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case study on a particular case law
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Delhi High Court Ssmp Industries Ltd. vs Perkan Food Processors Pvt. Ltd. on 18 July, 2019 SSMP INDUSTRIES LTD. ..... Plaintiff Versus PERKAN FOOD PROCESSORS PVT. LTD. ..... Defendant The Court framed the question it sought to answer in the following terms - “whether the adjudication of the counter claim would be liable to be stayed in view of Section 14 of the Code.” In this light, the Court commenced its analysis on the footing that the adjudication of the plaint and counterclaim are interlinked with each other, and that the outcome of the same is uncertain. The Court thereafter placed reliance on the Order of the Hon’ble Delhi High Court in Power Grid Corporation of India v Jyoti Structures Ltd. ((2018) 246 DLT 485) (Power Grid), and drew from it the conclusion that “until and unless the pending proceeding has the effect of endangering, diminishing, dissipating or adversely impacting the assets of the corporate debtor, it would not be prohibited under Sec. 14(1)(a) of the Code” (emphasis supplied). The Court also placed reliance on the Order of the NCLAT (National Company Law Tribunal) in Jharkhand Bijli, where the NCLAT permitted the continuation of a counterclaim against the corporate debtor undergoing CIRP (Corporate Insolvency Resolution Process) on the ground that the claim by the corporate debtor could be determined only after determination of the counter claim made against the corporate debtor. The Court concluded its analysis with the finding that though a counter-claim would strictly speaking be covered by the moratorium under Sec. 14 IBC, it would be purposive and efficacious for a counter-claim to be adjudicated comprehensively by the same forum in case the counter-claim was integral to the recovery sought by the corporate debtor and related to the same transaction. As regards the possibility of the counter-claim succeeding and a judgment-debt being created against the Plaintiff-Corporate Debtor, the Court stated simply that Section 14 of the IBC could be triggered to protect the Plaintiff-Corporate Debtor’s assets at the stage of execution of such a decree.