Delhi High Court – Orders
Indian Oil Corporaton Ltd vs Psl Limited on 27 February, 2026
Author: Subramonium Prasad
Bench: Subramonium Prasad
$~46
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (COMM) 227/2020
INDIAN OIL CORPORATON LTD .....Petitioner
Through: Mr V N Koura and Mr Aditya Sharma
Advs
versus
PSL LIMITED .....Respondent
Through:
CORAM:
HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
ORDER
% 27.02.2026
I.A. 5064/2026, I.A. 5148/2026
1. The case is listed today only for a preliminary consideration as to
whether the present proceedings can continue or not, in view of the fact that
the Respondent, which underwent Corporate Insolvency Resolution Process,
has now been purchased as a going concern in the liquidation proceedings.
2. In the above context, a Co-ordinate Bench of this Court in Elecon
Engineering Company Limited vs. Energo Engineering Projects Ltd. & Ors.,
2022:DHC:3623, has observed as under:
“13. From the language of Section 33(5) of the IBC, it is
clear that the bar/moratorium is only in respect of fresh
suits or legal proceedings. Unlike the moratorium under
Section 14 of the IBC, where it is clearly noted that the
moratorium is in respect of institution of suits or
continuation of pending suits or proceedings against
corporate debtor, the words “continuation of pending
suits or proceedings” are conspicuously absent inThis is a digitally signed order.
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Section 33(5) of the IBC.
14. Section 33(5) of the IBC came up for consideration
before the Madras High Court in Chennai Metro Rail
Limited, Represented By The Chief General Manager v.
Lanco Infratech Limited, Represented By the Liquidator
Lanco House And Ors., 2020 SCC OnLine Mad 26397.
Comparing Section 446 of the Companies Act, 1956 and
Section 279 of Companies Act, 2013 with Section 33(5)
of the IBC, the Madras High Court observed as under:
“31. Section 446 of the Company Act 1956 Act
prohibited the commencement of any suit or legal
proceeding when a winding up order is made. It
also applied for the pending proceeding and the
leave was required. Section 279 of the Companies
Act 2013 also deals with the word „pendency‟ and
this word is conspicuously absent in the main part
of Section 33(5) and in the proviso of the IBC2016.
32. Comparison between Section 446 of the 2013
Act and 279 of 1956 Act. Seeking of leave under
Section 33(5) for pending cases was obviously
omitted as the case before the other authority
might have progressed until the declaration of
moratorium. In such circumstances, it would be
imprudent to transfer the case to the file of the
Adjudicating Authority and try from that stage.
Whereas, in cases of fresh commencement, it could
commence before the Adjudicating Authority
without any delay. A power to grant leave also
includes power to reject the same. A rejection of
the leave necessarily entails in the authority taking
over the case in conducting the same. The
Legislature in its wisdom thought that in cases
coming in respect of inability to pay debts and
where the resolution plan has failed, there should
be no further delay in the procedural aspects whileThis is a digitally signed order.
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dealing with the pending cases. That is why
Section 33(5) omitted to consider the case of
pending matters. Therefore, no analogy or support
can be drawn from Section 279 in interpret Section
33(5) of the IBC2016.”
15. As noted above, under Section 446 of the Companies
Act, 1956, once the Official Liquidator was appointed as
the provisional liquidator, neither a fresh suit nor a
pending suit could be proceeded against the company
except with the leave of the Company Court/Tribunal.
Similar position has been maintained under the Section
279 of the Companies Act, 2013. However, the word
„pending‟ is missing in Section 33(5) of the IBC. In
paragraph 32, the Madras High Court has given the
possible reason for such omission.
16. A similar view was taken by Kerala High Court in
The Liquidator of The Corporate Debtor, Viz., Orieon
Kuries And Loans Private Limited v. The State of Kerala
And Ors. MANU/KE/1245/2022. It was specifically
observed in the said judgment that unlike Section
14(1)(a) of the IBC, under Section 33(5) of the IBC there
is no prohibition for continuance of already instituted
suits and proceedings. The moment the liquidation
proceedings commence, there would be a bar only in
respect of fresh suits or proceedings in terms of Section
33(5) of the Code. However, the pending suits and
proceedings shall continue. In view thereof, the Kerala
High Court upheld the order passed by the Controlling
Authority under the Minimum Wages Act, 1948 even
though the same was passed during the liquidation
process.
