TaxTMI 
TaxTMI 
2026 (7) TMI 727
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....de of Civil Procedure, 1908 being GA COM 3 of 2024. 3. Learned Senior Advocate appearing for the appellant has contended that, appellant had applied under Order VII Rule 11 of the Code of Civil Procedure, 1908 for rejection of the plaint while the respondent had applied for judgment on admission under Order XII Rule 6. By the impugned judgment and decree, learned Single Judge has dismissed the application under Order VII Rule 11 of the appellant while allowing the application of respondent under Order XII Rule 6 of the Code of Civil Procedure, 1908. He has contended that, the appellant is aggrieved by the impugned judgment and decree to the extent that it proceeds to decree the suit in favour of the respondent under Order XII Rule 6 of the Code of Civil Procedure, 1908, in the present appeal. 4. Learned Senior Advocate appearing for the appellant has contended that, the subject matter of the suit does not involve a commercial dispute within the meaning of the Commercial Courts Act, 2015. He has referred to the plaint in this regard. He has contended that, the suit was for recovery of money lent and advanced. The plaintiff is not a banker nor carries on money lending business.....
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....e barred under Section 96 of the Insolvency and Bankruptcy Code, 2016. He has contended that, the moratorium prescribed under Section 96 of the Insolvency and Bankruptcy Code, 2016 did not extend to the principal borrower. He has contended that, Insolvency and Bankruptcy Code, 2016 is a complete Code in itself. He has pointed out that, Insolvency and Bankruptcy Code, 2016 was divided into separate parts governing different debtors. Part II of the Insolvency and Bankruptcy Code, 2016 has dealt with the insolvency resolution process of corporate debtors exclusively, while Section 94, 95 and 96 under Part III Insolvency and Bankruptcy Code, 2016 exclusively dealt with insolvency resolution and bankruptcy for individual and partnership firms. 10. Learned Senior Advocate appearing for the respondent has referred to Section 3 of the Insolvency and Bankruptcy Code, 2016 and contended that, the definitions therein are general. He has contended that the general definitions appearing therein are applicable to various provisions of the Insolvency and Bankruptcy Code, 2016 unless the context otherwise required. He has pointed out that Section 5 of the Insolvency and Bankruptcy Code, 2016 re....
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....l. With regard to the joint and severable liability in the plaint, learned Senior Advocate appearing for the respondent has contended that, the impugned judgment and decree has passed a decree jointly and severally against all the defendants. He has referred Black's Law Dictionary 6th edition for the definition of joint and several liability. He has referred to Section 43 of the Indian Contract Act, 1872 and submitted that, the same entitles the respondent to enforce the whole promise against any one or a number of joint promisors. He has contended that, the respondent is legally entitled to recover the decretal amount from the defendant No. 1 notwithstanding the temporary statutory protection available to the defendant Nos. 2 and 3. In support of such contention, he has relied upon AIR 1999 Cal 781 (Amrita Lal Ghose vs. Narain Chandra Chakrabarti and Others) and AIR 1964 Cal 196 (Union of India v. East Bengal River Steamer Service Ltd.). 15. Learned Senior Advocate appearing for the respondent has contended that, the Appeal Court has the power to modify the decree. He has contended that, on the date when the impugned judgment and decree was passed, there was no impediment of fi....
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....of dismissal. NCLAT by an order dated May 27, 2022 had allowed such appeal. 20. In view of the order dated May 27, 2022 passed by the NCLAT, setting aside the order dismissing the proceedings under Section 95 of the Insolvency and Bankruptcy Code, 2016, the same got revived. The respondent had filed the suit on December 12, 2022. NCLT had admitted the proceedings under Section 95 of the Insolvency and Bankruptcy Code, 2016 on June 5, 2024. Therefore, between the period May 27, 2022 which is the date of the order of the NCLAT and June 5, 2024 when NCLT admitted the petition under Section 95, there was a moratorium in operation under Section 96 of the Insolvency and Bankruptcy Code, 2016. 21. Section 96 of the Insolvency and Bankruptcy Code is as follows:- "96. Interim-moratorium.-(1) When an application is filed under Section 94 or Section 95- (a) an interim-moratorium shall commence on the date of the application in relation to all the debts and shall cease to have effect on the date of admission of such application; and (b) during the interim-moratorium period- (i) any legal action or proceeding pending in respect of any debt shall be deem....
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....te debtors as well as to proceedings for insolvency resolution and bankruptcy for individual and partnership firms. 25. V. Ramakrishnan and Another (supra) has considered the Insolvency and Bankruptcy Code, 2016 and particularly the moratorium under Section 14 thereof. At the time of such judgment, Part III of the Insolvency and Bankruptcy Code, 2016 did not come into operation. Nonetheless, it has compared Section 14 and Sections 96 and 101 for the interpretation of Section 14, even though Sections 96 and 101 had not been brought into force. It has held that, Sections 96 and 101 when contrasted with Section 14 would show, Section 14 cannot possibly apply to personal guarantor. It has noted that interim moratorium under Part III is a separate moratorium applicable separately in the case of personal guarantor against whom insolvency resolution processes may be initiated under Part III. Moreover, the protection of the moratorium under Section 96 and 101 are far greater than that of Section 14 in as much as, pending legal proceedings in respect of a debt and not the debtor are stayed. 26. Laxmi Pat Surana (supra) has considered the issue as to whether an action under Section 7 o....
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.... guarantors namely the corporate entity as it was under moratorium under Section 14 and the two natural persons as they enjoyed the benefits under Section 96 of the Insolvency and Bankruptcy Code, 2016. 30. In both Axis Trustee Services Ltd. (supra) and IL & FS Financial Services Limited (supra) the suits were pending before Court prior to the institution of proceedings under the Insolvency and Bankruptcy Code, 2016. In the facts and circumstances of the present case, the institution of the suit in which, the impugned judgment and decree was passed, was subsequent to atleast two of the appellants enjoying the moratorium under Section 96 of the Insolvency and Bankruptcy Code, 2016. Therefore, these two authorities do not answer the question as to whether or not, the suit in which the impugned judgment and decree was passed, was capable of being filed before the Court or received by the learned Court not. 31. Black's Law Dictionary Ninth Edition has dwelt on joint and several liabilities. It has observed that liability that may be apportioned either among two or more parties or to only one or a few select members of the group at the adversary's discretion can be called joint an....
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....of. 38. Venkatesh Vincom Private Limited (supra) has considered the issue of a commercial dispute. In the factual matrix obtaining in that case, it has held that, a suit for recovery of money lent and advanced by a non-banking financial company against the partnership firm, was maintainable as it involves a commercial dispute within the meaning of the Act of 2015. 39. Dilip B. Jiwrajka (supra) has considered the challenge to the constitutional validity of Section 95 to 100 of the Insolvency and Bankruptcy Code, 2016. It has upheld the constitutional validity of such provisions. 40. The subsequent amendments to Section 96 of the Insolvency and Bankruptcy Code, 2016, by the Insolvency and Bankruptcy (Amendment) Act, 2026 does not help the respondents herein. By the Amendment Act, 2026, Sub-Section (4) was introduced to Section 96. It has been introduced after a notice was taken of the mischief that, the natural person were indulging into by reason of the moratorium prescribed under Section 96 of the Insolvency and Bankruptcy Code, 2016. Section 96(4) of the Insolvency and Bankruptcy Code, 2016 came into effect on and from May 26, 2026. Since, such provisions have come into f....