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2024 Supreme(AP) 1495

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
Ms. B.S. Bhanumathi, J.
Kennigton Industries Pvt. Ltd. and others – Appellant
Versus
Spads Textiles Ltd. – Respondent
CRP No.872 of 2024
Decided on : 10-12-2024

Advocates:
Advocate Appeared:
For the Appellant : Akhil Krishnan
For the Respondent: Jada Sravan Kumar

A dissolved entity cannot maintain a suit as per the Insolvency and Bankruptcy Code, rendering any orders passed by a court lacking jurisdiction illegal.

Headnote:(A) Constitution of India - Article 227 - Insolvency and Bankruptcy Code, 2016 - Sections 33 (5) and 63 - Challenge to interim injunction order - Plaintiff's suit not maintainable post-dissolution by NCLT, invoking jurisdictional bars under the IBC - Revision allowed as Trial Court acted without jurisdiction. (Paras 2, 16)

(B) Civil Procedure Code, 1908 - Order XXXIX, Rules 1 and 2 and Order VII Rule 11 - Jurisdictional limitations and alternative remedies - High Court's supervisory jurisdiction can be exercised only when Trial Court lacks jurisdiction; presence of an alternative remedy under CPC bars High Court's intervention. (Paras 11, 12)

Facts of the case:
Revision filed against the grant of interim injunction to restrain defendants from interfering with the plaintiff’s possession of property, claiming dissolution by NCLT as a ground for suit non-maintenance.

Findings of Court:
Trial Court's order set aside due to lack of jurisdiction, as the plaintiff was no longer a legal entity post-NCLT dissolution.

Issues: Whether the plaintiff company could maintain the suit following its dissolution; the jurisdictional bar under the IBC.

Ratio Decidendi: The High Court affirmed that the jurisdiction of Civil Courts is limited under IBC provisions, and any order by a court lacking jurisdiction is inherently illegal.

Result: Revision petition allowed; order of the Trial Court set aside.

Table of Content
1. challenge to maintainability based on the plaintiff's dissolution. (Para 1 , 2)
2. arguments surrounding jurisdiction and the alternative remedies available. (Para 3 , 6 , 7 , 8)
3. court observations on jurisdictional validity under ibc provisions. (Para 4 , 5 , 10 , 11)
4. clarification on jurisdictional bars under specific provisions of the ibc. (Para 12 , 13)
5. final determination on lack of jurisdiction nullifying the order. (Para 14 , 15 , 16)
6. final ruling on the revision petition and costs. (Para 17 , 18 , 19)

JUDGMENT :

1. This revision petition is filed under Article 227 of the Constitution of India against the ad interim ex parte order, dated 21.04.2023, in IA No.40 of 2023 in OS No.54 of 2023 on the file of the Court of the Additional Junior Civil Judge, Jaggaiahpet, filed by the respondent herein/plaintiff under Order XXXIX, Rules 1 and 2 CPC, Sections 75, 94 and 151 CPC to grant interim injunction restraining the respondents/defendants/revision petitioners herein, their men etc., from interfering with the plaintiff's peaceful possession and enjoyment of the plaint schedule property to an extent of Acs.3.82 cents in RS No.87 with 25 staff quarters therein or by alienating the Western side factory lying in an extent of Acs.13.29 cents in RS No.86 situated at Ravikampadu Village, Jaggaiahpet Mandal, by lifting the machinery, stock-in-trade etc., therefrom until the division of entire property of Acs.17.11 cents is affected by metes and bounds and in any manner whatsoever.

2. This revision petition was filed mainly contending that the plaintiff is no longer a legal entity as it stood dissolved by the National Company Law Tribunal, Hyderabad Bench, Hyderabad ('NCLT') vide its order, dated 31.03.2023, with immediate effect and as such, the suit which was filed on 20.04.2023, is not maintainable in view of the prohibition under Sections 33 (5) and 63 of the Insolvency and Bankruptcy Code, 2016 ('IBC').

3. When the office of the Registry raised an objection about the maintainability of the revision petition, the revision petitioners placed reliance on the decisions in Radhe Shyam and others v. Chhabi Nath and others , MANU/SC/0200/2015; Todendula Venkata Krishnaiah v. Uppu Gangaiah , MANU/AP/0401/2003 ; Raj Shri Agarwal @ Ram Shri Agarwal and another v. Sudheer Mohan and others , 2022 Live Law (SC) 864; Timothy Ravinder Dev Pradeep v. Charles Samraj N. and others and the CSI Coimbatore Diocese v. Charles Samraj N. and others , MANU/TN/9795/2021 and Election Engineering Company Limited v. Energo Engineering Projects Limited and others , MANU/DE/3432/2022, in support of the contention that though an alternative remedy is available under law/CPC, the revision is not barred as the jurisdiction of the Trial Court is challenged on legal aspects and the impugned order was passed without having jurisdiction to entertain the suit.

4. On 19.04.2024, the registry was directed by this Court to number the case subject to maintainability. Accordingly, the revision petition was registered. The respondent made appearance before this Court through an Advocate.

5. Heard Sri N. Subba Rao, the learned Senior Counsel for the revision petitioners assisted by Sri N. Jeevan Kumar and Sri Karthik Shah, learned Counsel representing Sri Jada Sravan Kumar, the learned Counsel for the respondent.

6. The learned Senior Counsel for the revision petitioners contended that the plaintiff company was dissolved by the NCLT on 31.03.2023 and though the plaintiff had knowledge of the same, had filed the suit on 20.04.2023 inspite of a bar to file suit under Sections 33 (5) and 63 of the IBC. The learned Senior Counsel reiterated the answer given to the office objection at the time of registering the revision petition.

7. The learned Counsel for the respondent submitted that the property covered by the suit schedule property is not part of the property sold by the Official Liquidator, and therefore, the contention of the revision petitioners c

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