1

IN THE HIGH COURT AT CALCUTTA

CIVIL APPELLATE JURISDICTION

COMMERCIAL DIVISION

Present:

The Hon’ble Justice Debangsu Basak

And

The Hon’ble Justice Md. Shabbar Rashidi

AD-COM 2 OF 2026

With

IA No.: CAN 1 of 2026

Sri Vineet Mohan Gupta & Anr.

Vs.

Canara Bank & Ors.

For the Appellants : Mr. Chayan Gupta, Adv.

Mr. Shounak Mukhopadhyay , Adv.

Mr. Tanay Agarwal, Adv.

Mr. Shivam Bhimsaria, Adv.

Ms. Akansha Singhania, Adv.

For Respondent : Mr. Supriyo Mahapatra, Adv.

Nos 1 & 7 Mr. Kishwar Rahman, Adv.

Hearing Concluded on : June 12, 2026

Judgment on : July 2, 2026

DEBANGSU BASAK, J.: -

1. Plaintiffs in Title Suit Com 110/2024 filed before the

Commercial Court at Rajarhat, North 24 Parganas have preferred the

present appeal against the order dated February 19, 2026 dismissing

2

the suit under Order VII Rule 11(d) of the Code of Civil Procedure,

1908.

2. By the impugned order, learned Judge has dismissed the suit

of the appellants on the ground that, the suit was barred under

Section 95 of the Insolvency and Bankruptcy Code, 2016.

3. Learned Advocate appearing for the appellants has contended

that, learned Judge took into consideration subsequent events for

the purpose of invoking Order VII Rule 11(d) of the Code of Civil

Procedure, 1908. He has referred to Sections 63 and 231 of the

Insolvency and Bankruptcy Code, 2016. He has also referred to

Sections 95 and 96 thereof. He has contended that, the proceedings

under Section 95 of the Insolvency and Bankruptcy Code, 2016 were

initiated subsequent to the filing of the suit.

4. Learned Advocate appearing for the appellants has contended

that, under Section 95 of the Insolvency and Bankruptcy Code,

2016, the appellants have the right to defend such proceedings only.

He has pointed out that, the provisions of the Insolven cy and

Bankruptcy Code, 2016 do not permit the appellants to make any

counter claim. Under Section 96 of the Insolvency and Bankruptcy

Code, 2016, the moratorium for the period from the date of filing of

the application under Section 95 till the admission thereto comes

3

into operation. On the aspect of jurisdiction of the National Company

Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code,

2016 learned Advocate for the appellants has relied upon 2020 (13)

SCC 308 (Embassy Property Developments Private Limited Vs.

State of Karnataka and Others ), 2021 (7) SCC 209 (Gujarat Urja

Vikas Nigam Ltd. Vs. Amit Gupta ) and (2023) SCC OnLine Bom

33 (Rajendra Prasad Bansal, In Re Reliance Comm. Ltd. Vs.

Rajendra P. Bansal).

5. Learned Advocate appearing for the appellants has contended

that, the embargo under Sections 63 and 231 of the Insolvency and

Bankruptcy Code, 2016 are akin to Section 18 of the Recovery of

Debts and Bankruptcy Act, 1993. He has relied upon 2023 (1) SCC

1 (Bank of Rajasthan Limited Vs. VCK Share and Stock Broking

Services Limited) in support of such contention.

6. Learned Advocate appearing for the appellants has referred to

the prayers made in the plaint and the averments therein. He has

contended that, the declaratory reliefs that the appellants sought for

in the plaint are to be granted by Civil Courts only. He has relied

upon Section 34, 38 and 39 of the Specific Relief Act, 1963 in this

regard.

4

7. Learned Advocate appearing for the appellants has contended

that, the bar to filing and maintaining civil suit is to be strictly

construed. He has relied upon 2019 SCC OnLine SC 2299 (Escorts

Heart Institute and Research Centre Ltd. Vs. Delhi Development

Authority and Others), 1981 SCC OnLine Del 140 (M/s. Oriental

Building and Furnishing co. Ltd. Vs. Union of India) , 2012 (1)

Mah L.J. 687 (United India Insurance Co. Ltd. Vs. Vulcan

Association and Others) and 2007 SCC OnLine Cal 359 (ESAB

India Limited Vs. Board of Trustees for the Port of Kolkata &

Ors.) in support of such contention.

8. Learned Advocate appearing for the appellants has contended

that, the averments made in the plaint are required to be considered

as true and correct under Order VII Rule 11 of the Code of Civil

Procedure, 1908. Maintainability of the suit has to be determined on

the date of its presentation. Subsequent events cannot be taken into

consideration. He has relied upon AIR 2020 Cal 136 (Pyari Devi

Chabiraj Steels Pvt. Ltd. Vs. Axis Bank Limited) in support of the

contention that, the suit is maintainable.

