A suit filed against a corporate debtor during the moratorium period under Section 14 of the IBC is invalid.

JUDGMENT :

M.S. JAWALKAR, J.

1. Heard learned Counsel for both the parties.

2. Present Revision is filed being aggrieved by the order dated 23.11.2023, passed by learned Joint Civil Judge Junior Division, Hinganghat on Exh. 24 and thereby rejected the application for rejection of plaint under Order 7 Rule 11 of Code of Civil Procedure.

3. The Brief of the case is as under:

Respondent had leased property situated at all that is piece and parcel of land admeasuring 42000 Sq. Mtrs. bearing Survey No.14/2 (kh) at Mouza Burkoni, Mouza No.119, Patwari Halka No.31, situated at Burkoni, Tehsil Higanghat, District Wardha, Maharashtra to the applicant Company by entering into a lease deed. Respondent allegedly issued a notice dated 01.06.2021 terminating the lease deed dated 28.03.2007 and asked the applicant to vacate the suit property. The respondent (Original Plaintiff) has instituted a suit against the applicant through Regular Civil Suit No.23 of 2022 ("the Suit") before the learned Civil Judge Junior Division Higanghat, Dist. Wardha, seeking declaration, recovery of possession, eviction, and injunction along with arrears of rent with regards to the property.

4. The respondent filed an application seeking rejection of plain under Order VII Rule 11 read with Section 151 of the Code of the Civil Procedures, 1908. Through this application, the Civil Judge was informed that, the National Company Law Tribunal, through its order dated 30.08.2021, had initiated Corporate Insolvency Resolution Process (“CIRP") under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“the Code") against the applicant Company and had placed the Company under a moratorium under Section 14 of the Code, prohibiting initiation of any sort of proceedings against the Company or recovery of any property that is in possession of the Company during the subsistence of the CIRP. During this period, the CIRP of the applicant Company was resolved and the National Company Law Tribunal gave its approval to a resolution plan submits for revival of the Company and the moratorium came to be lifted. The Civil Judge erroneously rejected the application dated 20.09.2022, on the ground that the period of 180 days of CIRP under Section 12 of the Code had come to an end before filing of the suit by the respondent making the suit and it is further concluded that now that the moratorium is lifted, the suit is no more barred by law and can be continued to be adjudicated, however, the very institution of the suit during subsistence of moratorium period renders is non est as per Section 14 (1) (a) of the Code. The aforesaid order is the subject matter of challenge in the present Civil Revision Application.

5. The learned Counsel for applicant contended that through the application under Order VII Rule 11, the applicant had raised the issue that suit filed by the defendant is not maintainable and is barred under Section 14 (1) (a) of the Insolvency and Bankruptcy Code, 2016, which provides for a blanket moratorium on inter alia institution of any proceeding against a corporate debtor. It was contented that, the National Company Law Tribunal had initiated Corporate Insolvency Resolution Process under Section 9 of the Code against the applicant Company through its order 30.08.2021, by which the applicant Company came under CIRP and, therefore, had a protection of the moratorium envisaged under Section 14 of the Code. That, through the said order, the learned Tribunal had also directed that a moratorium under Section 14 of the Code would be placed upon the applicant Company, barring initiation of any proceedings against the applicant Company.

6. It is further contended that the Civil Judge in paragraph 20 of the order dated 23.11.2023 erred in holding that, as the CIRP period as contemplated under 12 of the Code is only 270 days, the CIRP period had already lapsed before filing of the suit i.e., on 21.01.2022. It is specifically contended that as the CIRP against the applicant Company was initi