The High Court held that u/s 14(1) of the Insolvency and ...

Corporate debtor's counterclaim can proceed despite moratorium under IBC.

Case Laws     Insolvency and Bankruptcy

August 29, 2024

The High Court held that u/s 14(1) of the Insolvency and Bankruptcy Code (IBC), while a moratorium prohibits institution or continuation of suits against the corporate debtor, it does not prohibit the continuation of a counter-claim filed by the corporate debtor. A counter-claim, as defined under the Civil Procedure Code, relates to a cause of action accruing to the defendant against the plaintiff. Therefore, the recordal of evidence should continue regarding the counter-claim filed by the appellant/defendant, but the moratorium will operate against the claim made by the respondent/plaintiff. The appeal was disposed of accordingly.

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