17. I am in respectful agreement with the views expressed
by Madras High Court and Kerala High Court above. To
appreciate the difference in the language of Sections 14
and 33(5) of the IBC it may be useful to refer to the
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scheme of the IBC in the context of the aforesaid
Sections. Section 14 and Section 33 are part of two
separate Chapters of IBC. Section 14 is part of Chapter
II which deals with „Corporate Insolvency Resolution
Process‟, whereas Section 33 is a part of Chapter III
which deals with „Liquidation Process‟. Chapter II of
the IBC deals with the Resolution Process in respect of a
„corporate debtor‟, where the objective is to revive the
corporate debtor by coming out with a resolution plan,
which is to be approved by the committee of creditors
and thereafter, by the Adjudicating Authority. Chapter III
of the IBC deals with the liquidation process which
comes into effect upon the failure to come out with a
resolution plan within the prescribed time period or a
resolution plan not being approved. The moratorium
under Section 14 of the IBC comes into effect upon the
Adjudicating Authority passing an order declaring a
moratorium and continues till the completion of
Corporate Insolvency Resolution Processs. Upon the
approval of the resolution plan by the Adjudicating
Authority or upon passing of a liquidation order under
Section 33 of the IBC, the moratorium shall cease to have
effect. After the Adjudicating Authority (NCLT) passes a
liquidation order under section 33(4) of the IBC, a fresh
moratorium in terms of Section 33(5) of the IBC comes
into place.
18. The objective of the liquidation process is to derive
the maximum value from the assets of the corporate
debtor for the benefit of various creditors and other
stakeholders in the company under liquidation. The
objective is not the revival of the company. It is perhaps
for this reason that unlike Chapter II, no time limits have
been provided in Chapter III of the IBC. Therefore,
legislature in its wisdom has decided not to include
„pending suits or legal proceedings‟ within the scope of
moratorium under Section 33(5) of the IBC. To be noted
that even the proviso to Section 33(5) of the IBC only
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uses the word „instituted‟, but does not use the word
„pending‟. Further, in terms of the said proviso, even a
fresh suit or legal proceedings may be instituted by the
Liquidator with the prior approval of the Adjudicating
Authority. So, unlike Section 14 of the IBC, under Section
33(5) of the IBC there is no absolute bar in a suit or legal
proceedings continuing along with the liquidation
proceedings.
19. It is vehemently contended on behalf of the counsel
for the Liquidator that in light of Sections 63 and 231 of
the IBC, the jurisdiction of the Civil Court is barred and
therefore, the present suit cannot be continued as the
claims made in the said suit fall within the jurisdiction of
NCLT. Reliance is also placed on Section 60(5) of the
IBC.
20. A reading of Section 63 of the IBC would reveal that
the bar on the Civil Court is only to „entertain any suit
or proceeding in respect of any matter on which NCLT
has the jurisdiction under this Code‟. This would not
apply to suits, which were already pending before the
commencement of liquidation proceedings. Section 231
of the IBC, inter alia states that no injunction shall be
granted by a Court in respect of action taken in
pursuance to any order passed by the Adjudicating
Authority. The intent is clear that the bar is only in
respect of civil suits filed after an order has been passed
by the Adjudicating Authority. In my view, the aforesaid
bar under Sections 63 and 231 of the IBC would only be
in respect of fresh suits. Sections 63 and 231 of the IBC
cannot be read in manner so as to defeat the provisions
of Section 33(5) of the IBC. If Sections 63 and 231 of the
IBC are interpreted in the manner canvased by the
counsel for the Liquidator, the provision of Section 33(5)
of the IBC would be rendered otiose and the moratorium
under Section 33(5) of the IBC, which was to apply only
in respect of fresh suits would also apply to pending
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suits. This cannot be the intention of the legislature.
