ORDER :

(Order of the Court was made by The Hon'ble Chief Justice)

1. At the highest, if the writ petition succeeds it may only be a pyrrhic victory and there may not be much cheer for the writ petitioner at the end of the day.

2. The essential facts are undisputed. The petitioner was a shareholder and director in a company. The respondent bank accorded credit facilities to such company which were secured, inter alia, by a mortgage or the like of an immovable property against which the bank proceeded under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002. Upon the bank seeking to auction the property in favour of the respondent auction purchaser, the debtor company challenged the transaction by way of proceedings under Section 17 of the Act of 2002. On grounds that are not relevant for the present context, the relevant Debts Recovery Tribunal annulled the transaction. The concerned bank carried an appeal to the appropriate Debt Recovery Appellate Tribunal.

3. During the pendency of the proceedings before the DRAT, an operational creditor of the debtor company invoked the provisions of the Insolvency and Bankruptcy Code, 2016 and brought an action before the National Company Law Tribunal in such regard. In due course, a declaration of moratorium under Section 13 of the Code of 2016 came to be made on July 30, 2019 upon admission of the application of the operational creditor.

4. In terms of Section 14 of the Code of 2016, a moratorium fell into place. The combined effect of Section 238 of the Code of 2016 read with Section 231 thereof and Section 14 makes such a moratorium as watertight as possible. As a consequence, no proceedings for the recovery of any dues against the corporate debtor or recovery of its assets or the like could be proceeded with before any forum whether by way of a suit or by way of any other proceedings. The issue that arises is whether the bank's appeal before the DRAT fell within the dragnet of the moratorium under Section 14 of the Code of 2016.

5. However, before such issue is addressed, a question of propriety has to be attended to since the bank questions the very maintainability of the present proceedings by referring to a Supreme Court judgment reported at (2018) 1 SCC 407 (Innoventive Industries Limited v. ICICI Bank). The bank claims that by virtue of such dictum, proceedings cannot be pursued by or at the behest of a corporate debtor while a moratorium is in place and the erstwhile directors of the corporate debtor lose their right to espouse the cause of the company. Notwithstanding the judgment, it does not appear that the right of an erstwhile director as director or the right of a shareholder of a corporate debtor who continues to be a shareholder is jeopardized to the extent that an erstwhile director or a shareholder of a corporate debtor cannot espouse his cause qua the company by seeking to right a perceived wrong. There is no doubt that the Writ Court will be extremely circumspect in entertaining a plea by a director or shareholder of a corporate debtor, but the petition will be maintainable if brought against a statutory authority.

6. Indeed, what the writ petitioner suggests in the present case is that the DRAT order impugned herein dated August 21, 2019 is wholly without jurisdiction and non-est as it is contrary to law. Though the bank seeks to indicate the description of the writ petitioner in the cause-title, the writ petitioner relies on the body of the petition to show that he has also instituted the writ petition in his capacity as a shareholder of the corporate debtor and as such shareholder of the company, he is entitled to bring it to the notice of a constitutional Court that a quasi-judicial tribunal had committed a grievous error in transgressing its authority and passing an order in breach of the statutory command as contained in Section 14 of the Code of 2016. Thus, the initial ground urged by the bank is negatived. A wr