9. Learned Advocate appearing for the appellants has contended

that while considering the rejection of the plaint, only the averments

made therein and the documents filed with the plaint are to be

5

considered. He has relied upon 2025 SCC OnLine SC 2240 (Karam

Singh Vs. Amarjit Singh & Ors.), 2003 (1) SCC 557 (Saleem Bhai

and ors Vs. State of Maharashtra and Ors) , 1999 SCC OnLine

Del 744 (Manohar Lal Chatrath & Anr Vs. Municipal

Corporation of Delhi) and 2025 SCC OnLine SC 975 (P.

Kumarakurubaran Vs. P. Narayanan and Ors.) in support of such

contention.

10. Learned Advocate appearing for the respondent nos. 1 and 7

has contended that, the respondent no. 1 as the lead bank er of

Consortium of Banks, lent and advanced various credit facilities to a

company. Appellants had issued personal guarantees for repayment

of such credit facilities.

11. Learned Advocate appearing for the respondent nos. 1 and 7

has contended that, the respondent no. 1 issued a demand notice

dated November 17, 2023 recalling the credit facilities. The

appellants had assailed such demand notice before the Orissa High

Court by way of a writ petition being WP(C) 41170 of 2023. He has

referred to the order dated August 22, 2024 passed by the Orissa

High Court in such writ petition. He has contended that, the suit

was filed by the appellants subsequent thereto.

6

12. Learned Advocate appearing for the respondent nos. 1 and 7

has contended that, the claim of the appellants before the Civil Court

was barred on the principles of res judicata. He has contended that

the appellants are bound by the order dated August 22, 2024 passed

by the Orissa High Court.

13. Learned Advocate appearing for the respondent nos. 1 and 7

has relied upon Section 129 of the Contract Act, 1872. He has

however, contended that, no document releasing the personal

guarantees of the appellants was executed by all the members of the

consortium. He has relied upon (2021) 224 Comp Case 416 (Gouri

Shankar Jain Vs. Punjab National Bank ), 2006 (11) SCC 506

(Syndicate Bank Vs. Channaveerappa Beleri) and 2010 (12) SCC

458 (H.R. Basavaraj Vs. Canara Bank) to indicate the law on

continuing guarantees under Section 129 of the Indian Contract Act,

1872.

14. Learned Advocate appearing for the respondent no. 1 and 7

has relied upon 2024 (5) SCC 435 (Dilip B. Jiwarajka Vs. Union

of India & Ors.) and (2024) 252 Company Cases 499 (Vineet

Saraf Vs. Rural Electrification Corporation Ltd.) in support of

his contentions regarding the scope and ambit of proceedings under

the Insolvency and Bankruptcy Code, 2016.

7

15. Learned Advocate appearing for respondent no. 1 and 7 has

contended that the civil court has no jurisdiction by virtue of

Insolvency and Bankruptcy Code, 2016, being a special legislation

and complete code. He has relied upon 2026 SCC OnLine Del 7

(Roseland Buildtech (P) Ltd Vs. Vihaan 43 Reality (P) Ltd.), 2025

257 Company Cases 344 (Mohammed Enterprises (Tanzania)

Ltd Vs. Farooq Ali Khan and Ors .), Civil Revision Petition No.

872 of 2024 (Kennigton Industries Pvt Ltd & Ors Vs. Spads

Textiles Limited), 2025 SCC OnLine Ker 5688 (Vysali

Pharmaceuticals Limited & Anr. Vs. T. Beena & ors.) and 2025

SCC OnLine Bom 2799 (Mohato Industries Ltd. Vs. Vibha) in

support of his contentions.

16. Learned Advocate appearing for the respondent nos. 1 and 7

has contended that, the notice dated November 17, 2023 is a notice

under the Insolvency Rules. Therefore, the appellants were aware

that insolvency proceedings will be filed. Consequently, since the

appellants had filed the suit subsequent to the demand notice dated

November 17, 2023, the suit was barred. In support of such

contention, he has relied upon 2024 (3) SCC 250 (Urban

Improvement Trust Vs. Gordhan Dass) and 1977 (4) SCC 467

(T.Arivandandam Vs T.V. Satyapal).

8

17. In reply, learned Advocate appearing for the appellants has

contended that the personal guarantees of the appellants stood

discharged. He has drawn the attention of the Court to the letter

dated October 27, 2022 in this regard. He has also referred to the

Minutes of the Meeting dated December 20, 2021.

18. Referring to the order dated January 7, 2025, learned

Advocate appearing for the appellants has contended that, 8 out of

12 Members of the Consortium had released the personal guarantees

of the appellants, and 4 members did not.

19. Appellants and Mr. Jitendra Mohan Gupta are sons of late

Mr. Bhagatram Gupta who had expired on February 21, 2021.

According to the appellants, Mr. Jitendra Mohan Gupta had looked

after the affairs of respondent No. 13.

20. The respondent No. 13 had obtained credit facilities from the

respondent Nos. 1 to 12. The respondent No. 1 is the lead

consortium banker of such credit facilities that the respondent Nos.

1 to 12 had granted to the respondent No. 13.