Therefore, I do not find any merit in the submission of the
Liquidator that the present suit cannot proceed in view of
Sections 63 or 231 of the IBC.
21. Counsel for the Liquidator has relied upon the Report
of the Insolvency Law Committee dated 20th February,
2020, the relevant portions of which are set out
hereinafter:
“1. STAY ON CONTINUATION OF
PROCEEDINGS1.1. Section 33(5) of the Code bars the institution
of suits or legal proceedings by or against the
corporate debtor without the leave of the
Adjudicating Authority during the liquidation
process. However, it does not bar the resumption
of any such pending suit or legal proceeding. It
was brought to the Committee that this was
causing hindrance to the liquidator’s ability to
conduct the liquidation process in an orderly
manner.
1.2. In this regard, the Committee noted that the
Notes on Clauses for Section 33(5) state that the
legislative intent behind the section was to provide
for “a moratorium on the initiation or continuation
of any suit or legal proceeding by or against the
corporate debtor except proceedings pending in
appeal before the Supreme Court or the High
Court”. Therefore, the omission of pending suits
and legal proceedings of the corporate debtor
from the scope of the bar provided under Section
33(5) seems to be an error. The Committee noted
that even under the corresponding provision of the
Companies Act, 2013, both the commencement of
new suits and legal proceedings and theThis is a digitally signed order.
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continuation of pending suits and legal
proceedings by or against a company, is prevented
once a winding up order is passed or a provisional
liquidator is appointed against it, except with the
leave of the Tribunal.
1.3. Given this, the Committee agreed that this
should be suitably addressed by making requisite
amendments to sub-section (5) of Section 33 so
that, apart from proceedings under Section 52, the
leave of the Adjudicating Authority is also
required for continuing any suit or legal
proceeding by or against a corporate debtor
undergoing liquidation.”
22. In the paragraphs of the Report of the Insolvency
Law Committee extracted above, it has been noted that
the omission of pending suits and legal proceedings of
the corporate debtor from the scope of moratorium
provided under Section 33(5) of the IBC seems to be an
error. Further, the Committee recommended that suitable
amendments should be made to Section 33(5) of the IBC
so that leave of the Adjudicating Authority is also
required for continuing any pending suit or legal
proceeding by or against the corporate debtor
undergoing liquidation. The said report is of 20th
February, 2020 and the IBC has been amended many
times thereafter. However, the legislature in its wisdom
has not made any amendments in respect of Section 33(5)
of the IBC. Therefore, the reliance placed on the Report
of the Insolvency Law Committee is misplaced. It cannot
even be stated that the legislature was not aware of the
omission in view of the fact that the words “pending suit
or legal proceedings” have been specifically used in
Section 14 of the IBC.
23. In any event, the submission of the counsel for the
liquidator that words which are missing from the
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language of Section 33(5) of the IBC can be added by the
Court is completely against the rule of casus omissus, in
terms of which, an omission in a statute cannot be
supplied by judicial interpretation.
24. The Supreme Court in Ebix Singapore Private Ltd v.
Committee Of Creditors Of Educomp Solutions Limited
And Anr., (2022) 2 SCC 401, applying the rule of casus
omissus refused to add words in the language of Section
12-A of the IBC. Similarly, in Babita Lila and Anr., v.
Union of India (2019) 9 SCC 647, the Supreme Court
held that casus omissus cannot be supplied by the Court
where the omissions noticed in a statute had been on
account of conscious legislative intendment. In Padma
Sundara Rao (Dead) And Ors v. State of T.N. And Ors.,
(2002) 3 SCC 533, the Supreme Court held that while
interpreting a provision, the Court only interprets the law
and cannot legislate it. If a provision of law can be
misused, it is for the legislature to amend the same and
the legislative casus omissus cannot be supplied by
judicial interpretative process.
