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IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 16929 OF 2017

(Arising out of S.L.P. (C) No. 18195/2017)

ALCHEMIST ASSET RECONSTRUTION COMPANY LTD. Petitioner(s)

VERSUS

M/S. HOTEL GAUDAVAN PVT. LTD. & ORS. Respondent(s)

O R D E R

1)

Leave granted.

2)

Heard the learned Senior Counsel/Counsel appearing for the

parties.

3)

The facts of the present case disclose a very sorry state of

affairs. Several proceedings had been taken and ultimately a

petition filed under the Insolvency and Bankruptcy Code, 2016 was

admitted on 31.03.2017 by the National Company Law Tribunal,

Principal Bench, New Delhi. As a result, the moratorium that is

imposed by Section 14 came into effect on that date and Respondent

No.3 has been appointed as the Interim Resolution Professional

(IRP). A Writ Petition was filed against this order, which was

admitted only to the extent of the challenge to the vires of the

Insolvency Code, is pending. A Special Leave Petition against this

order was dismissed on 26.04.2017. Meanwhile, despite the

moratorium, a letter was issued by Respondent No.1 to Respondent

No.2 invoking the arbitration clause between the parties and Shri

Pankaj Garg, an Advocate, was appointed as Sole Arbitrator. Shri

Garg entered upon the reference. In an other order dated

Digitally signed by

R.NATARAJAN

Date: 2017.10.26

16:51:54 IST

Reason:

Signature Not Verified

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31.05.2017, the National Company Law Tribunal, Principal Bench, New

Delhi referred to Section 14 (1)(a) of the Insolvency Code and

stated that given the moratorium that is imposed, no arbitration

proceedings could go on. A notice was issued on 29.06.2017 by the

National Company Law Tribunal, Principal Bench, New Delhi in C.A.

No. 186(PB) of 2017.

4)

A First Appeal was filed before the District Judge, Jaisalmer,

Rajasthan under Section 37 of the Arbitration and Conciliation Act,

1996 and by the impugned order dated 06.07.2017, the appeal was

asked to be registered and notice was issued awaiting a reply.

5)

The mandate of the new Insolvency Code is that the moment an

insolvency petition is admitted, the moratorium that comes into

effect under Section 14(1)(a) expressly interdicts institution or

continuation of pending suits or proceedings against Corporate

Debtors.

6)

This being the case, we are surprised that an arbitration

proceeding has been purported to be started after the imposition of

the said moratorium and appeals under Section 37 of the Arbitration

Act are being entertained. Therefore, we set aside the order of

the District Judge dated 06.07.2017 and further state that the

effect of Section 14(1)(a) is that the arbitration that has been

instituted after the aforesaid moratorium is non est in law.

7)

Mr. Jayant Bhushan, learned Senior Counsel, also informs us

that criminal proceeding being F.I.R. No. 0605 dated 06.08.2017 has

been taken in a desperate attempt to see that the IRP does not

continue with the proceedings under the Insolvency Code which are

strictly time bound. We quash this proceeding.

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8) As a result, the appeal is allowed and the steps that have to be

taken under the Insolvency Code will continue unimpeded by any

order of any other Court.

.......................... J.

(ROHINTON FALI NARIMAN)

.......................... J.

(SANJAY KISHAN KAUL)

New Delhi;

October 23, 2017.

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ITEM NO.52 COURT NO.12 SECTION XV

S U P R E M E C O U R T O F I N D I A

RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (C) No(s). 18195/2017

ALCHEMIST ASSET RECONSTRUTION COMPANY LTD. Petitioner(s)

VERSUS

M/S. HOTEL GAUDAVAN PVT. LTD. & ORS. Respondent(s)

(FOR ADMISSION and I.R. and IA No.57914/2017-EXEMPTION FROM FILING

O.T. and IA No.57