Shempark Public School vs M/S.Edusmart Services(P) Ltd
2023 Latest Caselaw 530 Mad

                                                                                  CRP.No.2303 of 2019

                                   IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                  DATED: 10.01.2023

                                                       CORAM:

                              THE HONOURABLE MR. JUSTICE G.K.ILANTHIRAIYAN

                                               CRP.No.2303 of 2019 and
                                                CMP.No.15011 of 2019

                Shempark Public School,
                Rep. by its Correspondent A.K.P.Mani,
                Morasapatti Post,
                Idappadi Taluk,
                Salem District                                                      ... petitioner
                                                           Vs.
                1.M/s.Edusmart Services(P) Ltd.,
                  Rep.by its Manager K.Bhagavathi Raja,
                  Having registered office at
                  L74, Mahipalpur Extension,
                  New Delhi – 37
                2.M/s.Educomp Solutions Ltd.,
                  Rep. by its Manager K.Bhagavathi Raja,
                  Having its Office at 1211
                  Padma Tower,
                  1-5, Rajendra Place,
                  New Delhi-8                                                ... Respondents

                PRAYER:

                          Civil Revision Petition filed under Section 115 of CPC to set aside the fair

                and decretal order dated 12.03.2019 passed in REA.No.1 of 2019 in REP.No.95 of

                2017 in Arbitration Case No.ARB/JN/418/2014 on the file of the Additional

                District Judge-III, Salem by allowing the application with costs.


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                                                                                   CRP.No.2303 of 2019


                                        For Petitioner   : Mr.M.Premkumar
                                                           for Mr.S.Senthil

                                        For Respondents: Mr.K.B.Vivekanandhan

                                                         ORDER

This civil revision petition has been filed to set aside the fair and

decretal order dated 12.03.2019 passed in REA.No.1 of 2019 in REP.No.95 of

2017 in Arbitration Case No.ARB/JN/418/2014 on the file of the Additional

District Judge-III, Salem, thereby dismissed the petition filed under Section 33(5)

of the Insolvency and Bankruptcy Code 2016.

2. Heard, the learned counsel for the petitioner and the learned counsel

for the respondents.

3. The petitioner is the judgment debtor in the execution petition filed

by the respondents in REP.No.12 of 2019. The respondents filed execution petition

for attachment of movable property as against the petitioner herein. The Execution

Court also passed an order to attach the property by order dated 29.11.2018 and

the process of attachment is pending. While being so, the petitioner filed petition

to dismiss the execution petition on the ground that the National Company Law

Tribunal Principal Bench, New Delhi has ordered the commencement of a

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CRP.No.2303 of 2019

corporate insolvency resolution process for the respondents herein on 30.05.2017

and appointed Dr.Sanjiv Agarwal as its interim resolution professional. Since the

respondents are unable to pay off debts to the creditors, they had produced all the

books of accounts and creditors before the Tribunal. The insolvency

commencement date and estimated date of closure of insolvency resolution

process and the name of address of the interim resolution professional have also

been read in 'Form-A'. The operational creditors, financial creditors, workman of

employee and authorised representative of workmen and employees have also

been directed to go through the interim resolution professional. Therefore, as per

Section 33(5) of the Insolvency and Bankruptcy Code 2016, when a liquidation

order has been passed, no suit or other legal proceedings, shall be instituted by or

against the corporate debtor provided that a suit or other legal proceedings may be

instituted by the liquidators on behalf of the corporate debtor with the prior

approval of the adjudications authorities. Therefore, the respondents cannot

maintain execution petition as against the petitioner. However, the court below

dismissed the application stating that already the execution petition was filed and it

is pending.

4. The learned counsel for the petitioner also relied upon the judgment

in the case of P.Mohanraj and others Vs. Shah Brothers Ispat Private Limited

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CRP.No.2303 of 2019

reported in (2021) 6 SCC 258, wherein the Hon'ble Supreme Court of India held

that once moratorium ordered under Section 14 of Insolvency and Bankruptcy

Code 2016, it would apply even in respect of proceedings initiated under Sections

138 and 141 of NI Act. Further held that Section 32 A(1) includes the liabiliy of

the corporate debtor for all offences committed prior to the commencement of the

corporate insolvency resolution process including offence based upon complaints

under Section 2(d) of Cr.P.C. Thus, Section 138 of NI Act proceedings would be

included, and would, after the moratorium period comes to an end with a

resolution planned by a new management being approved by the adjudicating

authority, cease to be an offence qua the corporate debtor. Admittedly, the

respondents filed application under Section 10 before the National Company Law

Tribunal Principal Bench, New Delhi in CP.No.(IB)-101(PB)/2017). By order

dated 30.05.2017, one Dr.Sanjiv Agarwal was appointed as interim resolution

proessional. He shall be bound by all the statutory provisions of the Insolvency

and Bankruptcy Code 2016 and the Code of Conduct devised by the Insolvency

and Bankruptcy Code. He will perform his function and duties strictly in

accordance with the provisions of the Insolvency and Bankruptcy Code and the

rules framed thereunder. Therefore, the respondents cannot maintain execution

petition as against the petitioner herein.

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CRP.No.2303 of 2019

5. The interim resolution professional can institute proceedings as

against the petitioner, that too after approval of adjudicating authority. Once

moratorium order which was passed by the National Company Law Tribunal is in

force and as such it is in operation, Corporate Insolvency Resolution process

against the decree holder, the decree holder can neither initiate nor continue with

the execution proceedings.

6. In view of the above, the fair and decretal order dated 12.03.2019

passed in REA.No.1 of 2019 in REP.No.95 of 2017 in Arbitration Case

No.ARB/JN/418/2014 on the file of the Additional District Judge-III, Salem are

set aside and this civil revision petition is allowed. Accordingly, the execution

petition in REP.No.95 of 2017 in Arbitration Case No.ARB/JN/418/2014 on the

file of the Additional District Judge-III, Salem is hereby dismissed. Consequently,

connected miscellaneous petition is closed. There shall be no order as to costs.

10.01.2023 Speaking/non-speaking Index : Yes/No Internet : Yes lok

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CRP.No.2303 of 2019

G.K.ILANTHIRAIYAN, J.

lok

To

1.The Additional District Judge-III, Salem

2.A.K.P.Mani, Correspondent, Shempark Public School, Morasapatti Post, Idappadi Taluk, Salem District

3.K.Bhagavathi Raja, Manager, M/s.Edusmart Services(P) Ltd., Having registered office at L74, Mahipalpur Extension, New Delhi – 37

4.K.Bhagavathi Raja, Manager, M/s.Educomp Solutions Ltd., Having its Office at 1211 Padma Tower, 1-5, Rajendra Place, New Delhi-8

CRP.No.2303 of 2019

10.01.2023

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