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TMI Blog2021 (12) TMI 1408X X X X Extracts X X X X X X X X Extracts X X X X ..... at in P. Mohan Raj's case [ 2021 (3) TMI 94 - SUPREME COURT ], a three Judge Bench of the Apex Court has categorically held that the moratorium provision contained in Section 14 of the IBC would include proceedings under Section 138 of the Negotiable Instruments Act also and by token of the same reasoning, proceedings initiated by the respondent under the GST Act would also attract the embargo contained in Section 14 of the IBC. Insofar as the contention urged by the respondent - state with regard to proceedings to be initiated later by the respondent against the petitioner as being barred by limitation is concerned, the said contention cannot be accepted in view of the non-obstante clause contained in Section 60 (6) of the IBC which excludes the entire period during which the moratorium is in force; so also Section 75 (1) of the GST Act also excludes the entire period from 29.09.2021 onwards when this court passed an order of stay up to the date of completion of the CIRP and lifting of the moratorium and as such, even this contention urged by the respondent cannot be accepted. All proceedings pursuant to the impugned notices, intimations, orders, etc. issued/passed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the various contentions urged in the petition and referring to the documents produced by the petitioner, learned Senior counsel for the petitioner invited my attention to the material on record including the amended petition and subsequent documents in order to point out that despite the petitioner replying to the notices issued by the respondent and specifically intimating the respondent that no proceedings against the petitioner can be continued in view of the moratorium declared by the National Company Law Tribunal (for short NCLT) Bengaluru Bench, Bengaluru against the petitioner on 26.10.2018 thereby initiating corporate insolvency resolution process against the petitioner, all suits, proceedings, etc. initiated against the petitioner cannot be continued till the moratorium is lifted in accordance with the Insolvency and Bankruptcy Code, 2016 (for short the 'IBC'), the respondent is illegally and arbitrarily attempting to continue the proceedings against the petitioner which are without jurisdiction or authority of law and contrary to Section 14 of the IBC and as such, the petitioner is before this court by way of the present petition. In support of his contention lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2021 onwards when this court passed an order of stay up to the date of completion of the CIRP and lifting of the moratorium in the event the impugned proceedings are quashed by this court. It is therefore submitted that any proceedings to be initiated by the respondent against the petitioner after completion of the CIRP and lifting of the moratorium would be well within limitation in the light of the aforesaid provisions and consequently, the said apprehension voiced by the respondent cannot be made the basis for this court to reject the claim of the petitioner put forth in the present petition. 6. I have given my anxious consideration to the rival submissions and perused the material on record. 7. Before adverting to the rival contentions, it is necessary to extract Section 14 of the IBC which reads as under: 14. Moratorium - (1) Subject to provisions of sub-sections (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, dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebtor. (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 corporate debtor under section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be. 8. A plain reading of Section 14 of the IBC will clearly indicate that there is a complete/total embargo/bar to initiate and continue proceedings against the petitioner before any other authority including the respondent - authority also during the pendency of proceedings before the NCLT and appeal(s) to be filed against the same, if any, when the moratorium/CIRP is in force and has not been lifted; it is relevant state that neither the words 'proceedings' nor 'authority' have been defined under the IBC and consequently giving the said words their plain grammatical meaning, the only inference that arises from a reading of Section 14 would be th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... insolvency resolution process or until this Bench approves the resolution plan under sub-Section (1) of Section 31 or passes an order for liquidation of corporate debtor under Section 33, as the case may be. Consequently these appeals are disposed of with liberty to the Appellant-Department to revive them subject to the further orders of the NCLT The said order of the Delhi High Court was confirmed by the Apex Court in SLP No. 6483/2018 dated 10.03.2018. 9. In Dishnet's case supra, a learned Single Judge of the Madras High Court, after noticing the decision of the Delhi High Court has held as under: 5. It is further stated by the learned counsel for the petitioner-Companies that on 12.03.2018/19.03.2018, the National Company Law Tribunal (for short, 'the NCLT'), Mumbai, had admitted the applications preferred by the petitioners and initiated CIRP against the petitioner-Companies and declared Moratorium in terms of Section 14 of the IBC. Since the order has already been passed by the NCLT on 12.03.2018/19.03.2018, granting Moratorium by virtue of Section 14 of the IBC, no recovery proceedings could be initiated against the petitioner-Companies' propertie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw for the time being in force or any instrument having effect by virtue of any such law. Hence, learned counsel for the petitioners submitted that the impugned orders cannot be passed by the second respondent and prayed for quashing the impugned orders passed by the second respondent. 8. Learned Standing Counsel appearing for the respondents filed detailed counter affidavits in both the Writ Petitions and submitted that Section 201(1-A)(3) of the Income Tax Act does not refer to either Section 14 or Section 238 of the IBC. Referring to Section 153 of the Income Tax Act, learned Standing Counsel appearing for the respondents stated that when time limit for completion of assessment has been made, it is clear that no order of assessment shall be made under Section 143 of Section 144 of the Income Tax Act at any time after the expiry of 21 months from the end of the assessment year in which the income was first assessable. She further contended that the second respondent, as per the time limit imposed against him, has completed the assessment. Moreover, as alleged by the respondents, the respondents have not proceeded to take any coercive steps for recovery of the demand arrived at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial 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 corporate debtor under section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be. Section 238: Provisions of this Code to override other laws: - The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. 10. A perusal of the above provisions clearly tells us that once an order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned, the said contention cannot be accepted in view of the non-obstante clause contained in Section 60 (6) of the IBC which excludes the entire period during which the moratorium is in force; so also Section 75 (1) of the GST Act also excludes the entire period from 29.09.2021 onwards when this court passed an order of stay up to the date of completion of the CIRP and lifting of the moratorium and as such, even this contention urged by the respondent cannot be accepted. 13. In the result, I pass the following: ORDER (i) Petition is hereby disposed of. (ii) All proceedings pursuant to the impugned notices, intimations, orders, etc. issued/passed by the respondent against the petitioner are stayed/suspended/kept in abeyance till disposal of the proceedings before the NCLT, Bengaluru and also further appeal(s), if any, that may be filed by any of the parties and lifting of the moratorium and completion of the corporate insolvency resolution process insofar as the petitioner is concerned. (iii) Liberty is reserved in favour of the respondent to continue/initiate proceedings against the petitioner after disposal of the proceedings and lifting of the moratorium and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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