WRIC/34496/2019 of RAKESH JAIN AND ANOTHER Vs STATE OF U.P. AND 14 OTHERS on 11 May 2026

1. Heard Sri Nikhil Agarwal, learned Senior Advocate assisted by Sri Shikhar Kaushal, learned counsel for the petitioners, Sri M.N.Singh, learned counsel appearing for respondent nos. 2 and 9, Sri Sanjay Kumar Mishra along with Ms.Josheca Mukerji, learned counsel for respondent no. 15 and Ms. Shruti Malviya, learned State Law Officer appearing for the State respondents.

2. The petitioners being the creditors of respondent no. 15 who had taken land on lease from the Ghaziabad Development Authority, are aggrieved by the action of the State revenue authorities including the Tehsildar namely the respondent no. 5 for taking coercive measures against the petitioners as illegal detention of the petitioner no. 1 took place at the instance of the Ghaziabad Development Authority while pursuing the recovery of dues and he was also coerced to sign undated cheques as security towards the outstanding dues of respondent no. 15, the Ghaziabad Development Authority.

3. It is contended by learned Senior Advocate that during the pendency of this petition the insolvency proceedings have come to be drawn under the Insolvency and Bankruptcy Code, 2016 with the appointment of are Amit Agarwal as a resolution professional and accordingly notices got issued to all the creditors and claimant in which the Ghaziabad Development Versus Counsel for Petitioner(s) : Abhinav Gaur, Anoop Trivedi (Senior Adv.), Nikhil Agrawal, Prabhav Srivastava, Shalini Mishra, Shikhar Kaushal Counsel for Respondent(s) : Mahesh Narain Singh, C.S.C., Sanjay Kumar Mishra, Vrindavan Mishra Rakesh Jain And Another .....Petitioner(s) State Of U.P. And 14 Others .....Respondent(s)

Authority's claim have come to be acknowledged and they are now part of the Committee of the creditors who had the ultimate responsibility to approve the plan.

4. It is submitted by Sri Agarwal that in view of the fact that the proceedings have come to be drawn under the Insolvency and Bankruptcy Code, 2016, the moratorium as contemplated under Section 14, has come into force and, therefore, no secured creditor whosoever having the dues against respondent no. 15, can set up any claim outside the insolvency proceedings and hence the proceedings now drawn by the revenue authorities at the instance of the Ghaziabad Development Authority are liable to be rendered unsustainable.

5. It is contended that in this regard, therefore as on date no individual claims can be set up except to resolution professional and all such claims are to abide by the resolution plan which would ultimately after approval of the company of the creditors would have to be approved by the National Company Law Tribunal.

6. It is further contended that while the petitioners had to surrender their passport in terms of the interim order of this Court on 05.11.2019, the same should now be released and if it has expired the petitioner may get renewed as per the provisions contained under the Passport Act and Rules framed thereunder as well as the notification issued by the Ministry of Home and External Affairs in furtherance of those provisions.

7. Learned counsel appearing for the respondent nos. 2 and 9 have also not disputed the proceedings drawn under the Insolvency and Bankruptcy Code, 2016 so also the learned Advocate appearing for respondent no. 15 submits that now all claims against respondent no. 15 depend upon the resolution plan to be prepared by the resolution professional subject to the approval of the Company of Creditors and final approval by the National Company Law Tribunal.

8. Learned State Law Officer representing the State would also agree to this that once insolvency proceedings have come to be drawn to clear the debts of the creditors as per resolution plan prepared by the resolution professional, inasmuch as the commencement of moratorium under WRIC No. 34496 of 2019

Section 14 of the Code, 2016. Thus he agrees that no recovery as such now can be pursued by the revenue authorities separately under the revenue code. Learned State Law Officer does not dispute also that the passport which was directed to be deposited by this Court deserves to be released and the petitioners' right to travel would all depend upon the provisions of the Passport Act, 1967 and the rules framed thereunder.

9. In view of the above, we quash the recovery certificate dated 28.10.2017 and consequential citation dated 28.11.2017 and hold that all the creditors of respondent no. 15 would abide by the resolution plan which may be approved by the National Company Law Tribunal. The passport that was directed to be deposited by the petitioner under the order of this Court dated 05.11.2019 shall immediately be released and handed over to the petitioner. The amount already deposited by the petitioner which has been invested in the fixed deposit scheme of a Nationalized Bank shall abide by the final outcome of the resolution plan. May 12, 2026 Pratima WRIC No. 34496 of 2019

(Indrajeet Shukla,J.) (Ajit Kumar,J.) Digitally signed by :- PRATIMA AGRAHARI High Court of Judicature at Allahabad