NISHANT
When can a Corporate Debtor, against whom morotorium under IBC was passed, file suit or legal proceedings for recovery of money.
NISHANT MEHROTRA 14 Oct 2019

When can a Corporate Debtor, against whom morotorium under IBC was passed, file suit or legal proceedings for recovery of money.

NCLAT - When can a Corporate Debtor, against whom morotorium under IBC was passed, file suit or legal proceedings for recovery of money.

Held :: From clause (d) of Section 11, it is clear that a ‘Corporate Debtor’ in respect of whom a liquidation order has been made is not entitled to make application to initiate ‘Corporate Insolvency Resolution Process’ under Chapter II. That means, it cannot file any application under Sections 7 or 9 of the I&B Code. Therefore, no application under Chapter II can be filed by the ‘Corporate Debtor’, which is under Liquidation of which the Appellant is Liquidator. In so far as, sub-section (5) of Section 33 is concerned, it is subject to Section 52. Section 52 relates to right of secured creditor in liquidation proceedings. However, in case where matter does not relate to any secured asset and recovery of any money by the ‘Corporate Debtor’, which is not under Liquidation, a suit or other legal proceedings may be instituted by the Liquidator on behalf of the ‘Corporate Debtor’, but not an application under Section 9 of the I&B Code.

Case:
Abhay N. Manudhane Vs. Gupta Coal India Pvt. Ltd.

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