TMI Blog2019 (1) TMI 872X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is explicit from the interim order dated 15.10.2018 passed by the Appellate Tribunal that though moratorium has not been declared with respect to respondent Company, but the interim directions are identical to the provisions of Section 14 of the Code. Therefore, the principle that declaration of moratorium will not cause to stay the proceedings beneficial to corporate debtor, are also applicable in the present case. Interim order prohibits the proceedings against IL&FS (respondent herein) and its 348 Group Companies, which restrains any kind of recovery from the respondent herein, but not the proceedings beneficial to IL&FS, entitling it for recovering any amount from other parties. Sine die adjournment of present case would run contrary to the interest of respondent Company herein, as it would amount the interim stay against the interest of respondent Company. From the combined reading of interim directions contained in order dated 15.10.2018, it is evident that stay has been ordered against the proceedings having adverse effect on the financial resources of IL&FS (respondent herein), therefore, interim order dated 15.10.2018 will not be applicable in present proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any security interest created over the assets of IL FS and its 348 group companies including any action under the Securitization and Reconstruction of any Financial Assets and Enforcement of Security Interest Act, 2002; (iii) The acceleration, premature withdrawal r other withdrawal, invocation of any term loan, corporate loan, bridge loan, commercial paper, debentures, fixed deposits, guarantees, letter of support, commitment or comfort and other financial facilities or obligations vailed by IL FS and its 348 group companies whether in respect of the principal or interest of hedge liability or any other amount contained therein. (iv) Suspension of temporarily the acceleration of any term loan, corporate loan, bridge loan, commercial paper, debentures fixed deposits and any other financial facility by the IL FS and its 348 group companies by any party or person or Bank or Company, etc. as the date of first default. (v) Any and all banks, financial institutions from exercising the right to set off or lien against any amounts lying with any creditor against any dues whether principal or interest or otherwise against the balance lying in any bank accounts and depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on merits, which would definitely have an adverse effect on the financial claim of the respondent. 7. Order dated 15.10.2018 passed by Appellate Tribunal is not an order passed under Section 14 of the Code, but this order has been passed pending consideration the issues framed by Appellate Tribunal, which are as under:- (i) Whether the Tribunal can pass appropriate order under Section 241 read with Section 242 of the Companies Act, 2013 for resolution of the problems faced by the Company in a time-bound manner for maximization of value of assets of the Company, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders, and in case of failure of resolution pass appropriate order of liquidation; and (ii) Whether the Tribunal in exercise of powers conferred under Section 242(1)(b) read with Section 242(2)(m) and Section 242(4) of the Companies Act, 2013 read with Rule 11 of the National Company Law Tribunal Rules, 2016, can pass appropriate interim order similar to order under Section 14 of the Insolvency and Bankruptcy Code, 2016. 8. It is observed in para 2 of the order dated15.10.2018 that no petition under any of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor. (2) The supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period. (3) The provisions of sub-section (1) shall not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator. (4) The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process: Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of section 31 or passes an order for liquidation of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is explicit from the interim order dated 15.10.2018 passed by the Appellate Tribunal that though moratorium has not been declared with respect to respondent Company, but the interim directions are identical to the provisions of Section 14 of the Code. Therefore, the principle that declaration of moratorium will not cause to stay the proceedings beneficial to corporate debtor, are also applicable in the present case. 15. In order dated 15.10.2018, Appellate Tribunal has appreciated the difficulties which are being faced by the IL FS (respondent herein) and its 348 Group companies and at the time of passing of interim directions, Appellate Tribunal, observing in unambiguous words, has stated that stay order has been passed taking into consideration the interest of larger public and economy of Nation and also for protecting the interest of IL FS (respondent herein) and its 348 Group Companies. Therefore interim order has been passed in the interest of IL FS (respondent herein). Present proceeding under Section 9 of the Act are not for recovering any debt from respondent. Interim order prohibits the proceedings against IL FS (respondent herein) and its 348 Group Companies, which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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