Allahabad High Court
M/S Jaiprakash Associates Limited vs M/S High Tech Tyre Retreaders Pvt. Ltd. ... on 30 October, 2025
HIGH COURT OF JUDICATURE AT ALLAHABAD
Neutral Citation No. - 2025:AHC:190790-DB
HIGH COURT OF JUDICATURE AT ALLAHABAD
APPEAL UNDER SECTION 37 OF ARBITRATION AND CONCILIATION ACT 1996 No. - 288 of 2025
M/s Jaiprakash Associates Limited
.....Appellant(s)
Versus
M/s High Tech Tyre Retreaders Pvt. Ltd. and another
.....Respondent(s)
Counsel for Appellant(s)
:
Rohan Gupta, Kriti Gupta, Pranay Kumar
Counsel for Respondent(s)
:
H.N. Singh (Sr. Advocate) with Sumit Daga
Chief Justice's Court
HON'BLE ARUN BHANSALI, CHIEF JUSTICE
HON'BLE KSHITIJ SHAILENDRA, J.
1. This appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') is directed against orders dated 13.09.2024, 19.10.2024 and 07.03.2025 passed by Commercial Court, Kanpur Nagar whereby the application filed by the appellant under Section 34 of the Act, has been closed for lack of jurisdiction and the application has been ordered to be returned, on account of passing of order dated 13.09.2024, the bank guarantee produced by the respondents has been ordered to be released and application filed by the appellant seeking correction in the order dated 13.09.2024 and restoration of the application as filed, has been rejected respectively.
2. The application was filed under Section 34 of the Act by the appellant against award dated 04.10.2017 passed by the U.P. State Micro & Small Enterprises Facilitation Council, Kanpur ('the Council'). During pendency of the proceedings under Section 34, an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short 'the Code') was filed by the ICICI Bank before the NCLT seeking initiation of Corporate Insolvency Resolution Process ('CIRP') against the appellant. The NCLT by its order dated 03.06.2024 admitted the application in terms of Section 7(5) of the Code against the appellant and passed certain directions including imposing a moratorium under Sections 13 and 14 of the Code.
3. The appellant filed Application 107Ga before the Commercial Court bringing on record the order dated 03.06.2024 passed by the NCLT. In the application, an assertion was made that no proceedings could be continued in the case against the appellant company and a prayer was made to take the order dated 03.06.2024 on record and pass consequential necessary directions.
4. Before the Commercial Court, on behalf of the respondents, submission was made that on account of the order passed by the NCLT, the matter cannot proceed and therefore, the same be returned.
5. The Commercial Court, after hearing the parties, referred to provisions of Section 14 of the Code and order passed by the NCLT under Sections 13 and 14 of the Code. The Commercial Court also took notice of provisions of Section 33 of the Code providing for bar of instituting suit or legal proceedings by or against the corporate debtor when a liquidation order has been passed and that the proviso to Section 33(5) providing that proceedings can be instituted with the prior approval of the Adjudicating Authority and that no such approval has been produced. The Commercial Court further noticed the bar under Section 63 of the Code barring the jurisdiction of the civil court and came to the conclusion that on account of the order passed by the NCLT and for lack of any approval from the Authorised Authority and the bar created by Section 63 of the Code, the Commercial Court now has no jurisdiction to hear and decide the said application under Section 34 of the Act and purportedly accepting the application filed by the appellant qua lack of jurisdiction, closed the proceedings. It further ordered that the application be returned and the case be consigned to record.
6. Subsequent to passing of the order, on an application made by the respondents, the bank guarantee furnished during pendency of the proceedings was ordered to be released on 19.10.2024. Whereafter, the appellant moved an application seeking correction in the order dated 13.09.2024 and restoration of the application which was dismissed on 07.03.2025.
7. Initially, in the present appeal, an objection was raised pertaining to the maintainability of the appeal under Section 37 of the Act, which objection was overruled on 17.09.2025 and whereafter by order dated 23.09.2025, delay in filing the appeal was condoned.
8. Counsel for the appellant made submissions that the Commercial Court has wrongly read the provisions of Sections 13, 14, 33 and 63 of the Code for the purpose of rejecting the application filed under Section 34 of the Act.
9. Submissions have been made that moratorium under Section 14 of the Code is created in cases filed against the corporate debtor and not by the corporate debtor and on that count alone, the order impugned deserves to be quashed and set aside.
10. Counsel for the appellant pointed out that on account of dismissal of the application under Section 34 of the Act, the bank guarantee submitted by the respondent for the purpose of receiving the amount deposited by the appellant under Section 19 of the Micro, Small and Medium Enterprises Development Act, 2006, has been ordered to be returned to and liquidated by the respondents and, therefore, an order in relation to the same may also be passed.
11. Counsel for the respondents made submissions that on the part of the respondents, no plea of the present nature, in fact, was raised. It was the appellant itself which produced the order passed under Section 7 of the Code and sought consequential order which was passed by the Commercial Court and no exception can be now taken by the appellant.
12. We have considered the submissions made by learned counsel for the parties and have perused the material available on record.
13. Provisions of Sections 14, 33 and 63 of the Code in so far as relevant, inter alia, read as under:-
"14. Moratorium.?(1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:? (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; ............. ..........?" "33. Initiation of liquidation.? ..??. ...??.
(5) Subject to section 52, when a liquidation order has been passed, no suit or other legal proceeding shall be instituted by or against the corporate debtor:
Provided that a suit or other legal proceeding may be instituted by the liquidator, on behalf of the corporate debtor, with the prior approval of the Adjudicating Authority."
"63. Civil court not to have jurisdiction.?No civil court or authority shall have jurisdiction to entertain any suit or proceedings in respect of any matter on which National Company Law Tribunal or the National Company Law Appellate Tribunal has jurisdiction under this Code."
14. A perusal of the above provisions would reveal that under Clause (a) of Section 14 of the Code, a moratorium has been provided qua the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority.
15. The provision is very specific providing for the institution or continuation of suits or proceedings against the corporate debtor and not by the corporate debtor and as such, the said provision has no application to the present case wherein the proceedings under Section 34 of the Act were initiated by the appellant. Reliance placed on Section 33(5) of the Code is ex-facie inapplicable as the said provision only pertains to a case after the initiation of liquidation wherein it has been provided that when a liquidation order is passed, no suit or other legal proceedings shall be instituted by or against the corporate debtor. It is only under those circumstances that the bar has been created and the bar is restricted to the institution of the suit and not the continuation. As such even the said proceeding also has no application.
16. So far as the provisions of Section 63 of the Code are concerned, the same are restricted to cases in respect of any matter on which the NCLT or NCLAT has jurisdiction under the Code. Admittedly, qua an award passed against the corporate debtor, the NCLT and NCLAT has no jurisdiction under the Code and, therefore, the provisions of Section 63 also have no application.
17. In view of above fact situation, the order dated 13.09.2024 passed by the Commercial Court cannot be sustained.
18. So far as the prayer made seeking the respondents to re-submit the bank guarantee is concerned, we do not find any reason for passing the said order. In case the application filed by the appellant under Section 34 of the Act is allowed, the consequences as provided under Section 144 CPC would automatically follow.
19. Consequently, the appeal is allowed. The order dated 13.09.2024 is quashed and set aside. The matter is remanded back to the Commercial Court to hear and decide the application filed by the appellant under Section 34 of the Act on merit.
(Kshitij Shailendra, J) (Arun Bhansali, CJ)
October 30, 2025
SL/AKShukla
