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2019 (1) TMI 1937 - HC - Insolvency and BankruptcyContinuance of the suit and interlocutory proceeding during the moratorium period - whether a suit for passing off would embrace a suit under Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016? - HELD THAT:- Section 14 has clearly defined the classes of persons who are restrained from proceeding against the company. The classes of creditors include both secured and unsecured creditors. The statute insulates the corporate debtor against any debt recovery actions which are likely to endanger, diminish, dissipate or seriously affect the assets of the corporate debtor and such protection is to continue during the calm period. The emphasis is on to keep the corporate debtors' assets together during the insolvency resolution process and facilitate orderly completion of the process envisaged during the insolvency resolution process. In the instant case, although the relationship between the plaintiffs and the defendant is not a creditor-debtor relationship and the principle claim is not for realization of any debt, however, the continuation of the said proceeding might lead to affectation of the intellectual property rights of the defendant at least in relation to the four marks, namely Numbers 1988894, 2353792, 3373391 and 3518558, in respect whereof the defendant is the registered holder of the trademarks - Since any decision in favour of the plaintiffs in this proceeding may likely to affect the assets of the corporate debtor and in maximizing its asset value during the pendency of the said proceeding, the suit and the interlocutory proceedings cannot proceed against the corporate debtor during the insolvency resolution process. The proceedings in the suit and the interlocutory proceedings therein are stayed till 30th June, 2019, with liberty to mention in the event the insolvency resolution process comes to an end prior to the adjourned date. The application is adjourned till 1st July, 2019.
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