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2020 DIGILAW 35 (CAL)

Amit Ranjan Mukherjee v. State Bank Of India

2020-01-09

DEBANGSU BASAK

body2020
JUDGMENT Debangsu Basak, J. - This is an application at the behest of the defendant nos.5 to 8 in the suit. Such defendants seek dismissal of the suit on the ground that the cause of action of the suit is barred under the provisions of the Insolvency and Bankruptcy Code, 2016. 2. Learned advocate appearing for the defendant nos.5 to 8 submits that, a proceeding under the Insolvency and Bankruptcy Code, 2016 was initiated before the National Company Law Tribunal, Kolkata in respect of the defendant no.9. In such proceedings, the defendant no.5 was appointed as the Insolvency Resolution Professional. The defendant no.6 is the insolvency professional entity of which the defendant nos.7 and 8 are the partners. She submits that, in view of the provisions of Sections 63 and 231 of the Code, 2016, the suit is not maintainable. She points out that the plaintiff was never present when the application was taken up for consideration on previous dates. She also points out that, an appeal carried from an order refusing to grant interim relief to the plaintiff was dismissed for default on January 6, 2020. 3. There are nine defendants in the suit. The first two defendants are State Bank of India. The third and fourth defendants are officers of the State Bank of India. The fifth defendant is the Insolvency Resolution Professional appointed by the National Company Law Tribunal in the insolvency proceedings initiated against the defendant no.9. The sixth defendant is the legal entity to which the fifth defendant belongs. The seventh and eighth defendants are the partners of the sixth defendant. 4. In the plaint, the plaintiff claims to be a director and a shareholder of the defendant no.9. The plaintiff alleges that, the plaintiff obtained credit facilities from the State Bank of India. The plaint contains grievances of the plaintiff against the defendant nos.5 to 8 in their functioning as insolvency professional appointed by the National Company Law Tribunal. The plaintiff seeks declaration and injunction as also damages. The plaintiff seeks a declaration that, the bank was negligent in protecting the interest of the plaintiff. The negligence of the Bank is in relation to the insolvency proceeding. The plaintiff also seeks a declaration that, advertisements issued by the insolvency professional damaged the business opportunities of the plaintiff and, therefore, the defendants are jointly and severally liable to compensate the plaintiff for the damages suffered. The negligence of the Bank is in relation to the insolvency proceeding. The plaintiff also seeks a declaration that, advertisements issued by the insolvency professional damaged the business opportunities of the plaintiff and, therefore, the defendants are jointly and severally liable to compensate the plaintiff for the damages suffered. 5. As noted above, the defendant no.9 was before the National Company Law Tribunal, Kolkata in respect of an insolvency proceeding initiated against it under Section 7 of the Code, 2016. In such proceeding, the defendant no.5 was appointed as the Insolvency Professional. The Insolvency Professional took steps under the Code of 2016. The plaintiff, again as noted above, claims to be a principal shareholder and the director of the defendant no.9 which was facing the insolvency proceeding. The suit was filed subsequent to the commencement of the insolvency proceeding and after the appointment of the insolvency professional. 6. Learned advocate appearing for the defendant nos.5 to 8 submits that, the National Company Law Tribunal, Kolkata passed an order for winding up of the defendant no.9 subsequently. The insolvency professional and on the passing of the order of winding up, the Liquidator, did not find any asset of the defendant no.9 excepting a vehicle, which the plaintiff is using. 7. Sections 63 and 231 of the Code of 2016 are as follows: "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. Civil court not to have jurisdiction." "231. Bar of jurisdiction No civil court shall have jurisdiction in respect of any matter in which the Adjudicating Authority or the Board is empowered by, or under, this Code to pass any order and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any order passed by such Adjudicating Authority under this Code." 8. The Code of 2016 is divided into five parts. Section 63 comes under Part-2 Chapter-VI prescribing Adjudicating Authority for corporate persons. Part-2 of the Code of 2016 deals with the insolvency resolution and liquidation for corporate persons. Section 231 is in Part5 dealing with the miscellaneous provisions. The Code of 2016 is divided into five parts. Section 63 comes under Part-2 Chapter-VI prescribing Adjudicating Authority for corporate persons. Part-2 of the Code of 2016 deals with the insolvency resolution and liquidation for corporate persons. Section 231 is in Part5 dealing with the miscellaneous provisions. Section 63 of the Code of 2016 bars Courts from having the jurisdiction over any matter on which the National Company Law Tribunal or the National Company Law Appellate Tribunal has jurisdiction under the Code of 2016. Insolvency of a corporate person is within the jurisdiction of the National Company Law Tribunal. The defendant no.9 was facing such insolvency proceeding at the time when the suit was filed. The parties to the suit are bound by the orders passed by the National Company Law Tribunal in the proceedings before the National Company Law Tribunal. The proceeding or the orders passed in such proceedings cannot be called into question by filing a separate suit in view of Section 63 of the Code of 2016. 9. The Code of 2016 deals not only with corporate entities but also with individuals. Therefore, Section 231 of the Code of 2016 takes into account a situation where the proceeding may be pending under the Code of 2016 against an individual also. Section 231 of the Code of 2016 is in Part-5 dealing with miscellaneous matters. Section 231 encompasses both a situation where there is an insolvency proceeding against a corporate entity as also against a person who is not a corporate entity. Section 231 of the Code of 2016 also prescribes a bar on the Civil Courts to assume jurisdiction in respect of any matter in which, the Adjudicating Authority or the Board is empowered by or under the Code of 2016 to pass any order. 10. In view of the provisions of Sections 63 and 231 of the Code of 2016, the instant suit is barred by law. Therefore, the defendant nos. 5 to 8 are entitled to the reliefs as prayed for. 11. Cs 219 of 2018 is dismissed. 12. Ga 67 of 2019 is disposed of without any order as to costs. 13. In view of the dismissal of the suit, no further relief need be granted to the defendant nos. 1 and 4 in their application for rejection of the plaint. GA 866 of 2019 is also disposed of.