9911796707
TMI Blog2019 (8) TMI 916X X X X Extracts X X X X X X X X Extracts X X X X ..... ebtor . Under Section 14(1)(a) of the Code, strictly speaking, a counter claim would be covered by the moratorium which bars the institution of suits or continuation of pending suits or proceedings against the corporate debtor . A counter claim would be a proceeding against the corporate debtor. However, the counter claim raised in the present case against the corporate debtor ie., the Plaintiff, is integral to the recovery sought by the Plaintiff and is related to the same transaction. Section 14 has created a piquant situation i.e., that the corporate debtor undergoing insolvency proceedings can continue to pursue its claims but the counter claim would be barred under Section 14(1)(a). When such situations arise, the Court has to se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Plaintiff that an agreement had been entered into, supplies were made and various amounts are due towards excess payments, damages and other costs. The Defendant has filed its written statement/counter claim in which it avers that it is, in fact, entitled to recover a sum of ₹ 59,51,548/- and no amount is due and payable by it to the Plaintiff. 2 2. The Plaintiff company has since gone into insolvency and a Resolution Professional has been appointed. The question has arisen as to whether the adjudication of the counter claim would be liable to be stayed in view of Section 14 of the Code. The contention of ld. counsel for the Plaintiff is that the claim of ₹ 59,51,548/- by the Defendant is in the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld require to be adjudicated on the basis of correspondence and the agreement, which have been placed on record. This Court would have to first determine the question as to whether any amount at all is payable to the Plaintiff. Even if the counter claim is decreed fully and the claim of the Plaintiff is also allowed, the Plaintiff would, in fact, be entitled to recover and not the Defendant. The possible outcome of the suit and the counter claim is in the realm of uncertainty. The question as to the amount that would be liable to be paid by either party to the other is not something that can be predicted at this point. The entitlement of the Defendant to the amount claimed from the Plaintiff is also not concrete and settled. There is no do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 34 (i.e. objections to the award) and under section 36 (i.e. the enforceability and execution of the award). The proceedings under section 34 are a step prior to the execution of an award. Only after determination of objections under section 34, the party may move a step forward to execute such award and in case the objections are settled against the corporate debtor, its enforceability against the corporate debtor then certainly shall be covered by moratorium of section 14(1)(a). 6. A perusal of the judgment shows that until and unless the proceeding has the effect of endangering, diminishing, dissipating or adversely impacting the assets of corporate debtor, it would not be prohibited under Section 14(1)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ictly speaking, a counter claim would be covered by the moratorium which bars the institution of suits or continuation of pending suits or proceedings against the corporate debtor . A counter claim would be a proceeding against the corporate debtor. However, the counter claim raised in the present case against the corporate debtor ie., the Plaintiff, is integral to the recovery sought by the Plaintiff and is related to the same transaction. Section 14 has created a piquant situation i.e., that the corporate debtor undergoing insolvency proceedings can continue to pursue its claims but the counter claim would be barred under Section 14(1)(a). When such situations arise, the Court has to see whether the purpose and intent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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