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TMI Blog2017 (9) TMI 1663X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with it in as much as the SICA was repealed and the Forums created thereunder were dissolved by the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 (Act 1 of 2004) which was brought into force by the Insolvency and Bankruptcy Code, 2016 (for short 'the IBC). This Court also held that once the very Forums created under the SICA did not exist, the stay of operation as was available under Section 22 of the SICA would not be available to the respondent-company beyond a period of more than six (6) months in terms of the 8th Schedule notified under Section 252 of IBC. It also granted six weeks time to the respondent company to file counter holding that there is no impediment for company petition to be considered on merits. 3. Subsequent thereto, the National Company Law Tribunal, Hyderabad Bench, Hyderabad (for short 'the NCLT') passed an order dated 19.7.2017 at the instance of a third party M/s. Bharat Steel Industries against the respondent company in CP. No. (D3) 77/6/HDB/2016 under Section 9 of IBC invoking Sections 10 to 22 and 25 of the IBC as under: "(a) We hereby declare the following Moratorium by prohibiting the following actions: (i) The inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs permissible under notifications issued under Section 239(1) of the IBC. 6. He further contended that the term "Court of Law" mentioned in Section 14(1)(a) cannot be made applicable to this Court, and can only apply to a Forum which is subordinate to the NCLT; this Court is not subordinate to the NCLT in any manner; and the Moratorium order passed by the NCLT under Section 14(1)(a) therefore cannot be relied upon by the respondent-company to stop this Court from continuing these proceedings against the respondent-company, which one, is in fact permitted by Section 239(1) and Section 255 of the IBC. 7. He also pointed out that the High Court is a Superior Court of Record and that under Article 215 of the Constitution of India it has all the power of such a Court of Record including the power to punish contempt of itself and it is entitled to consider the questions of its jurisdiction raised before it. He contended that the NCLT is not a Forum superior to a High Court and it's order dated 19.7.2017 cannot be construed as injuncting this High Court from proceeding with the hearing of this winding up petition. 8. I have noted the contentions of both sides. 9. It is settled la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny prior to 15.12.2016 and which is saved by the notifications issued by the Central Government under Section 239 and Section 255 of the IBC. 13. Section 14(1) of IBC insofar as is relevant for our purpose states: "14(1) Subject to provisions of subsections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:- (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any Court of law, Tribunal, arbitration panel or other authority;..." (i) The power of the High Court to decide this winding up petition is also protected by Section 41(b) of the Specific Relief Act, 1963 which bars a Court from injuncting proceedings in a forum not subordinate to it." 14. Under Section 41(b) of the Specific Relief Act, 1963, an injunction cannot be granted to restrain any person from instituting or prosecuting any proceeding in a Court not subordinate to that from which the injunction is sought. 15. The High Courts are constituted under Article 214 of the Constitution of India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court held that such injunction cannot be granted and placed reliance on Section 41(b) of the Specific Relief Act, 1963. Interpreting Section 41(b), the Supreme Court held: "7. Section 41 of the Specific Relief Act, 1963 states: 41. An injunction cannot to granted: (a) xxxx (b) to restrain any person from instituting or prosecuting any proceeding in a Court not subordinate to that from which the injunction is sought; xxx" The predecessor of Section 41(b), Section 56(b) of the Specific Relief Act of 1887 repealed by 1963 Act read as under: "56. Injunction cannot be granted: (a) x x x x (b) to stay proceeding in a Court not subordinate to that from which the injunction is sought." A glance at the two provisions, the existing and the repealed would reveal the legislative response to judicial interpretation. Under Section 56(b) of the repealed Act, the Court was precluded by its injunction to grant stay of proceeding in a Court not subordinate to that from which the injunction was sought. In other words, the Court could stay by its injunction a proceeding in a Court subordinate to the Court granting injunction. The injunction granting stay of pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nciple of comity of Courts as laid down in Yellagola Ramanarsiah's case (supra), does not operate 22. Principle of comity of Courts was recently explained in World Sport Group (Mauritius) Ltd. v. MSM Satellite (Singapore) Pte. Ltd., (2014) 11 SCC 639; by the Supreme Court in the following terms: "22.......what is meant by the principle of "comity" is that Court of one State or jurisdiction will give effect to the laws and judicial decisions of another State or jurisdiction, not as a matter of obligation but out of deference and mutual respect." So the said principle is one of self restraint essentially. 23. In Yellagola Ramanarsiah's case (supra), relied upon by the respondent a decree of eviction passed in a Rent Control case was sought to be executed in violation of an interim injunction granted by a Civil Court against such eviction. In that context this Court applied the said principle and held that the Rent Controller should have waited till the injunction order is vacated or modified and he cannot allow the order of the Civil Court to be circumvented. That judgment is not applicable if the Court which grants the injunction is wholly without jurisdiction. 24. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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