21. According to the appellants, on the death of Mr. Bhagatram

Gupta, the appellants had approached the consortium bankers for

release of their personal guarantees. 8 out of the 12 consortium

bankers had released the personal guarantees of the appellants. Mr.

9

Jitendra Mohan Gupta had also agreed that, he would ensure that

all the consortium bankers released the personal guarantees of the

appellants.

22. After the death of Mr. Bhagatram Gupta a consortium

meeting had taken place on August 10, 2021 where the respondent

No. 1 released the personal guarantees of the appellants and

requested the other consortium bankers to take note of the same. By

a letter dated October 29, 2021 the respondent No. 13 had requested

the respondent Nos. 1 to 12 to release the personal guarantees of the

appellants.

23. Subsequent to the death of Mr. Bhagatram Gupta on

February 21, 2021, the respondent Nos. 1 to 12 had entered into a

consortium agreement dated October 1, 2021 with the respondent

No. 13. Such consortium agreement dated October 1, 2021 had been

amended on August 26, 2022. Several deeds of accession dated

November 25, 2022 and March 31, 2023 had also been executed.

24. In a consortium meeting held on December 20, 2021, the

respondent Nos. 1 and 4 had acknowledged that they released the

personal guarantees of the appellants.

25. From time to time respondent No. 1 h ad issued sanction

letters dated April 22, 2022, October 17, 2022, October 27, 2022,

10

December 21, 2022 and March 16, 2023. According to the

appellants, such sanction letters do not contain the requirement of

personal guarantees of the appellants.

26. By a letter dated November 17, 2023, the respondent No. 1

had demanded repayment of the credit facilities extended by the

consortium members to the respondent No. 13.

27. Appellants had challenged the demand notice dated

November 17, 2023 issued by the respondent No. 1 before the High

Court at Cuttack in WP (C) 41170 of 2023. By an order dated August

22, 2024, the Orissa High Court had disposed of such writ petition

by holding that, the notice dated November 17, 2023 allows the

appellants to agitate their points before the National Company Law

Tribunal.

28. Appellants had filed a suit for declaration and injunction

being Title Suit COM 110/2024 before the learned Commercial Court

at Rajarhat on November 6, 2024. In such suit, the appellants had

joined all Members of the Consortium as defendants and the

principal borrower as the proforma defendant. Plaintiffs had prayed

for the following reliefs in such suit:-

“(a) Declaration that the personal guarantee executed

by the plaintiffs in favour of the defendant Nos. 1 to 12

11

for debts of the defendant No. 13 have stood

discharged and/or has been released;

(b) Perpetual injunction restraining the defendant Nos.

1 to 12 from contending that the plaintiffs are

guarantors to any of them in respect of fina ncial

assistance transactions between them and the

defendant no. 13, in any manner whatsoever;

(C) Perpetual injunction restraining the defendant Nos.

1 to 12 from giving any effect to and/or acting in

furtherance to of any of the Deeds of Guarantee

executed by the plaintiffs;

(d) Receiver;

(e) Injunction;

(f) Costs;

(g) Such further and/or other relief or reliefs.”

29. In the suit, appellants had filed an application for injunction.

Learned Commercial Court had refused to grant ex parte ad interim

injunction on the ground that there would be a probability of

Securitization and Reconstruction of Financial Assets and Security

Interest Act, 2002 (SARFAESI) proceeding being initiated against the

appellants. Appellants had carried an appeal directed against such

order of refusal being FMAT 504 of 2024 which was disposed of by

an order dated January 7, 2025 without interference.

30. Respondent no. 1 had filed two proceedings under Section 95

of the Insolvency and Bankruptcy Code, 2016 against the appellants

being CP(IB)/32/KB/2025 against the appellant no. 1 and

CP(IB)/33/KB/2025 as against the appellant no. 2 on January 15,

12

2025. The National Company Law Tribunal had by its order dated

February 4, 2025 appointed Resolution Professional in respect of the

two proceedings.

31. By an order dated February 4, 2025 NCLT had admitted both

the proceedings being CP(IB)/32/KB/2025 and CP(IB)/33/KB/2025.

Records suggest that the two proceedings have now been fixed on

July 30, 2026 before the NCLT.

32. In the suit, the respondent No. 1 had filed an application

under Order VII Rule 11 of the Code of Civil Procedure, 1908 on

February 11, 2025. In such petition under Order VII Rule 11 of the

Code of Civil Procedure, 1908, respondent No. 1 had taken the point

of bar under Section 96 of the Insolvency and Bankruptcy Code,

2016 as well as the order dated January 7, 2025 passed by the

Orissa High Court in WP(C) No. 41170 of 2023.

33. By the impugned order, learned Judge has invoked Section

96 of the Insolvency and Bankruptcy Code, 2016 to dismiss the suit.

