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CS(OS)444/2014,LA.20147/2014,2230/2015,5610/2015, 12848/2016
PUNJ LLOYD LIMITED Plaintiff
Through: Mr. Dhruv Dewan and Ms. Yashna Mehta,Advocates(M;9818921502).
Through: Ms. Mamta Tiwari and Ms. Cham Ambwani, Advocates (M:
7838683884).
SABIC UICPETROCHEMICALSLTD Decree Holder
Through: Ms. Mamta Tiwari and Ms. Cham Ambwani, Advocates (M:
7838683884).
Through: Mr. Dhmv Dewan and Ms. Yashna Mehta,Advocates(M:9818921502).
ORDER o/o 26.03.2019
JUDGMENT
1 CS(OS)444/2014 has been filed by Punj Lloyd Limited seeking a declarationthatjudgmentand decree dated 10"'October,2013 passed bythe English Technology and Constmction Court in Case No. HT-11-311 is incapable ofbeing enforced inIndia and a permanentinjunction restraining SABIC UK Petrochemicals Limited from relying upon the said Page I of[6] CS(OS)444/2014 2019:DHC:7725 < tA judgement/decree.
2. Execution Petition No. 88/2015 has been filed by SABIC UK Petrochemicals Limited to seek enforcement and execution of the said judgement.Both these matters were partheard from time to time.
3. Today,learned counsels for the parties have placed before the Court an order dated 8^*^ March, 2019 passed by the National Company Law Tribunal New Delhi. By the said judgement, in an application filed by ICICI Bank Limited, a financial creditor ofPunj Lloyd Limited, the NCLT has declared a moratorium and appointed an interim resolution professional. Paragraphs25 and 26 ofthe said order are set outbelow:-
CS(OS)444/2014 2 of[6] < notified by the Central Government in consultation with anyfinancial regulator;(b)a surety in a contract ofguarantor to a Corporate Debtor. Additionally, the supply ofessential goods or services to the Corporate Debtor as may be specified is not to be terminated or suspended or interrupted during the moratorium period. These would include supply of water, electricity and similar other services or supplies as provided by Regulation 32 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations,2016."
4. The interim resolution professional has now taken charge of the affairs of the company. As per the moratorium, the continuation of any pending suit where a debtis soughtto be recovered is barred under Section 14 of the Insolvency and Bankruptcy Code, 2016. Learned counsel appearingfor SABICUKPetrochemicalsLimited submitsthatshe wishesto withdraw the execution petition, leaving her remedies open before the NCLT. The petition is dismissed as withdrawn with liberty to the petitioner SABIC UK Petrochemicals Limited to approach the NCLT and file its claims before the NCLT in accordance with law. If for any reason including the pendency of CS(OS)444/2014, the claims of SABIC UK Petrochemicals Limited are not entertained by the NCLT,liberty is granted to revive the presentpetition.
5. Execution petition is dismissed as withdrawn with liberty as aforesaid.
6. Learned counsel earlier appearing forPunjLloyd Limited has assisted the Court and placed a judgement in Power Grid Corporation ofIndia Limited V Jyoti Structures Limited OMP(COMM)397/2016 Decided on ii"'December,2017. It is his submission that any proceedings which are CS(OS)444/2014 ^ ^ c meant for the benefit ofthe company can continue,as Section 14(l)(a)only envisages non-continuation ofproceedings "against the corporate debtor Since the suit seeking declaration and injunction, has been filed by the company forthe benefitofthe company,the suitis notliable to be dismissed under Section 14ofthe Insolvency and Bankruptcy Code.
7. The Court has perused thejudgement in Power Grid Corporation of India Limited wherein a Ld. Single Judge of this Court has observed as under:- "10.In the light ofabovepurpose or object behind the moratorium,Section 14ofthe Code would notapply to the proceedings which are in the benefit of the corporate debtor, like the one before this court in as much these proceedings are not a 'debt recovery action' and its conclusion would not endanger, diminish, dissipate or impact the assets of the corporate debtor in any manner whatsoever and hence shall be in sync with thepurpose ofmoratorium which includes keeping the corporate debtor's assets together during the insolvency resolution process and facilitating orderly completion of the process envisagedduring the insolvency resolutionprocess and ensuring the company may continue as a going concern.
14. Henceforfollowing reasonsIconclude thepresent proceeding would not be hit by the embargo ofSection 14(1)(a) viz., (a) 'proceedings' do not mean 'all proceedings';(b) moratorium undersection 14(l)(a)of the code is intended to prohibit debt recovery actions againstthe assets ofcorporate debtor;(c)continuation ofproceedings under section 34 ofthe Arbitration Act which do not result in endangering, diminishing, dissipating or adversely impacting the assets of corporate debtor are not prohibited under section CS(OS)444/2014 Page 4 of[6] IS r 14(1)(a) of the code; (d) term 'including' clarificatory of the scope and ambit of the term 'proceedings (e) the term 'proceeding' would be restricted to the nature ofaction thatfollows it i.e. debt recovery action against assets ofthe corporate debtor; (f) the use of narrower term "against the corporate debtor" in section 14(1)(a) as opposed to the wider phase "by or against the corporate debtor" used in section 33(5) ofthe codefurther makes it evident that section 14(1) (a)is intended to have restrictive meaning and applicability; (g) the Arbitration Act draws a distinction between proceedings under section 34(i.e. objections to the award)and under section 36(i.e. the enforceability and execution of the award). The proceedings under section 34 are a step prior to the execution of an award. Only after determination of objections under section 34, theparty may move a step forward to execute such award and in case the objections are settled against the corporate debtor, its enforceability against the corporate debtor then certainly shall be covered by moratorium ofsection 14(l)(a)."
8. In view ofthe ratio ofthe above saidjudgement,the suitfiled by Punj Lloyd Limited would not be liable to be dismissed at this stage subject to hearing the IRP.
9. Accordingly, issue notice to Mr. Gaurav Gupta, the Interim Resolution Professional,for appearance,whose contact details are as under:-
10. 203, Savitri Complex- 1, Near Dholewal Chowk, Ludhiana,Punjab-141003.
11. Email:-gauravinduca@gmail.com,
12. Mobile:9814918377.
13. Learned counsel who was appearing earlier for PunjLloyd Limited is CS(OS)444/2014 ^ ^ permitted to inform the IRP abouttoday's order. The Company shall duly be represented by the IRP or anyone authorised for or on his behalf. Notice is made returnable on 28"^ May,2019.
PRATHIBA M.SINGH,J. ^ARCH26,2019 MR