Ksk Mahanadi Power Company Limited Vs Bijulmati Gond

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2024:CGHC:43900

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NAFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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WP227 No. 15 of 2022

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1 - KSK Mahanadi Power Company Limited Through Its Authorized Signatory, Registered OfÏce At 8-2-298/82/A/431/A, Road No. 22, Jubilee Hills, Hyderabad 500033 and having its works Station Village -Nariyara, Tehsil Akaltara, District Janjgir Champa, Chhattisgarh.

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... Petitioners

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versus

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1 - Bijulmati Gond , W/o Late Panchuram, Age 48 Years, R/o Village Nariyara, Tehsil Akaltara, District Janjgir Champa Chhattisgarh.

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2 - State Of Chhattisgarh Through Collector, Janjgir

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... Respondents

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Digitally signed by SHYNA AJAY Date: 2024.11.14 13:26:01 +0530

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For Petitioner : Mr. Saurabh Sahu, Advocate For Respondent : None No.1 For State Mr. SK Puria, Panel Lawyer

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Mr. SK Puria, Panel Lawyer

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SB.: Hon'ble Mr. Justice Deepak Kumar Tiwari

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O rder on Board

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12/11/2024

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This petition has been filed under Article 227 of the Constitution of India challenging the order dated 7.8.2021 passed by the Civil Judge Class-I, , Akaltara, District Janjgir-Champa in Civil Suit No.13A/2015, whereby, the trial Court notwithstanding the prohibitory order passed by the National Company Law Tribunal at Hyderabad (NCLT) under Sections 13 and 14 of the Insolvency and Bankruptcy Code, 2016 (in short “the Code”), dismissed the application filed by the petitioner under Section 151 of the CPC seeking continuation of stay in a proceeding in view of the moratorium imposed under Section 14 of the Code and the order passed by the NCLT on 3.10.2019.

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Learned counsel for the petitioner would submit that respondent No.1 has filed a Civil Suit for declaration of title, permanent injunction in respect of the suit property bearing Khasra No.1247/58 admeasuring 0.25 acre. In the said suit, the Petitioner-Company has filed the written statement and disputed the fact that the plaintiff/respondent No.1 is the mother of Mr. Jaipal Singh. During pendency of such suit, one of the Financial Creditor - Power Finance Corporation Limited filed an application before the NCLT under Section 7 of the Code bearing CP(IB) No.492/07/HDB/2019 for initiation of corporate insolvency resolution process. In the said case, NCLT by the order dated 3.10.2019 passed an order in terms of Sections 13 and 14 of the Code and the said order is still in force. He submits that the trial Court has wrongly applied the ratio laid down in

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Asian Resurfacing of Road Agency Private Limited and Another Vs. Central Bureau of Investigation, (2018) 16 SCC 299, which is also overruled in the matter of High Court Bar Association, Allahabad Vs. State of Uttar Pradesh and others, (2024) 6 SCC 267 , in the present matter. Hence, in view of the above, the impugned order is not sustainable. Lastly, he submits that this petition may be disposed of directing the concerned trial Court to decide the subject application filed under Section 151 of the CPC afresh.

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Heard learned counsel for the parties and also perused the documents annexed with the petition.

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It is evident that the trial Court has passed the impugned order in view of the judgment laid down in the matter of Asian Resurfacing of Road Agency Private Limited (supra) , wherein, a direction was given that the trial courts may, on expiry of six months, resume the proceedings without waiting for any other intimation unless express order extending stay is produced.

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In High Court Bar Association, Allahabad (supra) , it was observed that direction issued in Asian Resurfacing of Road Agency Private Limited (supra) , is directory in nature rather than mandatory. The following was held in para 53 to 57 :

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“53 . It is well recognised that no one can be made to suffer on account of any mistake or fault of the Court which means that even delay on part of the Court in deciding the proceedings or any application therein would not be detrimental to any of the parties to the litigation much less to the party in whose favour an interim stay order is passed.

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54 . It is settled in law that grant of interim stay order ought to be ordinarily by a speaking order and therefore as a necessary corollary, a stay order once granted cannot be vacated otherwise than by a speaking order, more so, when its extension also requires reasons to be recorded.

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55 . It is noticeable that under Article 226(3) of the Constitution of India, the automatic vacation of the stay order envisages making of an application to the High Court for the vacation of the interim stay order. Therefore, filing of an application for vacating the stay order is a sine qua non for triggering the automatic vacation of the stay order under Article 226(3) if such an application is not decided within the time prescribed of two weeks.

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56 . In other words, applying the above analogy or principle, the stay order granted in any proceedings would not automatically stand vacated on the expiry of a particular period until and unless an application to that effect has been filed by the other side and is decided following the principles of natural justice by a speaking order.

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57 . Sometimes, in quest of justice we end up doing injustice. Asian Resurfacing [(2018) 16 SCC 299] is a clear example of the same. Such a situation created ought to be avoided in the normal course or if at all it arises be remedied at the earliest. In doing so, we have to adopt a practical and a more pragmatic approach rather than a technical one which may create more problems burdening the courts with superfluous or useless work. It is well said that useless work drives out the useful work. Accordingly, it is expedient in the interest of justice to provide that a reasoned stay order once granted in any civil or criminal proceedings, if not specified to be time bound, would remain in operation till the decision of the main matter or until and unless an application is moved for its vacation and a speaking order is passed adhering to the principles of natural justice either extending, modifying, varying or vacating the same.”

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Apart from that, Section 14(a) of the Code, 2016, prohibits the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority. For the sake of brevity, the said Section is reproduced below :

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14. Moratorium. (1) Subject to provisions of sub-sections (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:-

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(a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;

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Taking into consideration the aforesaid legal propositions, and considering that the trial Court has not considered the effect of Section 14 of the Code 2016 and also considering that the stay order passed by the NCLT is still in force and further considering the principle laid down in the matter of Asian Resurfacing of Road Agency Private Limited (supra) that the direction issued in the said case is directory in nature rather than mandatory, this Court deems it appropriate to direct the trial Court to decide the application filed by the petitioner under Section 151 of the CPC for continuation of stay afresh. Ordered accordingly.

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With the aforesaid observations, the Petition is disposed of. The concerned Court is directed to decide the said application within a period of 90 days after receipt of a copy of this order.

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Sd/-

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(Deepak Kumar Tiwari) Judge

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Shyna

Ksk Mahanadi Power Company Limited v. Bijulmati Gond

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Ksk Mahanadi Power Company Limited v. Bijulmati Gond

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