Canara Bnak Vs Deccan Chronicle Holdings Limited (Company Appeal (AT) (Insolvency) No. 147 of 2017) - Synopsis
Team SoOLEGAL 6 Nov 2020

In this particular case, Canara Bank Vs Deccan Chronicle Holdings Limited (Company Appeal (AT) (Insolvency) No. 147 of 2017), the appellant-financial creditor, Canara Bank, challenged the contested order of the National Corporate Law Tribunal, Hyderabad Bench, which passed a moratorium order, thereby approving an appeal preferred by the appellant pursuant to Section 7 of the Insolvency and Bankruptcy Code, barring the establishment of suits or the continuation of the cases or proceedings pending.
The appellant's attorney claimed that the Adjudicating Authority could not exclude any court from the scope of the moratorium for the purpose of recovering the amount or executing any judgement or decree, including, where appropriate, proceedings pending before the High Courts and the Supreme Court of India against the 'corporate debtor'. When adjudicating the case, NCLAT was of the view that Section 14 applies to the 'moratorium' that the Adjudicating Authority is expected to announce at the time of approval of the 'corporate insolvency resolution' application. It was evident from Section 14(1)(a) that the institution of prosecution or continuity of ongoing litigation or proceedings against the corporate debtor, including the implementation of any judgement, ruling, or order by any judge, tribunal, arbitration panel, or other entity, fell within the scope of the "moratorium" and also the clause did not expressly preclude any court, including the Hon'ble High Courts or Supreme Court of India.
The NCLAT while rejecting the petition held that, according to Article 32 of the Constitution of India, the Hon'ble Supreme Court has jurisdiction, and under Article 226 of the Constitution of India, the High Court has jurisdiction which cannot be limited by any clause of an Act or a Court. In view of the above clause of rule, it is plain that 'moratorium' shall not affect any suit or case which is pending before the Supreme Court of India pursuant to Article 32 of the Constitution of India or pursuant to Article 136 of the Constitution of India. The jurisdiction of the High Court under Article 226 of the Constitution of India would also not be impaired by the moratorium. 


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