Analysis of Delhi High Court Judgement in Liberty House Group PTE Ltd. vs. State Bank Of India & Ors.

No Civil Court shall have jurisdiction to entertain any suit or proceedings in respect of any matter on which National Company Law Tribunal has jurisdiction under IBC Code.

Section 60(5)(c) of the Code provides that, “Notwithstanding anything to the contrary contained in any other law for the time being in force, the National Company Law Tribunal shall have jurisdiction to entertain or dispose of any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under the Code”. The questions raised in these lis, have clearly arisen out of our in relation to the insolvency resolution of Castex Ltd. and ARGL Ltd. being corporate debtors. Once it is so, Section 63 of the Code provides, “No civil court……shall have jurisdiction to entertain any suit or proceedings in respect of any matter on which National Company Law Tribunal……. has jurisdiction under this Code”. Since the questions raised in these suits arise out of or in relation to insolvency resolution and the NCLT has jurisdiction to entertain the same. The jurisdiction of this Court will also be barred by Section 231 of the Code which provides that “No civil court shall have jurisdiction in respect of any matter in which the Adjudicating Authority is empowered, by or under, this Code to pass any order…….”. The jurisdiction of this Court is thus expressly barred over the subject matter of these suits, by aforesaid provisions of the Code.

Section 231 of the Code, also provides that “……. no injunction shall be granted by any court………..in respect of any action taken or to be taken in pursuance of any order passed by such Adjudicating Authority ….. under this Code”. The injunction sought by the plaintiff in these suits is clearly in respect of action to be taken by NCLT under the jurisdiction vested in it under Section 60(5)(C) supra and barred by this part of Section 231 of the Code. Thus I hold this Court as the Civil Court of Original Jurisdiction to be not having jurisdiction to entertain the dispute subject matter of the present suits. Resultantly, the plaints in the suits are liable to be rejected.

Judgement link : https://ibbi.gov.in//webadmin/pdf/order/2019/Feb/In%20the%20matter%20of%20Liberty%20House%20Group%20PTE%20Ltd%20Vs%20State%20Bank%20of%20India%20CS%20(Comm)%201246-2018%20and%20IAs%20No.%2016056-2018%20and%2016060-2018%20AND%20CS%20(Comm)%201247-2018%20and%20IAs%20No.16061-2018%20and%2016065-2018_2019-02-22%2020:51:37.pdf