Section 96 of the Insolvency and Bankruptcy Code, 2016 is as

follows:-

“S. 96. Interim-Moratorium. – (1) When an application is

filed under Section 94 or Section 95-

(a) an interim-moratorium shall commence on the date

of the application in relation to all the debts and shall

13

cease to have effect on the date of admission of such

application; and

(b) during the interim-moratorium period-

(i) any legal action or proceeding pending in respect of

any debt shall be deemed to have been stayed; and

(ii) the creditors of the debtor shall not initiate any legal

action or proceedings in respect of any debt.

(2) Where the application has been made in relation to

a firm, the interim-moratorium under sub-Section (1)

shall operate against all the partners of the firm as on

the date of the application.

(3) The provisions of sub-Section (1) shall not apply to

such transactions as may be notified by the Central

Government in consultation with any financial sector

regulator.”

34. Section 96 of the Insolvency and Bankruptcy Code, 2016

deals with interim moratorium. It postulates that when an

application under Section 94 or 95 of the Insolvency and Bankruptcy

Code, 2016 is filed, interim moratorium will commence from the date

of the application and shall cease to have effect on the date of

admission of such application. It provides that, during interim

moratorium period, any legal action or proceeding pending in respect

of any debt shall be deemed to be stayed and that, creditor of the

debtor shall not initiate any legal action or proceeding in respect of

any debt. Sub Sections (2) and (3) of Section 95 of the Insolvency

and Bankruptcy Code, 2016 are not relevant in the facts and

circumstances of the present case.

14

35. For Section 96 of Insolvency and Bankruptcy Code, 2016 to

come into operation, there must be a pending application under

Section 94 or 95 thereof.

36. Section 96 of Insolvency and Bankruptcy Code, 2016

provides for interim moratorium for specific period of time and in

specified circumstances. So far as the period of interim moratorium

is concerned, it pegs the commencement date to be the date on

which the application under Section 94 or 95 of the Section 96 of the

Insolvency and Bankruptcy Code, 2016 was filed. The terminus of

the interim moratorium is pegged at the date of admission for such

application. In the facts of the present case, moratorium commenced

on January 15, 2025 and terminated on February 4, 2025.

37. Section 96 provides for interim moratorium of the periods

specified under two circumstances. Section 96(1)(b)(i) of the

Insolvency and Bankruptcy Code, 2016 provides that inte rim

moratorium in respect of pending proceedings while Section

96(1)(b)(ii) thereof puts an embargo on initiation for any legal action

in respect of any debt of the debtor.

37A. It is trite law that, the liability of the guarantor is co extensive

as that of the principal debtor unless there is a contract of the

contrary. A creditor can choose to initiate proceedings for recovery

15

either jointly or severally against the debtor or the guarantor.

Channaveerappa Beleri (supra), H.R. Basavaraj (supra) and

Gouri Shankar Jain (supra) are some of the authorities for such

proposition.

38. In the facts and circumstances of the present case, personal

guarantees of the appellants, are debts till such time, such personal

guarantees are waived or the appellants are released therefrom.

According to the appellants they stand released from their personal

guarantees. The appellants are entitled to file and maintain a suit

seeking a declaration that they stand released from their personal

guarantees. Such a declaratory suit is within the jurisdiction of a

Civil Court. Pendency of a proceeding under Section 95 of the

Insolvency and Bankruptcy Code, 2016 would however impact the

suit if filed within the period of embargo under Section 96(1)(b)(ii) or

Section 101 thereof.

39. Appellants had filed the suit, in which the impugned order

was passed, on November 6, 2024. The respondent no. 1 had filed

proceedings under Insolvency and Bankruptcy Code, 2016 on

January 15, 2025. Appellants had therefore filed the suit prior in

point of time than the applications under Section 95 of the

16

Insolvency and Bankruptcy Code, 2016 filed by the respondent no.

1.

40. We need not enter into the issue as to whether or not the

respondent no. 1 as the consortium lead banker can initiate

proceedings under the Insolvency and Bankruptcy Code, 2016 as

against the appellants for debts allegedly due on account of personal

guarantees of the appellants to some of the members of the

consortium bankers. Such issue is kept open to be decided by the

appropriate forum.

41. The foundational fact on which, Section 96 of the Insolvency

and Bankruptcy Code, 2016 comes into operation is the filing of a

petition either under Section 94 or 95 of the Insolvency and

Bankruptcy Code, 2016. In the facts and circumstances of the

present case, a petition under Section 95 of the Insolvency and

Bankruptcy Code, 2016 was filed on January 15, 2025 which is

subsequent to the suit which was filed on November 6, 2024.

42. Since, Section 95 proceedings was filed subsequent to the

suit, then, the scenario envisaged under Section 96(1)(b)(i) would

apply till the date of admission that is, February 4, 2025. Section

96(1)(b)(i) directs stay of any pending proceeding in respect of the

17

debt which is the subject matter of a petition under Section 95 of the

Insolvency and Bankruptcy Code, 2016.

