned counsel for the plaintiff is that the right asserted by the plaintiff in the instant case is neither created by the IBC nor is c....
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....es "the appeal [involve] directly or indirectly a claim to or question respecting property or a right of the value of GBP300 sterling or upwards"?" 92. Is there, under the IBC, any discretion to make an order for the admission of CIRP where the debt on which the application is based is said to be disputed? The answer, as per the judgements in Innoventive Industries and M. Suresh Kumar Reddy, both of which have been cited in the compilation of judgements provided by the plaintiff, is in the negative. Resultantly, the said decision of the Privy Council is not material to the present discussion. C. INAPPLICABILITY OF MSA GLOBAL 93. Lastly, much reliance has also been placed by the plaintiff on the decision of this Court in Engineering Projects (India) Limited v. MSA Global LLC, subsequently affirmed by the Division Bench of this Court in MSA Global LLC Oman v. Engineering Projects India Ltd. 2025:DHC:11232-DB by the plaintiff, to argue that the civil courts are not powerless when vexatious, oppressive, and mala fide proceedings are in operation. The Court has carefully considered the said decision and finds that there is fundamental distinction between the present case and th....
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.... 98. To appreciate the suit of the plaintiff, the prayer clause in the plaint may be examined. The same is reproduced as under: "In view of the facts and circumstances set out hereinabove, it is most respectfully prayed that this Hon'ble Court may be pleased to: a. Pass a decree of declaration that the loan advanced to the Plaintiff under a Loan Agreement dated 31.10.2006, is fully discharged, and that no amounts are due and payable under the said Agreement and or any other documents by the Plaintiff to any of the Defendant Nos. 1 and 2; and b. Pass a decree of declaration that the Business Transfer Agreement dated 06.03.2020 (Doc-15), stated to be entered into between Kunjbihari Developers Private Limited (now known as Vihaan 43 Realty Private Limited) (D-1), CLE Private Limited (D-2) and Summit Ceminfra Private Limited (D-3), is null and void-ab-initio and not enforceable and not binding upon the Plaintiff; and c. Pass a decree of declaration that the Letter dated 20.03.2020 (Doc. 16) and letters dated 05.10.2023 (Doc. 17), were never issued by Defendant No. 2 (CLE), Defendant No. 1 (Vihaan) to the Plaintiff and were never received by the Plai....
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....troversy revolves around a loan facility of Rs. 80 Crores and a purported assignment agreement termed as "Business Transfer Agreement" dated 06.03.2020, by virtue of which the Vihaan (D-1) has created an event of default against the Plaintiff in respect of the loan of Rs. 80 Crores. While it is the specific stand of the Plaintiff that no amount, as alleged under the purported "BTA" is due or payable by the Plaintiff to either Defendant No. 1 or 2, since the entire debt stand extinguished and discharged, in pursuance of various payments being made to the Vihaan (D-1) and upon execution of SPA dated 26.02.2024 between Anant Raj and Hallow, wherein CLE (D-2) was a Confirming Party." 101. In furtherance of the plaintiff's claim pertaining to the non-existence of debt as against defendant no. 1, the plaintiff has also claimed that the BTA is forged, fraudulent and non-est in law; and further that the CIRP under the IBC has been initiated fraudulently. 102. Moreover, consistent with and flowing from its stands, the plaintiff has also contended that the letter dated 20.03.2020, issued by defendant no. 2 to the plaintiff, informing the latter that the loan under the said Loa....
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.... 107. It is also important to further stress upon the true nature of the instant suit. As the plaint itself narrates, the trigger for the present action has been the initiation of proceedings under the specialised statute, namely, the IBC. The plaint, thus, while couching itself in declaratory overtones, in essence, is aimed at getting an anti-tribunal injunction. Reliance may also be placed on para. 50 of Frost International Limited v. Milan Developers and Builders Private Limited and Anr. (supra), which reads as under: "50. On a holistic reading of the plaint and on consideration of the reliefs sought by the plaintiff, we find that the said reliefs are barred by law inasmuch as no, the plaintiff can (sic cannot) be permitted to seek relief in a suit which would frustrate the defendants from initiating a prosecution against the plaintiff or seeking any other remedy available in law. In fact, the attempt made by the plaintiff to seek such a declaratory relief is, in substance, to seek a relief of injunction against the defendants, particularly Defendant 1, but framed it in the nature of a declaratory relief. In other words, the plaintiff has sought an injunction against D....
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....h clothed as a civil declaratory action, is in reality an impermissible collateral attack on the jurisdiction and functioning of the NCLT under the IBC. Entertaining such a suit would amount to judicially endorsing forum shopping and procedural circumvention. 112. To emphasise upon the nature of the instant case, a few dates and events may again be looked into: 112.1. The Section 7 Petition for initiating CIRP was filed by the defendant no. 1 before the NCLT on 02.07.2024; 112.2. The plaintiff/corporate debtor, thereafter, filed I.A. No. 1012/2025 before the NCLT under Section 60(5) read with Section 65 of the IBC on 21.02.2025, to which a reply was filed by the defendant no. 1 on 04.06.2025; 112.3. While the Section 7 Petition and the plaintiff's I.A. No. 1012/2025 was pending, on 07.08.2025 the present suit came to be filed and a plea of urgency was raised, warranting this Court to allow the plaintiff's I.A. 19371/2025 seeking exemption from mandatory pre-institution mediation under Section 12A of the Commercial Courts Act, 2015; 112.4. Upon pleadings being completed, the parties were heard at length on 09.10.2025, 06.11.2025 and 20.11.2025. 113. A judgement com....