Case Note & Summary
The Petitioner, a former employee of Respondent No.1 company, had filed a Summary Suit in 2017 for recovery of salary dues -- After the company went into liquidation under IBC in 2019, the Petitioner sought to implead the Liquidator as a party Defendant through a Chamber Summons -- The Trial Court dismissed the Chamber Summons, leading to this Writ Petition -- The High Court analyzed Section 33(5) of IBC and held that it only prohibited institution of fresh suits after liquidation, not continuation of pending suits -- The Court found that the Liquidator could be impleaded to defend the suit on behalf of the corporate debtor -- The Court set aside the Trial Court's order and allowed impleadment of the Liquidator
Headnote
The High Court of Judicature at Bombay allowed a Writ Petition challenging the dismissal of a Chamber Summons seeking impleadment of the Liquidator in a pending Summary Suit -- The Court interpreted Section 33(5) of the Insolvency and Bankruptcy Code, 2016 (IBC) and held that the prohibition under this provision applied only to institution of fresh suits or proceedings against the corporate debtor after liquidation order -- The Court held that there was no bar on continuation of suits already pending before the liquidation order -- The Court distinguished between Section 33(5) and Section 63 of IBC, noting that Section 63 did not apply to suits already pending before commencement of liquidation proceedings -- The Court relied on judgments from Kerala High Court, Delhi High Court, and Madras High Court supporting the continuation of pending suits -- The Court held that the Liquidator could be impleaded as a party Defendant to defend the suit on behalf of the corporate debtor -- The impugned order dated 17 October 2022 was set aside and the Chamber Summons was allowed
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Issue of Consideration: Whether the Liquidator of a corporate debtor could be impleaded as a party Defendant in a pending suit after the passing of a liquidation order under the Insolvency and Bankruptcy Code, 2016 (IBC)
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Final Decision
The High Court allowed the Writ Petition -- Set aside the impugned order dated 17 October 2022 -- Allowed Chamber Summons No.1769 of 2019 -- Directed impleadment of Liquidator as party Defendant in Summary Suit No.1398 of 2017
2026 LawText (BOM) (02) 16
Writ Petition No. 5393 of 2023
Mr. Rohan Savant with Mr. Huzefa Khokhawala i/b M/s. Nankani & Associates (for Petitioner), Mr. Harsh Sheth i/b M/s. MDP Legal (for Respondents)
S. Kumars Nationwide Limited
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Nature of Litigation: Writ Petition challenging dismissal of Chamber Summons seeking impleadment of Liquidator in pending Summary Suit
Remedy Sought
Petitioner sought setting aside of Trial Court order and impleadment of Liquidator as party Defendant
Filing Reason
Trial Court dismissed Chamber Summons No.1769 of 2019 which sought to add Liquidator as party Defendant after company went into liquidation
Previous Decisions
Trial Court dismissed Chamber Summons on 17 October 2022 -- Summary Suit was proceeding ex parte against Respondent No.1 since 22 June 2018 -- NCLT passed liquidation order on 19 June 2019
Issues
Whether Section 33(5) of IBC prohibits continuation of pending suits after liquidation order
Whether Liquidator can be impleaded as party Defendant in pending suit
Submissions/Arguments
Section 33(5) of IBC only prohibits institution of fresh suits, not continuation of pending suits -- Section 63 of IBC does not apply to suits pending before liquidation -- Liquidator can defend suits on behalf of corporate debtor -- Various High Court judgments support continuation of pending suits
Ratio Decidendi
Section 33(5) of IBC prohibits only institution of fresh suits or proceedings against corporate debtor after liquidation order -- There is no prohibition on continuation of suits already pending before liquidation -- Liquidator can be impleaded as party Defendant to defend pending suit on behalf of corporate debtor -- Section 63 of IBC does not apply to suits pending before commencement of liquidation proceedings
Judgment Excerpts
The prohibition under Section 33(5) of IBC is only on filing of fresh suit or proceedings and there is no prohibition for continuation of pending suits or proceedings
If Liquidator can file a suit, he can also defend the same
Section 63 of IBC does not apply to suits which are already pending before commencement of liquidation proceedings
Procedural History
Summary Suit No.1398 of 2017 filed on 4 October 2017 -- Suit proceeded ex parte on 22 June 2018 -- Company Petition No.294 of 2018 filed under Section 7 of IBC -- Moratorium imposed on 24 April 2018 -- Liquidation order passed on 19 June 2019 -- Chamber Summons No.1769 of 2019 filed for impleadment -- Chamber Summons dismissed on 17 October 2022 -- Writ Petition No.5393 of 2023 filed -- Reserved on 29 January 2026 -- Pronounced on 5 February 2026
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