43. In view of Section 96 of the Insolvency and Bankruptcy Code,

2016, therefore, interim moratorium had commenced on and from

January 15, 2025 when Section 95 petition was filed before the

NCLT. The suit being pending on the date of commencement of the

moratorium, it could not have been dismissed under Section 96 of

the Insolvency and Bankruptcy Code, 2016.

44. There is another moratorium in respect of applications under

Sections 94 and 95 of the Insolvency and Bankruptcy Code, 2016

that is, under Section 101. Under Section 101 of the Insolvency and

Bankruptcy Code, 2016, when an application of Sections 94 or 95 is

admitted under Section 100, a moratorium commences in relation to

all debts. Moratorium however ceases at the end of the period of 180

days beginning from the date of admission of the application till the

date NCLT passes an order on the repayment plan under Section

114, whichever is earlier.

45. In the facts and circumstances of the present case, the two

petitions were admitted on February 4, 2025. 180 days since its

admission is already over for a valid moratorium under Section 101

18

of the Insolvency and Bankruptcy Code, 2016 to exist on the date of

the impugned order.

46. Prescription of moratorium for limited period of time under

the Insolvency and Bankruptcy Code, 2016 therefore re-emphasises

the view that pending civil proceedings are not stayed indefinitely

nor are they required to be dismissed as barred by law, if such civil

proceedings were instituted prior in point of time.

47. The effect of Sections 231 and 238 of the Insolvency and

Bankruptcy Code, 2016 on the already instituted suit prior to the

invocation of the provisions of the Insolvency and Bankruptcy Code,

2016 requires consideration.

48. Sections 231 and 238 of the Insolvency and Bankruptcy

Code, 2016 are as follows:-

“S. 231. Bar of jurisdiction. – No civil court shall

have jurisdiction in respect of any matter in which the

Adjudicating Authority or the Board is empowered by,

or under this Code to pass any order and no injunction

shall be granted by any court or other authority in

respect of any action taken or to be taken in pursuance

of any order passed by such Adjudicating Authority or

the Board under this Code.”

“S. 238. Provisions of this Code to override other

laws.- The provisions of this Code shall have effect,

notwithstanding anything inconsistent therewith

contained in any other law for the time being in force or

19

any instrument having effect by virtue of any such

law.”

49. Section 231 of Insolvency and Bankruptcy Code, 2016

imposes a bar of jurisdiction on Civil Courts. It provides that no Civil

Court shall have jurisdiction in respect of any matters in which the

adjudicating authority or the Board is empowered by or under the

Insolvency and Bankruptcy Code, 2016 to pass any order and no

injunction shall be granted by any Court or o ther authority in

respect of any action taken or to be taken in pursuance of any order

passed by such adjudicating authority or Board under the

Insolvency and Bankruptcy Code, 2016.

50. There are two parts to Section 231. The first part oust the

jurisdiction of Civil Court. The second part prohibits orders

preventing implementation of the process under the Insolvency and

Bankruptcy Code, 2016. The underlying mandatory requirement for

any of the two parts of Section 231 to be validly attracted is the

pendency of a proceeding under the Insolvency and Bankruptcy

Code, 2016.

51. There are specific provisions in the Insolvency and

Bankruptcy Code, 2016 for stay of proceeding and ouster of

jurisdiction, such as Sections 96 and 101. They modulate the

specific arena they address. They provide for stay of pending

20

proceeding before a Civil Court while prohibiting fresh filing during a

specific period of time. Stay and embargo recedes on the eventuality

specified for their recession occurring.

52. When these specific provisions of stay and ouster of

jurisdiction do not require dismissal of a pending proceeding .

Section 231 of the Insolvency and Bankruptcy Code, 2016 should

not be read to prescribe ouster of jurisdiction of Civil Court en masse

on the initiation of proceeding under the Insolvency and Bankruptcy

Code, 2016. Section 231 of the Insolvency and Bankruptcy Code,

2016 mandates and require that order of Civil Courts do not impede

the due conclusion of the proceeding before the Adj udicating

Authority or the Board.

53. Section 231 of the Insolvency and Bankruptcy Code, 2016

seeks to insulate proceedings before an order of Adjudicating

Authority and the Board from interference by Civil Court. On a strict

construction of Section 231 it prescribes ouster of Civil Courts

jurisdiction only in the specific scenarios prescribed elsewhere in the

Insolvency and Bankruptcy Code, 2016, such as Section 96 and 101

and not otherwise, and that too, if the Civil Court proceeding was

instituted subsequent to the filing of the NCLT proceeding.

21

54. Section 238 of the Insolvency and Bankruptcy Code, 2016

lays down that, the provisions of the Insolvency and Bankruptcy

Code, 2016 shall have effect, notwithstanding anything inconsistent

therewith contained in any other law for the time being in force or

any instrument having the effect by virtue of any such law. Our

attention has not been drawn to any material fact apart from the suit

filed as noted above and the two proceedings under Section 95

pending before the NCLT for us to invoke or dwell on Section 238 of

the Insolvency and Bankruptcy Code, 2016 in the facts and

circumstances of the present case.

