Moratorium ends after IBC proceedings culminate : Delhi High Court
Refuses to interfere with the impugned order
Moratorium ends after IBC proceedings culminate : Delhi High Court
Refuses to interfere with the impugned order
The Delhi High Court has held that the moratorium ceases to exist once proceedings under the Insolvency and Bankruptcy Code (IBC), 2016 (IBC) culminate.
The petitioner Sunil Kumar Pandey in his writ petition placed on record that he was defrauded by a builder Kunal Structural Developers and Industries Pvt Ltd in collusion with Indiabulls Housing Finance Limited.
He approached the State Consumer Disputes Redressal Commission and secured an order in its favor.
The appellant filed a writ petition before the single-judge bench of the Delhi High Court, seeking an injunction to restrain the bank from encashing the cheques given by the appellant and demanding the EMI every month from him. However, the case was dismissed.
Aggrieved by the decision, the present appeal was filed by the appellant before the division bench of the Delhi High Court comprising the Chief Justice.
A bench of Chief Justice Satish Chandra Sharma and Justice Subramonium Prasad observed, "The appellant claimed that the single judge failed to note that the civil suit was rendered infructuous due to the moratorium imposed upon the builder. However, this anxiety of the appellant is ill-founded, as the moratorium operates qua the builder and not the bank."
The court added, "In any event, the moratorium will cease to exist once the proceedings under IBC culminate. Therefore, we do not find any reason to interfere with the impugned order."
Dismissing the petition, the court, however, noted its grief, "It is a rather unfortunate trend that builders often resort to dilatory tactics, defraud homebuyers by selling units to multiple individuals, delay the execution of projects, and execute projects without the requisite sanctions. Invariably, most builders also undergo insolvency. The greatest loss is incurred by innocent homebuyers who are not only forced to embroil themselves in litigation but are also divested of their hard-earned savings."