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The Delhi High Court, while deciding on a suit between SSMP Industries (Plaintiffs) and Perken Food Industries Private Limited for recovery of Rs. 1,61,47,336.44, held that moratorium under section 14 of the Insolvency and Bankruptcy Code will not bar trial of suit by corporate debtor and a counter claim. The Court also said as follows:
“The proceedings before NCLT are summary in nature and the RP does not conduct a trial. The RP merely determines what payments can be made towards the claims raised, subject to availability of funds. The NCLT/RP cannot be burdened with the task of entertaining claims of the Defendant which are completely uncertain, undetermined and unknown. Moreover, the question as to whether the Defendant is in fact entitled to any amounts, if determined by the NCLT, prior to the adjudication of the plaintiff’s claim for recovery, would result in the possibility of conflicting views in respect of the same transactions.
Under these circumstances, this court is of the opinion that the Plaintiff’s and the defendant’s claim ought to be adjudicated comprehensively by the same forum. At this point, till the defence is adjudicated, there is no threat to the assets of the corporate debtor and the continuation of the counter claim would not adversely impact the assets of the corporate debtor. Once the counter claims are adjudicated and the amount to be paid/ recovered is determined, at that stage, or in execution proceedings, depending upon the situation prevalent, Section 14 can be triggered. At this stage, due to the reasons set out above, the counter claim does not deserve to be stayed under section 14 of the Code.”
Deciding the case between SSMP Industries (Plaintiffs) and Perken Food Industries Private Limited, where the Plaintiff sued for recovery ofRs. 1, 61, 47,336.44, but the defendant counter-claimed in the suit for Rs. 59, 51, 548, Justice Pratibha Singh held that all proceeding against the corporate debtor are not barred by section 14 moratorium.
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