Back
IN THE HIGH COURT OF JUDICATURE AT ALLAHABAD
SANGEETA CHANDRA, J.
Trading Engineers International Ltd.Thru.Agent Mahipal Singh - Appellant
Versus
U.P. Power Transmission Corp. Ltd. - Respondent
Matters Under Article 227 No. 23908 of 2021
Decided on : 24-08-2022
| Table of Content |
|---|
| 1. filing of petition by corporate debtor under liquidation (Para 1) |
| 2. nature of counterclaim within arbitration process (Para 2 , 3) |
| 3. legal standings of the parties involved (Para 4 , 5 , 6 , 7) |
| 4. high court's jurisdiction under article 227 (Para 8 , 9 , 10) |
| 5. discussion on arbitral tribunal's operational mandates (Para 11 , 12 , 13 , 14) |
| 6. interpretation of moratorium under ibc (Para 15 , 16 , 17) |
| 7. supreme court precedence on arbitration act (Para 18 , 19) |
| 8. policy against judicial interference in arbitration (Para 20 , 21 , 22) |
| 9. role of moratorium in insolvency proceedings (Para 23 , 24 , 25) |
| 10. criteria for supervising arbitration process (Para 26 , 27 , 28) |
| 11. insights into the urgency of the cirp (Para 38 , 39 , 40) |
| 12. indispensability of timely resolution in insolvency (Para 41 , 42) |
| 13. binding nature of approved resolution plans (Para 43 , 44) |
| 14. clarifications on statutory rights regarding debts (Para 45 , 46 , 47 , 48) |
| 15. conclusion of non-maintainability of petition (Para 56 , 57 , 58) |
JUDGMENT :
1. This petition has been filed by the petitioner a Private Limited company which is under liquidation through its Insolvency Resolution Professional (Hereinafter referred to as “IRP”) praying for quashing of the order dated 19.09.2021 passed by the sole Arbitrator (hereinafter referred to as the “learned Tribunal”) in arbitration proceedings Trading Engineers (International) Ltd versus U.P. Power Transmission Corporation Limited (UPPTCL).
The facts relevant for decision of this petition in brief are that the petitioner being under huge debt, several petitions under Sections 7 & 9 of the Insolvency and Bankruptcy Code 2016 (hereinafter referred to as the I & B Code) were filed before the NCLT New Delhi. In one such proceeding, Smt. Vijay Purohit versus Trading Engineers , the NCLT initiated Corporate Insolvency Resolution proceedings by appointment of IRP by its order dated 04.07.2019. In the meantime the petitioner had issued a legal notice on 11.6.2019 to the respondent for initiation of arbitration proceedings for Rs.45,55,18,787/-(Rupees Forty Five Crores Fifty Five Lakhs Eighteen Thousand Seven Hundred Eighty Seven) in terms of the Contracts dated 15.4.2011 and 28.4.2011. On failure of the respondent to reply to such notice the petitioner approached this Court for appointment of a sole Arbitrator. This Court by its order dated 17.03.2020 appointed Justice (Retired) Anurag Kumar. The petitioner filed its Statement of Claim of more than Rs.45 crores on 14.09.2020. The respondent filed a Defence Statement and a Counter Claim of Rs.144,11,93,202/-(Rupees One hundred Forty Four Crores Eleven Lakhs Ninety Three Thousand Two Hundred Two only) before the Learned Tribunalon 16.11.2020. The petitioner also filed a reply.
2. In a connected arbitration proceedings pending before another sole Arbitrator, Justice (Retired) Anil Kumar, a preliminary objection was taken on 25.03.2021 by the respondent that the arbitration proceedings cannot proceed in view of the provisions of Section 14 of the I&B Code.
3. On 08.04.2021, taking a cue from the application of the Respondent in the other arbitration proceedings the petitioner filed an application before the Learned Tribunalfor rejection of the counterclaim stating that it had no jurisdiction to adjudicate as the moratorium ordered by the NCLT was still in operation. The NCLT’s orders were open to challenge before the NCLAT or the Supreme Court of India. The respondent had not challenged the moratorium declared by the NCLT on 4 July 2019. The respondent filed its reply before the Learned Tribunal on 29.05.2021 stating that the determination of counterclaim is not barred under Section 14 of the I&B Code, and the question of violation of Section 14 would only arise when execution proceedings are initiated after determination of dispute and adjudication of claim as well as counterclaim. The petitioner filed another application on 15.06.2021 reiterating its prayer for reject
(1) Negotiable Instruments Act, 1881 – Section 138/141 – Insolvency and Bankruptcy Code, 2016 – Section 14 – Dishonour of cheque – Moratorium – Section 138/141 proceeding against a corporate debtor i....
The main legal point established in the judgment is that Section 14 of the Insolvency and Bankruptcy Code, 2016 does not apply to those proceedings where even the corporate debtor would be a gainer, ....
The main legal principle established in the judgment is the extinguishment of pre-existing and undecided claims upon approval of the Resolution Plan under Section 31 of the Insolvency and Bankruptcy ....
Once a resolution plan is approved under the IBC, all claims not part of the plan are extinguished, and the tribunal lacks jurisdiction to adjudicate on such claims.
The proceedings under Section 7 of the Insolvency and Bankruptcy Code cannot be barred by the pendency of separate proceedings under the Debts Recovery Tribunal, given the overriding effect of IBC pr....
The moratorium provision under Section 14 of the Insolvency and Bankruptcy Code, 2016 does not apply to the natural persons mentioned in Section 141(1) and (2) of the Negotiable Instruments Act.
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.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
