9911796707
TMI Blog2020 (1) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the IBC. This is by reason of the fact that the respondent award-holder could not have filed a claim before the NCLT/IRP since the Section 34 proceedings had not been decided in favour of the said respondent in 2017 and hence there was no final or adjudicated claim as on that date. Further, once the stage under Section 14 of the IBC, namely, moratorium with regard to continuation of pending proceedings against the Corporate Debtor has been declared to be over, no further embargo remains for continuing to hear suits and other proceedings to which the Corporate Debtor (the petitioner in this case) is a party. This Court finds no basis for relegating the Section 34 to the backburner. Although, no formal application has been made, this Court deemed it fit to pass this order since detailed submissions have been made by Counsel appearing for the parties. List the application on 21st January, 2020. - A.P. No.550 of 2008 - - - Dated:- 10-1-2020 - MOUSHUMI BHATTACHARYA J. For the Petitioner : Mr. Syamantak Banerjee, Adv. Mr. Prasanta Dutt, Adv. Mr. Susanta Dutt, Adv. For the Respondent : Mr. Sudip Deb, Adv. Mr. Deepak Jain, Adv. Mr. Riju Ghosh, Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Insolvency Code either prematurely or as a substitute for debt enforcement procedures. 6. Upon considering the submissions of learned counsel appearing for the parties, certain relevant facts are required to be stated at the outset; (i) the Reference was made on 18th June, 2001 and the Arbitrator was appointed on 2nd March, 2006. (ii) the arbitral Award was delivered on 7th July, 2008 for a sum of ₹ 3,21,927.70/- at 9% per annum in favour of the respondent/claimant (iii) the present application for setting aside of the Award was filed on 31st October, 2008 (iv) Operational Creditors initiated proceedings under the IPC against the petitioner (Corporate Debtor) in September 2017. (v) By an order dated 19th July, 2018, the adjudicating authority declared that the moratorium order under Section 14 shall cease to have effect (vi) the application under Section 34 of the 1996 Act was taken up for hearing by this court on 11th December, 2019. 7. For understanding the scope of the order passed by the NCLT on 19th July, 2018, the sequential stages which are of significance as contemplated under the IB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reditors shall be binding on the corporate debtors and its employees, corporate debtor stakeholders etc. under Section 31. 8. The respondent before the Supreme Court in K. Kishan was the award-holder whose attempts for initiation of corporate insolvency resolution process as an operational creditor under Section 9 of the IBC had been allowed by the NCLT and upheld by the NCLAT. The appellant Award debtor opposed such initiation of the provisions of the IBC before the Supreme Court upon which the Supreme Court examined whether the IBC can be invoked in respect of an operational debt where an Arbitral Award has been passed against the operational debtor and is pending adjudication. On considering the relevant dates on which the parties made their respective moves, the Supreme Court cautioned against the improper use of the insolvency process as a substitute for debt enforcement procedures. Relying on the decision in Mobilox, the court placed emphasis on the existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the Demand Notice of the unpaid operational debt in relation to such disput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suit or an arbitration must be given precedence to the insolvency proceedings. 9. Although the facts of the present case are different from K. Kishan since in that case it was the award-holder who had sought to resort to the corporate insolvency process and the award debtor had sought to rely on the arbitration pending between the parties, the caution sounded by the Supreme Court in that decision finds an echo in the present case. Here it is the award-holder who seeks to go on with Section 34 application while the award debtor (petitioner before this court) takes the plea of the proceedings before the NCLT. Further in K. Kishan, both the parties before the Supreme Court were before the NCLT and the NCLAT. In this case, the award-holder/respondent is admittedly not before the NCLT. The contentions of the petitioner/award debtor assume significance since the petitioner seeks to take refuge in the insolvency proceeding where the applicants/operational creditors are third parties who are in no way connected with the arbitration between the petitioner and the respondent. Whatever be the factual differences between the present case and K. Kishan, the intention of the Su ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
