Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + AT Insolvency and Bankruptcy - 2022 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (8) TMI 476 - AT - Insolvency and BankruptcyMoratorium - raising of presumptions - It is the contention of the Learned Counsel for the Applicant/Appellant that once a Moratorium is in place, continuation of any Suit or Proceeding in any Court/Tribunal/Forum/Authority against the Corporate Debtor shall be stopped until the completion of CIRP - continuation of the proceedings will be in violation of Section 14 of the I & B Code, 2016 - interplay between section 14 and section 32A of IBC - HELD THAT:- As a matter of fact, the word Moratorium is defined in P RamanathaIyer’s Advanced Law Lexicon (5th Edition) 2017 Vol. III at Page 3348 meaning Authorisation of suspension of payments by a Debtor for a specified time - The term Moratorium is described as a legal authorisation to a Debtor to defer the payment for a certain time as per Schedule Article 53 of the Asian Development Bank Act. Raising of presumption - HELD THAT:- It is pertinently pointed out by this Tribunal that the employment of the word Shall raises a presumption that specific provision is imperative - It is worthwhile to mention that Rule 57 (2) of Schedule 2 to the Income Tax Act, 1961, provides that the full amount of purchase money payable shall be paid by the Purchaser to the Tax Officer on or before 15th day from the date of Sale of Property. Effect of Moratorium& its Breach - HELD THAT:- A mere running of the eye of the word Shall employed in Section 14 (1) of the I & B Code, 2016, symbolises that on declaration of Moratorium, it is mandatory for the Adjudicating Authority to pass an Order prohibiting the filing or continuation of pending Suits or Proceedings; against the Corporate Debtor. In this connection, this Tribunal points out that when a Statute employs the word Shall ex facie, it is mandatory. As per Section 14 (4) of the Code, the Order of Moratorium is to have effect from the date of such an Order till the completion of Corporate Insolvency and Resolution Process. However, during the Corporate Insolvency and Resolution Process, if the Adjudicating Authority (NCLT) approves the Resolution Plan as per Section 31 (1) of the I & B Code or passes an Order for Liquidation of Corporate Debtor under Section 33, the Moratorium has to cease to have effect from the date of such an Approval or Liquidation, as the case may be - No wonder, Section 74 of the I & B Code, 2016, prescribes punishment for violation of the terms of the Moratorium Order under Section 14 of the Code or approved Resolution Plan, under Section 31 of the Code. Application disposed off.
|