55. Insolvency and Bankruptcy Code, 2016 has provided for

moratorium as well as bar on the civil courts jurisdiction in different

situations. Essentially, if there is a pending proceeding before a civil

court, then, on initiation of proceedings under the Insolvency and

Bankruptcy Code, 2016 such civil proceedings are to remain stayed

for the time period specified in the Insolvency and Bankruptcy Code,

2016. In the event, the civil suit is filed subsequent to the

moratorium coming into effect under the Insolvency and Bankruptcy

Code, 2016 then, there may be an issue of dismissal of such civil

suit. However, in the facts and circumstances of the present case, we

are not called upon to pronounce affirmatively on such a situation.

22

56. Interplay of Sections 231 and 238 along with the relevant

sections relating to moratorium under the Insolvency and

Bankruptcy Code, 2016 may have to be considered if, the civil suit

was filed subsequent to the initiation of the proceedings under the

Insolvency and Bankruptcy Code, 2016 which is not the factual

scenario here. We therefore refrain ourselves from pronouncing on

such a scenario.

57. In the scenario of a pending civil proceedings instituted prior

to the initiation of proceedings under the Insolvency and Bankruptcy

Code, 2016 the civil court will not pass an order of injunction in

respect of any action taken or to be taken in pursuance to any order

passed by the NCLT under the Insolvency and Bankruptcy Code,

2016.

58. Again, nothing has been drawn to our attention to suggest

that, the learned Trial Judge passed any order in respect of any

action taken report to be taken in pursuance to any order passed by

the NCLT under the Insolvency and Bankruptcy Code, 2016.

59. The issue as to whether the jurisdiction of a Civil Court

under Section 9 of the Code of Civil Procedure, 1908 stands ousted

by any special statute or not has received consideration of the

Hon’ble Supreme Court a number of times. In VCK Share and

23

Stock Broking Services Limited (supra) Hon’ble Supreme Court

has considered the bar of jurisdiction of Civil Court under Section 18

of the Recovery of Debts and Bankruptcy Act, 1993. There the

Hon’ble Supreme Court has relied upon a Constitution Bench

decision reported at 1968 (3) SCR 662 (Dhulabhai and Others

Versus State of Madhya Pradesh ) and three Judges Bench

decision reported at 2023 (6) SCC 220 (Dwarka Prasad Agarwal

Versus Ramesh Chandra Aga rwal). It has observed that, Section 9

of the Code of Civil Procedure, 1908 confers jurisdiction upon Civil

Court to determine all disputes of civil nature unless the same is

barred under statute either expressly or by necessary implication

and that such bar is not to be readily inferred. It has also held that,

provision seeking to bar jurisdiction of a Civil Court requires a strict

interpretation and that the Court would normally lean in favour of

the construction which would uphold the jurisdiction of the Civil

Court.

60. Referring to Section 18 of the Recovery of Acts due to Banks

and Bankruptcy Act, 1993, VCK Share and Stock Broking

Services Limited (supra) has held that, a jurisdiction of a Civil

Court to try a suit filed by a borrower against the banker or a

financial institution is not ousted by virtue of the scheme of the Act

24

of 1993 in relation to the proceedings for Recovery of Debt by banker

or the financial institution.

61. In the context of bar of jurisdiction under Section 34 of the

Securitization and Reconstruction of Financial Asse ts and

Enforcement of Security Interest Act, 2002, the Calcutta High Court

in Pyari Devi Chaniraj Steels Pvt. Ltd. (supra) has held that bar of

jurisdiction under Section 34 of the Act of 2002 was limited to the

suit of the nature which is within the compe tence of the Debt

Recovery Tribunal to decide under Section 17 thereof.

62. Embassy Property Developments Private Limited (supra)

has held that, NCLT is not a civil court. NCLT and NCLAT have been

constituted under Sections 408 and 410 of the Companies Act, 2013

and not under the Code of 2016. It has noted the scheme of the

Insolvency and Bankruptcy Code, 2016. It has held that, NCLT can

exercise jurisdiction only in respect of matters which the Insolvency

and Bankruptcy Code, 2016 permits it to do.

63. Gujarat Urja Vikas Nigam Ltd . (supra) has considered the

residual clause under Section 60 (5) (c) of the Code of 2016 and held

that, NCLT has jurisdiction to adjudicate disputes which arise solely

and which relate to the insolvency of the corporate debtor. However,

in doing so, NCLT and NCLAT have to ensure that they do not usurp

25

the legitimate jurisdiction of other courts, tribunals and fora when

the dispute is one which does not arise solely from or related to the

insolvency of the corporate debtor.

64. Rajendra Prasad Bansal (supra) has held that the NCLT is

a statutory Tribunal and therefore its powers are circumscribed by

the provisions of the statute which confers jurisdiction upon it. It

has also held that unlike a civil court, the NCLT does not have

general jurisdiction under Section 9 of the CPC.

