Tejinder Pal Setia vs. Kone Elevators India Pvt. Ltd. & Anr. (Neutral Citation: 2023:DHC:9038) - (High Court of Delhi) (15 Dec 2023)

Jurisdiction vested in NCLT while dealing with a resolution plan is wide and any question of law or fact in relation to the insolvency resolution has to be determined by the NCLT

MANU/DE/8473/2023

Insolvency

The subject matter of the present suit is an assignment deed dated 3rd February, 2023, which is stated to have been executed between the Defendant no.1 and Defendant no.2, whereby the Defendant no.1 has assigned the debt owed to it by COPL, to Defendant no.2 i.e., Mr. Sanjeev Chadha.

The Plaintiff, by means of the present suit has sought that the said assignment deed dated 3rd February, 2023 be declared as invalid and non-est in law and thus, not binding upon the Plaintiff. The Plaintiff has also prayed that, Defendant no.1 be directed to produce books of accounts with respect to COPL, depicting the amount due as per the terms of a settlement agreement dated 27th September, 2021 stated to have been executed between the Plaintiff and defendant no.1.

It is evident from the judgment and order that the settlement efforts made by the plaintiff have all come to a nought and the same has been pronounced upon in the proceedings before NCLT/ NCLAT. Vide order passed by the NCLAT, which was subsequently upheld by the Supreme Court, it has been held that since the cheques given by the Plaintiff in terms of the settlement agreement dated 27th September, 2021 were dishonoured, the settlement agreement was breached, and that therefore ―The Settlement Agreement having breached, the Appellant cannot insist to accept the Settlement Agreement at this stage.

Present Court has no territorial jurisdiction to entertain the prayers of the Plaintiff with respect to the assignment deed dated 3rd February, 2023, which is the fulcrum of the present suit. The contention of the plaintiff that it became aware of the assignment deed when it was filed as a document before the NCLAT, would not confer any jurisdiction for the purpose of Section 20 of the Code of Civil Procedure, 1908 (CPC).

Sections 63 and 231 IBC create a bar on the jurisdiction of the civil court in respect of any matter in which the NCLT and NCLAT has jurisdiction under the IBC and the adjudicating authority under the Code is competent to pass any order. Further, clause (c) sub-Section (5) of Section 60 of the IBC vests the jurisdiction in NCLT to entertain and dispose of any question of priorities or any question of law or fact, arising out of or in relation to the insolvency resolution for liquidation proceedings. Therefore, the jurisdiction vested in NCLT while dealing with a resolution plan is of wide ambit and any question of law or fact in relation to the insolvency resolution has to be determined by the NCLT.

Ex-facie, the controversy sought to be raised in the present suit is a subject matter of proceedings before the NCLT/NCLAT. The bar under Section 60 and Section 231 would squarely apply to the present suit. In the circumstances, the plaint is returned, with liberty to the plaintiff to take appropriate remedies as may be available to him under law.

Tags : JURISDICTION PROVISION BAR