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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
GAURI GODSE
IL & FS Financial Services Limited – Appellant
Versus
Serveall Constructions Private Limited – Respondent
| Table of Content |
|---|
| 1. suit facts: loan to corporate borrower, guarantors under moratoriums (Para 1 , 4 , 5 , 14 , 15) |
| 2. moratoriums do not bar proceedings against principal borrower (Para 2 , 6 , 7 , 8 , 9 , 10 , 11 , 12) |
| 3. issue: moratoriums against guarantors bar principal borrower suit? (Para 13) |
| 4. section 14 moratorium limited to corporate debtor only (Para 16 , 17) |
| 5. section 96 moratorium applies to debtor's debts exclusively (Para 18 , 19 , 20 , 21 , 22) |
| 6. precedents: moratorium protects debtor, not guarantors or principal (Para 23 , 24 , 25 , 26 , 27 , 28 , 29) |
| 7. tata capital distinguished: principal debtor moratorium affects entire debt (Para 30 , 31 , 32 , 33) |
| 8. co-extensive liability allows independent proceedings against borrower (Para 34 , 35 , 36 , 37 , 38) |
| 9. guarantors' moratorium does not protect principal borrower (Para 39 , 40 , 41 , 42 , 43 , 44 , 45) |
| 10. suit proceeds solely against principal borrower (Para 46 , 47 , 48) |
JUDGMENT :
GAURI GODSE, J.
1. This summary suit is filed to recover a sum of Rs. 203,66,31,506/- arising out of and in respect of the term loan facilities, availed by defendant no.1 and guaranteed by defendant nos. 2 to 4. Pursuant to a query made by th
Moratoriums under Sections 14 and 96 of IBC against corporate and personal guarantors do not bar recovery proceedings against principal borrower with no insolvency proceedings initiated against it, d....
The moratorium under Section 96 of the IB Code applies to all debts, including those of personal guarantors, and prohibits any legal action against them during its operation.
Section 95 applications filed during interim moratorium under Section 96 are non est ab initio; subsequent withdrawal of triggering applications does not validate them.
The interim moratorium under the Insolvency and Bankruptcy Code does not protect individuals from criminal liability for dishonouring cheques under the Negotiable Instruments Act.
Interim moratorium under IBC Section 96 does not bar SARFAESI sale certificate or possession if auction notice published, auction held, and sale confirmed before Section 94 filing, as guarantor's rig....
The court ruled that the moratorium under Section 33(5) of the IBC does not apply to pending suits, thereby allowing them to proceed despite liquidation proceedings.
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