Court confirmed the applicability of the Provincial Insolvency Act, 1920 due to non-notification of specific provisions of the Insolvency and Bankruptcy Code, directing civil courts to entertain such applications.

THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE SUDDALA CHALAPATHI RAO WRIT PETITION No.29658 OF 2025 ORDER : (per Hon’ble Sri Justice P.Sam Koshy)

Mr.K.V.Subba Reddy, learned counsel for the petitioners and Mr.B.Narasimha Sharma, learned Additional Solicitor General representing Mr.Angothu Nehru, learned Central Government Standing Counsel, for respondent Nos.1 to 3.

2. The instant Writ Petition has been filed seeking for the following relief:

“It is therefore prayed that this Hon’ble High Court may be pleased to issue a Writ or Order or Direction more particularly one in the nature of the Writ of Mandamus to declare the action of the concerned Civil Court for not entertaining the Insolvency petition filed by the petitioners under the Provincial Insolvency Act , 1920 by the petitioners is without jurisdiction and consequently direct the either the concerned Civil Court to entertain the application made by the petitioner under the Provincial Insolvency Act , 1920 or Debt Recover Tribunal to receive the Application filed under the Insolvency and Bankruptcy Code , 2016 by setting aside the Docket order dated 18.06.2025 in IP SR/CFR No.1010/2025 on the file of the Principal Senior Civil Judge, Mancherial, Mancherial District and pass such other order or orders as this Hon’ble Court may deem fit and proper in the circumstances of the case in the interests of justice.”

3. On the previous date of hearing, learned Central Government Standing Counsel appearing for respondents has taken time to seek appropriate instructions from the concerned Magistrate at the Central Government level.

4. Today, learned Additional Solicitor General for the respondents has received the instructions saying that the provisions of the IBC pertaining to individual insolvency has been notified only for such individuals who have stood as personal guarantor to the corporate debtor and not for other individuals.

5. In the light of the instructions that he has received, learned Additional Solicitor General was of the firm view that the matter would be one which has to be seized by the civil Court having jurisdiction.

6. In addition, we are also strongly persuaded by two decisions of the High Court. One from this very High Court where the batch of writ petitions viz., WP.No.s29517 of 2017 and batch which stood disposed of on 15.09.2017, whereby the Division Bench has categorically held in its operative portion as under:

“As Section 243(1) of the Code has not been brought into force, by way of a notification to be issued by the Government of India under Section 1(3) of the Code, it is clear that neither the Presidency Towns Insolvency Act, 1909 nor the Provincial Insolvency Act , 1920 have been repealed; and both these enactments continue to remain in force. Further, As Section 179(1) of the Code has also not been brought into force, the Debts Recovery Tribunal is justified in not entertaining such applications.

We consider it appropriate, therefore, to direct that the adjudicating authorities (Senior Civil Judges concerned) under the Provincial Insolvency Act , 1920 shall entertain the insolvency applications in as much as the provisions of the said Act continues to remain in force, and does not stand repealed till date.”

7. The same was the view taken by the Karnataka High Court in WP.No.56412 of 2017 decided on 07.06.2024. The same view was also been taken by this Court in case of Yanduru Venkata Narasimha Rao v. Inampudi Srinivasa Rao , [2018(3)ALD 288]

8. In view of the aforesaid judicial precedents and also the instructions that have been received by learned Additional Solicitor General, we a