While the bare text of Section 60(5) would point towards very wide powers, the Supreme Court in Embassy and Gujarat Urja has emphasized upon the limitations which are inherent to the NCLT’s jurisdiction. However, it would appear that the attention of the Supreme Court has not been drawn to several critical and important provisions within the IBC and the Companies Act, 2013. It would therefore be a strong argument that both these decisions are limited in their scope and application. The Supreme Court would probably require another occasion to deal with the other relevant provisions of law to determine the extent of NCLT’s powers under Section 60(5). Perhaps the legislature may in the meanwhile deem it fit to clarify the legal position by way of an amendment. However, till then, there still remains a substantial cloud on the extent to which the NCLT can interfere by way of the provisions of Section 60(5) and this continues to remain an unresolved conundrum.
 Civil Appeal No. 9170 of 2019 with Civil Appeal Nos. 9171 and 9172 of 2019.
 Civil Appeal No. 9241 of 2019.
 Paragraph 28 of Embassy.
 Paragraph 36 of Embassy.
 Paragraph 67 of Gujarat Urja.
 Paragraph 75 of Gujarat Urja.
 (2020) 13 SCC 234.
 Under Section 33(5) of the IBC, after passing of order of liquidation, no suit or other legal proceeding can be instituted against the corporate debtor.
 According to the decision of the Supreme Court in Ghanshyam Mishra and Sons v. Edelweiss Asset Reconstruction Company Limited Through the Director & Ors. Civil Appeal No. 1554 of 2021 and Civil Appeal No. 1550-1553 of 2021, all prior claims against the Corporate Debtor are extinguished upon the approval of the resolution professional.
This article was originally published in Mondaq on 18 August 2021 Co-written by: Ameya Gokhale, Partner; Radhika Indapurkar, Senior Associate. Click here for original article
Contributed by: Ameya Gokhale, Partner; Radhika Indapurkar, Senior Associate
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