# In the matter of Elecon Engineering Company Limited Vs. Energo Engineering Projects Limited & Ors. CS(COMM) 151/2017 & I.A. 2496/2017 (O-XXXIX R-1 & 2 of CPC), I.A. 5067/2017 (O-I R-10 of CPC), I.A. 9257/2017 (OXXXIX R-4 of CPC), I.A. 10220/2017 (O-VIII R-10 of CPC) & I.A. 9280/2018

> HC judgment dated 2022-09-13. Citation: TCN-2022-HC-00023. The case CS(COMM) 151/2017 involves a dispute between Elecon Engineering Company Limited…

- **Court:** HC
- **Order date:** 13 Sept 2022
- **Citation:** TCN-2022-HC-00023
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/elecon-engineering-company-limited-vs-energo-engineering-projects-limited-ors-cs-fdd2d98b

## Summary

### Background

The case CS(COMM) 151/2017 involves a dispute between Elecon Engineering Company Limited (Plaintiff) and Energo Engineering Projects Limited & Ors (Defendants). The plaintiff filed a suit seeking a permanent injunction restraining the defendant no.1 company from encashing bank guarantees and for recovery of Rs.10,69,77,650/-. The defendant no.1 company faced insolvency proceedings before the NCLT, leading to the appointment of a Liquidator. The central issue is whether the suit can proceed despite the commencement of liquidation proceedings against the defendant no.1 under the Insolvency and Bankruptcy Code, 2016 (IBC).

## Facts

Elecon Engineering Company Limited filed a suit against Energo Engineering Projects Limited & Ors seeking a permanent injunction restraining the defendant company from encashing bank guarantees and for recovery of Rs. 10,69,77,650/-. The defendant no.1 company faced insolvency proceedings before the NCLT, leading to the appointment of a Liquidator. An ad interim injunction against payments under the bank guarantees was granted initially. Insolvency proceedings were initiated against the defendant no.1, and the suit was stayed. Subsequently, liquidation proceedings commenced. The plaintiff argued that the suit should continue despite the liquidation proceedings, while the defendant, represented by the Liquidator, contended that the NCLT has exclusive jurisdiction.

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## Issues and analysis

### Issue 1: Whether upon commencement of liquidation proceedings against the defendant no.1 company under the …

**Ratio:** Section 33(5) of the IBC imposes a moratorium on the institution of fresh suits or legal

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**Reasoning:** The court reasoned that the omission of the phrase 'continuation of pending suits' in

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**Interpretation:** The court interpreted Section 33(5) of the IBC narrowly, holding that it does

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**Application:** The court applied the ratio and reasoning to the specific facts of the case,

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## Parties

- **Judges:** AMIT BA…
- **Appellants:** Elecon Engineering…
- **Respondents:** Energo Engineering…; ENERGO ENGINEERING…

## Timeline

- **2017-02-27 — Order for Summons and…**: The Court issued summons in the suit and granted an ad interim injunction against…
- **2017-11-14 — Suit Sta…**: The present suit was stayed due to the initiation of insolvency proceedings against the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 33(5) — Initiation of liquidation](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-33)

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