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2019 (12) TMI 1580 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Corporate Applicant/Financial Creditors - existence of debt and dispute or not - HELD THAT:- Hon'ble High Court of Delhi in Liberty House Group Pte Ltd. Vs. State Bank of India and Ors. [2019 (2) TMI 1453 - DELHI HIGH COURT] which dealt with the issue regarding the jurisdiction of the Civil Court to entertain any suit or proceedings and grant interim injunction restraining encashment of bank guarantees and the objection of the defendants to the subject jurisdiction of the Civil Court was for consideration and whether NCLT has the jurisdiction under the I &B Code, 2016 - it can be said that the ratio laid down in the above judgement clearly states that no Civil Court shall have the jurisdiction to entertain any suit or proceedings in respect of any matter on which the National Law Company Tribunal has jurisdiction under the I & B Code, 2016. The Core issue is whether NCLT can order possession of the property of Corporate Applicant to facilitate the CIRP process and allow the Resolution Professional to take possession of the assets of Corporate Applicant, pending adjudication of pending suit filed by Corporate Applicant seeking possession of the shed from the applicant. Section 60(5) and (b)(c) of the Code empowers NCLT to entertain the dispute raised in the suit, section 63 of the Code further bars the jurisdiction of the civil court in matters pertaining to the NCLAT, section 231 of the Code also bar the jurisdiction of the civil court from granting any injunction in respect of any action taken or in pursuance of any order passed by the Adjudicating authority under this Code - Upon conjoint reading of section 60(5), section 63, section 231 and section 238, the jurisdiction of Civil Court is excluded related to the matters related to I & B code. Therefore, it can be held that NCLT can order possession of the property of Corporate Applicant to facilitate the CIRP process and allow the Resolution Professional to take possession of the assets of Corporate Applicant. The principles of comity would be affected if conflicting order were passed by the Civil Court and the NCLT the same would be detrimental to the resolution process. The office of Resolution Professional has become functus officio, the Liquidator has been appointed, the liquidator subject to the directions of the Adjudicating Authority under section 35(1)(b) has the power to take into his custody or control all the assets, property effects an actionable claim of the Corporate Applicant - the non-obstante clause as prescribed section 238 of the I & B Code, 2016, provides that the provisions of the Code shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. It is the case of Corporate Applicant that he is seeking possession in the suit, whereas the Applicant is only claiming recovery of monies in his suit. There are no restraint orders passed in both the cases. Therefore, the Resolutions Professional's claim for possession of shed before the adjudicating authority in view of CIRP order, can be entertained under the I & B Code - the applicant has also filed his claim before the Resolution Professional and has subjected himself to the jurisdiction of the CIRP. His claim was rejected by the RP. In view of the moratorium, the suit filed by the applicant was temporarily stayed, but the suit filed for recovery of possession filed by the Corporate Applicant would deemed to continue. With the given factual matrix, the CIRP period of 270 days having come to an end, the office of IRP has become functus officio. In view of the overriding powers under section 238 of the Code and Rule 11 of NCLT Rules 2016, and it is directed that Resolution Professional/ Liquidator shall be allowed to take possession of the Shed from the Applicant - the RP/ Liquidator is directed to take possession of the Shed - application disposed off.
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