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As per case facts, the Petitioner filed a Summary Suit in City Civil Court for recovery of unpaid salaries from Respondent No.1. Subsequently, Respondent No.1 underwent liquidation, and a Liquidator
...(Respondent No.2) was appointed. The Petitioner sought to implead the Liquidator in the ongoing suit, but the Trial Court dismissed the Chamber Summons, citing a lack of jurisdiction under the IBC and stating the Petitioner should approach the Liquidator directly. The question arose whether Sections 33(5) and 63 of the IBC prohibit the continuation of pre-existing suits against a corporate debtor in liquidation and the impleadment of the Liquidator. Finally, the High Court ruled that Section 33(5) of the IBC only bars the *institution* of new suits, not the *continuation* of pending ones. It clarified that Section 63 of the IBC does not apply to such pre-liquidation suits, especially for unpaid salary claims which NCLT/NCLAT cannot adjudicate. The court held that if a Liquidator can initiate a suit, they can also defend one. Consequently, the Trial Court's order was set aside, and the impleadment of the Liquidator was allowed.
Bench
Applied Acts & Sections
Section 33
–The Insolvency and Bankruptcy Code, 2016
Section 53
–The Insolvency and Bankruptcy Code, 2016
Section 60
–The Insolvency and Bankruptcy Code, 2016
Section 63
–The Insolvency and Bankruptcy Code, 2016
Section 231
–The Insolvency and Bankruptcy Code, 2016
Legal Notes
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