25. The position of law as laid down by the Supreme
Court in Rohitash Kumar And Ors v. Om Prakash
Sharma And Ors., (2013) 11 SCC 451, as summarised in
paragraph 27 of the said judgment is set out below:
“Addition and subtraction of words
27.The court has to keep in mind the fact that,
while interpreting the provisions of a statute, it can
neither add, nor subtract even a single word. The
legal maxim “A verbis legis non est recedendum”
means, “from the words of law, there must be no
departure”. A section is to be interpreted by
reading all of its parts together, and it is not
permissible to omit any part thereof. The court
cannot proceed with the assumption that the
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legislature, while enacting the statute has
committed a mistake; it must proceed on the
footing that the legislature intended what it has
said; even if there is some defect in the
phraseology used by it in framing the statute, and
it is not open to the court to add and amend, or by
construction, make up for the deficiencies, which
have been left in the Act. The Court can only iron
out the creases but while doing so, it must not alter
the fabric, of which an Act is woven. The Court,
while interpreting statutory provisions, cannot add
words to a statute, or read words into it which are
not part of it, especially when a literal reading of
the same produces an intelligible result. (Vide
Nalinakhya Bysack v. Shyam Sunder Haldar [AIR
1953 SC 148] , Sri Ram Ram Narain Medhi v.
State of Bombay [AIR 1959 SC 459] , M. Pentiah
v. Muddala Veeramallappa [AIR 1961 SC 1107] ,
Balasinor Nagrik Coop. Bank Ltd. v. Babubhai
Shankerlal Pandya [(1987) 1 SCC 606 : AIR 1987
SC 849] and Dadi Jagannadham v. Jammulu
Ramulu [(2001) 7 SCC 71] , SCC pp. 78-79, para
13.)”
26. In light of the aforesaid legal principles, even if it is
assumed that there was an omission on behalf of the
legislature in not applying the moratorium under Section
33(5) of the IBC to pending suits, the same cannot be
supplied by the Courts. It is for the legislature to amend
the statute.
27. In view of my finding above that there appears to be
no error or omission in Section 33(5) of the IBC, the
judgements in Guru Gobind Singh Indraprastha
University (supra) and Delhi High Court Bar Association
(supra) cited by the counsel for the Liquidator have no
application in the present case.
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28. Counsel for the Liquidator has relied upon an order
dated 25 th September, 2019 passed by the National
Company Law Appellate Tribunal (NCLAT), New Delhi
in Company Appeal (AT) (Insolvency) No.230 of 2019
titled KSB Shanghai Pump Co. Ltd. v. Lanco InfraTech
Ltd. and Ors. In the said case, the Resolution
Professional in respect of the corporate debtor, invoked
the performance bank guarantees in order to recover the
advance payment. In the appeal before the NCLAT, the
appellants sought a restraint against the invocation of
the bank guarantees. In view of the fact that the
performance bank guarantees had been invoked and the
corporate debtor had received the amount out of the said
guarantees, NCLAT did not interfere with the same and
gave liberty to the appellants to file their claims before
the Appropriate Forum for appropriate relief. No finding
has been given in the aforesaid order whether the bank
guarantees were validly invoked by the Liquidator or not.
This was not a case where a suit had already been filed
challenging the invocation of performance guarantees.
29. In view of the discussion above, I am of the
considered view that the bar under Sections 33(5), 63
and 231 of the IBC will not apply to the present suit and
therefore, the proceedings in the present suit shall
continue.”
3. In view of the abovementioned Judgment, this Court is of the opinion
that the present proceedings can proceed.
4. Accordingly, list on 14.05.2026 for final hearing.
5. The Petitioner is directed to file written submissions not exceeding
eight pages before the next date of hearing. The written submissions must
contain the precise grounds on which the Arbitral Award has been
challenged within the parameters of Section 34 of the Arbitration and
Conciliation Act, 1996, with specific reference to the paragraph numbers in
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the Arbitral Award as well as the page numbers of the documents on which
the Petitioner seeks to place reliance on.
6. Learned Counsel for the Petitioner is further directed to serve an
advance copy of the written submissions to the Respondent, to enable it to
tailor their written submissions accordingly.
7. The Respondent is also directed to file its written submissions before
the next date of hearing.
SUBRAMONIUM PRASAD, J
FEBRUARY 27, 2026
Rahul
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