65. Escorts Heart Institute and Research Centre Ltd . (supra)

has considered the provisions of the Public Premises (Eviction of

Unauthorised Occupants) Act, 1971 in the facts and circumstances

of that case. It has held that, the proceedings initiated under the Act

of 1971 was not maintainable in view of the suit filed in respect of

the land for which notice for eviction was issued under the Act of

1971.

66. M/s Oriental Building and Furnishing Co. Ltd., New Delhi

(supra) has considered the jurisdictional issue arising from the

interplay between the Arbitration Act, 1940 and the Public Premises

(Eviction of Unauthorised Occupants) Act, 1971. It has held that,

Section 15 of the Act of 1971 was not a bar to refer the matter to

arbitration. It has also held that, there is nothing in the Act of 1971

26

or the Arbitration Act, 1940 barring the arbitration proceeding and

is of the view that the matter can be referred to arbitration

notwithstanding the fact that the Estate Officer may have chosen to

take action under the Act of 1971.

67. In United India Insurance Co. Ltd. (supra) the Bombay

High Court has held that a suit for injunction by tenants claiming

car-parking rights was under the jurisdiction of the Court of Small

Causes under Section 41(1) of the Presidency Small Causes Court

Act. It has reiterated the well settled law that the issue of jurisdiction

has to be determined on the basis of the averments made in the

plaint and on the prima facie reading it is clear that there is no

remedy available for the tenant under the Act of 1971 to seek

injunction and that the bar under Section 15 of the Act of 1971 is

not attracted.

68. ESAB India Limited (supra) has decided the question of

jurisdictional bar under Section 15 of the Public Premises (Eviction

of Unauthorised Occupants) Act, 1971. The Court has observed that

the suit did not appear to be barred under Section 15 of the Public

Premises Act, but the plaintiff still failed to establish a prima facie

case for interim injunction, so the impugned order was upheld.

27

69. Karam Singh (supra) has held that, whether the suit is

barred by any law or not is to be determined on the basis of the

averments made in the plaint and nothing else.

70. Saleem Bhai and others (supra) has held that, for the

purposes of deciding an application under clauses (a) and (d) of

Order VII Rule 11 of the Code of Civil Procedure, 1908, the

averments made in the plaint are relevant. The pleas taken by the

defendant in the written statement are wholly irrelevant at such

stage.

71. Manohar Lal Chatrath (supra) has held that Order VII Rule

11(d) CPC permits rejection of plaint only when a suit is barred by

law appearing from the statements in the plaint including the

documents filed with the plaint, and nothing more.

72. P. Kumarakurubaran (supra) has noticed various

authorities of the Supreme Court under Order VII Rule 11 of the

Code of Civil Procedure, 1908. In the facts of that case, the decision

to reject the claim on the ground of limitation under Order VII Rule

11 of the Code of Civil Procedure, 1908 had been set aside.

73. T. Arivandandam (supra) has found the suit filed by the

plaintiff therein to be an abuse of process of court. The suit that has

28

been filed by the appellants herein cannot be classified as an abuse

of process of Court.

74. Urban Improvement Trust (supra) has noted that, the

jurisdiction of civil courts to try suits of civil nature is expansive and

that, the onus to prove the ouster of jurisdiction is on the party

which has alleged the same. It has also held that, in cases where the

jurisdiction of the Civil Court is barred by a statute, the test is to

determine if the authority or tribunal constituted by the statute has

the power to grant the reliefs that the Civil Courts would normally

grant in suits filed before them.

75. Authorities noted above, in the context of an application

under Order VII Rule 11 (d), have laid down that the court in seisin

of such an application is required to: –

(i) keep in consideration that the rejection of a plaint under

Order VII Rule 11 is a drastic power conferred on the court to

terminate a civil action at the threshold;

(ii) conditions precedent to the exercise of such powers are

stringent;

(iii) examine and read the plaint as a whole, and nothing else;

(iv) the defence available to the defendants or the pleas taken by

them in the written statement or any application filed by

29

them cannot be the basis to decide the application under

Order VII Rule 11 (d);

(v) on a meaningful and not formal reading of the plaint if the

plaint is found to be manifestly vexatious and meritless, not

disclosing a clear right to sue, powers under Order VII Rule

11 can be exercised;

(vi) only a part of the plaint cannot be rejected and if no cause of

action is disclosed, the plaint as a whole must be rejected;

(vii) Order VII Rule 11 can be invoked at any stage.

76. Dilip B. Jiwarajka (supra) has dealt with the challenge to

the constitutional validity of Sections 95 to 100 of the Insolvency and

Bankruptcy Code, 2016. It has observed that, no judicial

adjudication is involved at the stages envisaged in Sections 95 to 99

of the Insolvency and Bankruptcy Code, 2016. It has held that, no

judicial determination takes place until the adjudication authority

decides under Section 100 whether to accept or reject the

application. Sections 95 to 100 have been held not to be

unconstitutional as they do not violate Article 14 and 21 of the

Constitution.

