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TMI Blog2025 (3) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... tor, is only recorded to be rejected.
This Court finds merit in the plea advanced by the learned counsel for the appellant/plaintiff that the period of moratorium, i.e., from 14.05.2018 to 28.11.2019, must be excluded. It is during such period that the two suits were dismissed for non-prosecution on 04.06.2018. The fact that the application was filed on 06.12.2018, despite instructions from the IRP on 05.10.2018, does not carry significant weight, especially considering that the appellant/plaintiff was entangled in the Corporate Insolvency Resolution Process, which was eventually successful and resulted in the revival of the company. The said delay, if any, ought to be condoned.
Conclusion - The period of moratorium under Section 14 of the IBC must be excluded when computing the limitation period for filing restoration applications under Order IX Rule 9 of the CPC.
The impugned order set aside - matter is remanded back to the learned Trial Court for further trial of the matter in accordance with law - appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... the suit for recovery filed by it and leave the Court as well as the defendant, in dark. In my view, it was the duty of the applicant herein to inform this Court that it was facing financial problems, which were impeding its ability to pursue CS No.6555/16. 6. Secondly, both the aforesaid applications are liable to be dismissed because upon receipt of the email dated 07.11.2017, it was the duty of the Ld. Advocate(s) for the applicant to inform this Court that owing to financial problems the applicant is unable to pursue CS No.6555/16 and to seek their discharge from CS No.6555/16, instead of simply abandoning CS No.6555/16. In this regard, reference is craved to the judgment in Lai Bahadur Gautam v State of U.P., (2019)) 6 SCC 441 wherein the Hon'ble Supreme Court has highlighted the duty of an Advocate towards the Court. 7. Thirdly, both the aforesaid applications are liable to be dismissed because upon service of the Court notice (referred in the Order dated 04.06.2018, passed in CS No.6555/16), the applicant should have appeared in this Court, on 04.06.2018 and in so far as the said misdemeanor is concerned, the position of the applicant is indefensible. 8. Fourthly, bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the Corporate Debtor, not in respect of suits or legal proceedings initiated by it. DECISION: 8. Having heard the learned counsels for the parties and after a meticulous perusal of the record, this Court finds that the impugned order dated 28.07.2022 cannot be sustained in law. Indeed, even if the plea of the learned counsel for the respondent is accepted that no appearance was put on 06.11.2017 as well as on three successive dates thereafter by/on behalf of the appellants, and that the suit was dismissed for non-prosecution on 04.06.2018, the fact remains that evidently an email dated 07.11.2017 had been sent to the learned counsel representing the appellant/plaintiff instructing them to hold all proceedings due to financial constraints. 9. It is also borne out from the record that proceedings under the IBC were initiated by the appellant/plaintiff, i.e., the erstwhile Corporate Debtor on 29.01.2018. Thus, there is no merit in the plea that the application under Order IX Rule 9 of the CPC was filed by the same set of counsels, for the simple reason that the moratorium that crept in on filing of the proceedings under the IBC left no legal right or power in the Ex-Directors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plans are received by the resolution professional and the resolution plan which is finally approved by the committee of creditors and still further at the hands of the adjudicating authority, would result in the curtains being wrung down on the moratorium under Section 31 (3). During this entire period, what is noteworthy is that while in law and in form, the corporate debtor continues to exist and represented by the interim resolution professional to begin with and the resolution professional thereafter, the erstwhile management of the corporate debtor is displaced. When the resolution plan is approved, a new management takes over. All this is contemplated when the CIRP is successful. Undoubtedly, if it is unsuccessful, the corporate debtor slips into liquidation. Therefore, on the one hand, an application under Section 7, 9 or 10, does bring in a period which is intended to bring a corporate debtor back to life if possible, 'a period of calm', in the words of the respondent. But this is a period during which the management of the corporate debtor is displaced, ironically, a period of turbulent churning. While it may be true that proceedings by the corporate debtor through the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the period of limitation. In other words, present an order of Moratorium under Section 14, the entire period of the Moratorium is liable to be excluded in computing the period of limitation even in a suit or an application by a corporate debtor. 26. The contention of the learned Senior Counsel for the appellant based on the approval of the resolution plan and the effect of Section 31 apparently of the IBC does not appeal to us. What Section 31 of the Act, IBC undoubtedly proclaims is that on approval of the resolution plan by the adjudicating authority the plan becomes binding on a corporate debtor, its employees, members, creditors, the Central Government any State Government or any local authority as provided therein, guarantors and others stakeholders involved in the resolution plan. We are unable to perceive how the appellant can derive support from the said provision. In fact, taking the scheme of the IBC Section 60 (6) would become an integral part of the scheme which will enure to the benefit of the resolution applicant which is enabled to take suitable measures to ventilate its legitimate grievances by excluding the period during which a Moratorium was enforced for th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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