The application sought amendment of the plaint to implead a new ...

Amendment to Add New Defendant Partially Granted; Enforcement of Security Interest Denied Due to IBC Restrictions.

September 7, 2024

Case Laws     Insolvency and Bankruptcy     HC

The application sought amendment of the plaint to implead a new defendant, which was contested on grounds of the bar u/s 14 of the Insolvency and Bankruptcy Code (IBC) and that the amendment fundamentally changes the nature of the suit. The court held that amendments at the pre-trial stage are liberally allowed if necessary for determining the real controversy between parties, unless it changes the nature of the suit or the amended claim would be barred by limitation or statutory provisions. The bar u/s 14(1)(a) IBC prohibits institution or continuation of suits against the corporate debtor once moratorium is ordered, while Section 14(1)(c) bars actions to enforce security interest. The proposed amendment to enforce security interest cannot be allowed, but the court refrained from delving into merits of the claim regarding validity of the subsequent development agreement. The application was partly allowed.

View Source