IN THE NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH
Ashok Kumar Dewan (Resolution Professional)
vs.
The Development Commissioner Office of the Development Commissioner, SEEPZ – Special Economic Zone,
MA No.2642 of 2019 in C.P. (IB) No. 1687/MB/2018
Application under Section 14 r/w Sections 17, 18, 20 & 238 of the Insolvency and Bankruptcy Code, 2016 and r/w Rule 11 of National Company Law Tribunal Rules, 2016)
Date of Order: 19.05.2021
FACTS
1) NCLT vide order dated 31.01.2019 admitted petition against the corporate debtor Max Mobile Communications Ltd. Applicant was appointed as the IRP and subsequently as the RP by the COC in their 1st meeting. CD was in arrears of the premises in SEZ area to the tune of ₹. 38,35,552.94. Respondent issued notice on 23.09.2015 as to show cause why an order of eviction shall not be passed for the reasons recorded therein, including payment of outstanding dues. Respondent issued another notice.
2) Respondent took no step till 05.09.2017 & assessed that the Corporate Debtor was in arrears of ₹. 2,98,37,311. The Respondent on 11.02.2019 issued a notice u/s 11(2) of the Foreign Trade (Development and Regulations) Act, 1992 (the Foreign Trade Act) to the Corporate Debtor indicating various violations by the Corporate Debtor to show cause within 15 days as to why penal action shall not be taken for non-compliance of various notices and non-payment of dues and duty.
3) Applicant replied to the notice on 12.06.2019 inter-alia indicating that the Corporate Debtor had gone into CIRP on 31.01.2019 and no proceedings against the Corporate Debtor can be taken up. The Respondent in the meantime had attached various machineries and office equipment of the Corporate Debtor.
ARGUMENTS
For Applicant | For Respondent |
The applicant submitted that since CIRP proceedings are initiated and moratorium under sec 14 of the code is in force, no action can be taken against the Corporate Debtor. | 1) Respondent in its reply submitted that the action initiated by him was much prior to the commencement of the CIRP process. 2) Since the notice dated 11.02.2019 was issued prior to the Respondent becoming aware of the commencement of the CIRP, the action would not amount to the contravention of the moratorium. |
DECISION
Neither the proceedings for recovery of the dues nor the proceedings for recovery of possession of the allotted premises can be allowed to continue or any proposed action in that regard can be sustained during the currency of the CIRP
RATIONALE
1) NCLT while relying on Sec 238 of the Code held that the provisions of the Code would come into operation notwithstanding anything inconsistent therewith contained in any other law and such law shall cease to have any effect till such time the provisions of the Code remain applicable.
2) All the dues claimed under the show cause notices and the consolidated notice dated 11.02.2019 admittedly relate to a period preceding the declaration of CIRP. The claims raised by the Applicant essentially are operational debts as provided u/s 5(21) of the Code and those have to be worked out within the parameters of the provisions contained in the Code and the relevant Regulations.
3) The Same thing would also apply to the recovery of the property in possession of the Corporate Debtor in terms of section 14(1)(d) of the Code.
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About the Author: The summary of this Order has been composed by Mr. Shikhar Pandey (Research Associate-IBC Law Reporter).
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