1.       The present First Appeal (FA) has been filed by the Appellant against Respondent as detailed above, under section 51 of Consumer Protection Act 2019, against the order dated 06.11.2023 of the State Consumer Disputes Redressal Commission, Delhi (hereinafter referred to as the ‘State Commission’), in I.A. No. 1285 of 2023 in Consumer Complaint (CC) No. 865/2018 inter alia praying for setting aside the order passed by the State Commission in IA/1285/2023 in CC/865/2018.

2.       While the Appellant was Respondent and the Respondent was Complainant in the said CC/865/2018 before the State Commission. Notice has not yet been issued to the Respondent in First Appeal. The Appellant has filed the Appeal mainly on the following grounds:

1. The impugned order dated 06.11.2023 passed by the State Commission is bad in law and is highly prejudicial to the Appellant. The State Commission dismissed the IA filed by the Appellant.

2. The State Commission ought to have considered the fact that since the moratorium has been declared against the Appellant Company and State Commission ought to have stayed/sine die adjourned the matter and accordingly a relief of adjourning the matter sine die has been sought by the Appellant Company in the said application.  Various orders passed by the NCLT, NCLAT and Hon’ble Supreme Court of India qua the ongoing proceedings against the Appellant Company clearly reveal that the Moratorium as per Section 14 of the Insolvency & Bankruptcy Code 2016 is being operate-able on the Appellant Company and therefore as per the extant law, more specifically as per Section 14(1) of Insolvency & Bankruptcy Code continuation of pending proceedings against the Corporate Debtor (the Appellant in the present case) is strictly prohibited.

3. The IRP of the Appellant Company has also published a list of projects on the official website of the Appellant Company for the knowledge of public at large which clearly stipulates that the project in question in the present complaint i.e., ECO Village -3 is covered under moratorium proceedings.

4. The State Commission ought to have considered that the NCLT Bench IV, New Delhi vide its order dated 25.03.2022 passed in IB -204(ND)/2021 titled as ‘Union Bank of India Vs. Supertech Limited’ has initiated the Corporate Insolvency Resolution Process (CIRP) against the Appellant/OP under Section 7 of the I & B Code, 2016 and appointed Mr. Hitesh Goel as Interim Resolution Professional for the same.  As per Section 14 of the I & B Code, 2016, the order of moratorium comes into force from the date of pronouncement of order by NCLT till the completion of the CIRP and as per Section 14(1) of the I & B Code, 2016, an order of moratorium passed by the NCLT prohibits institution as well as continuation of pending suits or proceedings against the Corporate Debtor.  It is clear that upon passing of order dated 25.03.2022 by the NCLT, the moratorium is subsisting against the Appellant Company.

5. The State Commission ought to have appreciated the fact that the NCLAT while modifying the order dated 25.03.2022 of the NCLT vide its order dated 10.06.2022 passed by the NCLAT in the appeal preferred by suspended director of the Appellant Company, has not directed in any manner whatsoever that the moratorium, as declared by the CIRP admission order d ted 25.03.2022, is not to continue against the Appellant Company and has even not modified the order dated 25.03.200 to that extent.  In fact the order dated 10.06.2022 while referring that the other projects can continue as ongoing projects under the supervision of IRP and with the assistance of ex-management further clarifies that moratorium is continuing.

6. The State Commission ought to have considered the order dated 12.09.2022 which has cleared all the clouds on the question of moratorium, if any, persisting prior to 12.09.2022.  NCLAT vide its order dated 12.09.2022 specifically clarified that the moratorium is continuing against the Appellant/OP Company and CIRP order has not been stayed against the Appellant/OP Company.

3.       Heard counsel for appellant. The challenge is to the order dated 06.11.2023 of State Commission vide which IA No.1283 of 2023 in CC 865/2018 filed by the appellant herein for adjourning the case sine die on the ground of initiation of Insolvency proceedings by NCLT and imposition of moratorium vide its order dated 25.03.2022. In this case, subsequently, NCLAT vide its order dated 10.6.2022 initiated reverse insolvency proceedings and limited the moratorium the project in question i.e. Eco Village –II, the appellant states that the unit of the respondent in the present case in Eco Village – III. It is contended by the appellant herein that the moratorium imposed by NCLT, notwithstanding the subsequent order of NCLAT, applies to the Appellant Company as a whole and to all the project of the appellant and hence State Commission ought to have adjourned sine die.

