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2022 (12) TMI 1200 - HC - Insolvency and BankruptcyScope of the IBC - CIRP - Effect of moratorium - proceedings where both the parties may gain out of the agreement/contract. - Dishonor of cheque - Time-lines for completion of the insolvency resolution process by the Adjudicatory Authority - delay in completion of the proceedings otherwise - Prayer to consider the issue in the public interest so that the object and purpose of the Code of 2016 is served and at the same time Sections 12 and 14 of the Code of 2016 are given effect to for the purpose sought to be achieved therein - HELD THAT:- The issue therein was in reference to the proceedings under Section 138 of the Negotiable Instruments Act, 1881, which was alleged to be outside the scope of Section 14 of the Code of 2016. The argument was not accepted by the Apex Court despite the proceeding not being exactly of civil nature, but having impact on the corporate debtor for a monetary obligation and it was held that such proceedings would come under the prohibition of Section 14 of the Code of 2016 - The primary focus of the legislation is to ensure revival and continuation of the corporate debtor by protecting it from its own management and from a corporate death by liquidation. The time-lines given therein have also been referred by the Apex Court as a measure to protect all its creditors and workers by seeing that the resolution process goes through as fast as possible. The reference of Section 85 of the Code of 2016 in Chapter II in Part III of the Code of 2016, has also been given to show the effect of admission of application, i.e., on the date of admission of the application, the moratorium period shall commence in respect of all the debts. The provision aforesaid does not refer to any other proceeding than in reference to the debts. Section 14 of the Code of 2016 is meant to refer those proceedings where even the corporate debtor would be a gainer, apart from third party, because third party would not fall under the definition of “creditor”. The bankruptcy proceedings remains generally to secure the institution by applying the measures given under the Code of 2016 and it is mainly in reference to the debt liability of the company and not to apply during the period of moratorium. It does not exclude application of other provisions to be given effect to and as the petitioner illustrated, in regard to the exclusion of the decree for specific performance where even a corporate debtor would be receiving the monies. The issue that now remains is about the maintainability of the public interest litigation. The writ petition has been filed showing it to be in public interest, but other than to refer to the work of research by the petitioner, who is pursuing her studies in Post Graduation, no other reason has been given to indicate the public interest. The purpose of public interest litigation is quite different than as construed by the petitioner - We, therefore, do not find the writ petition to be maintainable as a public interest litigation, but appreciating the work undertaken by the petitioner to seek interpretation of the provisions, this court has summarized the issue and made clarification of the issue by giving interpretation of the provisions therein. The writ petition is disposed of.
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