77. In the context of a writ petition challenging a demand notice

issued under Rule 7 (1) of the Insolvency and Bankruptcy

30

(Application to Adjudicating Authority for Insolvency Resolution

Process for Personal Guarantors to Corporate Debtors) Rules, 2019

the Delhi High Court in Vineet Saraf (supra) has held that, the

relief prayed for in the writ petition could be granted by the NCLT.

78. Roseland Buildtech (supra) has held that, the plaint in

question was a classic example of a proceeding which though clothed

as a civil declaratory action, was in reality impermissible collateral

attack on the jurisdiction and functioning of NCLT under Insolvency

and Bankruptcy Code, 2016. The court has held that entertaining

such civil suits filed subsequent to the NCLT proceedings would

render otiose the legislative intent behind the creation of a

specialized fora and encouraging forum shopping and procedural

circumvention.

79. Kennigton Inductries Pvt Ltd (supra) has held that, when

the civil court has no jurisdiction by virtue of Sections 33(5) and 63

of the Insolvency and Bankruptcy Code, 2016, the authority of the

civil court to pass any order goes to the root of the matter and lack of

jurisdiction nullifies the order, if any.

80. Vysali Phamacueticals Limited (supra) has held that, it is

the incumbent duty of the Court to suo moto verify whether the suit

is maintainable before such court or not. In th e facts and

31

circumstances of that case, the Trial Court had failed to notice the

pending liquidation proceeding before the NCLT which invoked

Section 63 that barred the Civil Court jurisdiction to entertain any

suit.

81. Mohato Industries Ltd (supra) has noticed that, the suit is

liable for rejection under Order VII Rule 11 read with Section 151 of

CPC, as the suit was filed after the moratorium came into effect. It

has held that it is not necessary to only look into the pleadings in

the plaint while considering the application under Order VII Rule 11,

specifically when the Insolvency and Bankruptcy Code, 2016 is a

special legislation which empowers NCLT to pass orders prohibiting

parties to initiate proceedings while moratorium period is in effect.

The fact situation in this appeal is different. Suit was filed prior to

the moratorium coming into effect.

82. Mohammed Enterprises (supra) has held that, the

Insolvency and Bankruptcy Code, 2016 is a complete and self -

contained code and any unjustified interference with the CIRP

initiated under Insolvency and Bankruptcy Code, 2016 breaches the

legal discipline.

32

83. In this case, the learned Trial Judge has dismissed the plaint

of the appellants on the ground of the same being barred under

Section 96 of the Code of 2016.

84. On the date, when the suit was filed by the appellants, that is

November 6, 2024, there was no proceeding under the Insolvency

and Bankruptcy Code, 2016 as against any of them. The demand

notice dated November 17, 2023 which was issued prior to the filing

of the suit on November 6, 2024 is of no consequence in view of the

provisions of Section 96 of the Insolvency and Bankruptcy Code,

2016. Section 96 of the Insolvency and Bankruptcy Code, 2016

comes into operation only after an application under Section 94 or

95 has been filed before the NCLT. It has no manner of application

when, a notice has been issued.

85. In the suit, the appellants had prayed for declaration and

perpetual injunction with regard to personal guarantees that they

executed in favour of the 12 defendants in the suit. All 12

defendants in the suit have not instituted the two insolvency

proceedings as against the appellants.

86. The plaint cannot be rejected in part, that is to say that, it

cannot be rejected only for the defendants who had approached the

NCLT. Appellants as plaintiffs were entitled to file a suit before a civil

33

court to have declaration and perpetual injunction as prayed for

therein as against all the defendants. As has been noted, all the

defendants have not approached the NCLT. The suit was therefore

maintainable as against the defendants who did not approach the

NCLT, if not as against all. Consequently, the plaint could not have

been rejected as part of a plaint cannot be rejected under Order VII

Rule 11 of the Code of Civil Procedure, 1908.

87. There was no embargo on the appellants when they had filed

the suit to seek the reliefs as they sought therein. They cannot be

asked to wait till the respondents herein decide to invoke the

Insolvency and Bankruptcy Code, 2016. Our attention has not been

drawn to any provisions of law which require the appellants before

us to wait till the bankers decided to invoke the provisions of the

Insolvency and Bankruptcy Code, 2016 on the claim of personal

guarantee as against the appellants. In other words, no law has

prohibited the appellants to approach a Civil Court and pray for the

reliefs as done in the present suit, when they did so.

88. Significantly after having issued the demand notice on

November 17, 2023, the respondent No. 1 had approached the NCLT

only on January 15, 2025.

34

89. In view of the above, the impugned order dismissing the suit

cannot be sustained. Impugned order dated February 19, 2016 is set

aside. Title Suit Com No. 110 of 2024 is remanded to the learned

Trial Court for disposal.

90. AD COM 2 of 2026 is allowed without any orders as to costs.

IA No. CAN 1 of 2026 is disposed of accordingly.

[DEBANGSU BASAK, J.]

91. I agree.

[MD. SHABBAR RASHIDI, J .]