4.       The State Commission has considered the case in the light of the judgment of the Hon’ble Supreme Court in the Appeals filed by the “Indiabulls Asset Reconstruction Company Limited v. Ram Kishore Arora & Others” preferred against the order dated 10.06.2022.  While the Appellant contends that the reverse Insolvency Proceedings initiated by NCLAT does not affect the moratorium imposed by NCLT and it will be applicable to the Corporate Debtor as a whole and not to the project in question alone, the Respondent on the other hand, before the State Commission, contended that the moratorium in view of the NCLAT order initiating reverse proceedings is limited and applicable only to the one project in question of the OP and rest of the projects of the OP have been kept outside the purview of the aforesaid order of the NCLT. 

5.       We have considered the case in the light of judgment dated 24.03.2023 of NCLAT, Principal Bench, New Delhi in Mr.Vijay Kumar Pasricha Vs. Mr.Manish Kumar Gupta, which pertain to similar issue of the Corporate Debtor –Umang Realtech Pvt. Ltd. involving one project Winter Hill-77.  Extract of relevant paras of the said judgment is reproduced below: -

“43. After careful perusal of this Appellate Tribunal’s order dated 04.02.2020, it becomes evident that the order is confined to only Winter Hills-77 and not to other projects of the ‘Corporate Debtor’ and consequently and logically the moratorium in the present case can deemed to have been confined to only project- “Winter Hills-77” and not to other projects of ‘Corporate Debtor’.  This clarification is being given looking to peculiar and extraordinary circumstance of the case and detailed rational along with elaborate directions contained in its order dated 04.02.2020.  This ‘Appellate Tribunal’ also takes into account an important fact that in its earlier order dated 04.02.2020, for the first time, the concept of ‘Reverse CIRP’ was introduced and as such this is evolving process needing such clarification.

44. This ‘Appellate Tribunal’ will like to amplify that above clarification is on specific request of the ‘Appellant’ in present appeal and cannot be treated as general guidance or interpretation regarding moratorium on the ‘Corporate Debtor’.  To reiterate, moratorium on ‘Corporate Debtor’ as a whole is a normal, basic and fundamental law as laid down in Section 14 of the I & B Code, 2016 and need to be read accordingly.”

6.       From the above, it is clear that although in the said case of Mr. Vijay Kumar Pasricha (supra), the NCLAT clarified that the moratorium will be applicable only to the project in question, i.e. Winter Hill-77 and not to the ‘Corporate debtor’ as a whole, it, in the subsequent para 44, further amplified that the said clarification in para 43 is specific to the said case and reiterated that moratorium on ‘Corporate Debtor’ as a whole is a normal, basic and fundamental law as laid down in Section 14 of the I & B Code, 2016 and need to be read accordingly. 

7.       In view of the foregoing, we are of the considered view that except in the situation of a specific order of the NCLAT, clarifying that the moratorium in the case of M/s Supertech Ltd. is applicable only to the project in question and/or any judgement of the Hon’ble Supreme Court in this regard, the general clarification in para 44 of the order of NCLAT dated 24.03.2023 will apply.

8.       Accordingly, the matter is remanded back to the State Commission for fresh consideration in the light of earlier judgments of the Hon’ble Supreme Court and NCLAT as well as the judgement of NCLAT in Mr. Vijay Kumar Pasricha (supra), which in para 44 reiterates that the moratorium on ‘Corporate Debtor’ as a whole is normal, basic and fundamental law as laid down in Section 14 of the I & B Code 2016 and need to be read accordingly.

9.       First Appeal is disposed off accordingly. Pending IAs in the case, if any, also stand disposed off.  Appellant is directed to appear before the State Commission on 12.08.2024.