INDRAJIT MAHANTY,CJ. - (1.)This review petition is filed by one Kalpataru Properties Pvt. Ltd. seeking, inter alia, directions for "review of the observations and conclusions as contained in the Judgement and Order dtd. 14/3/2022 (Annexure-18 supra), more particularly, those observations and conclusions as contained in Paragraphs 8 to 15 thereof, passed in Writ Petition(C)(PIL) No.4 of 2022 (Sri Shubhankar Bhowmik Versus Union of India and Others).."
(2.)At the outset, it has been fairly pointed out by the Learned Counsel for the Review Petitioner that the Review Petitioner was not a party to the original PIL proceedings. However, it is stated that the observations contained in the paragraphs 8 to 15 of the judgement dtd. 14/3/2022 passed in the Writ Petition(C)(PIL) No.4 of 2022 ("Impugned Judgement"), prejudicially and adversely affect the Review Petitioner in an on-going highly contested litigation in which it is a party.
(3.)Before going into the contentions of the parties, the facts may be noted in brief :
3.1 WP(C)(PIL) No.4 of 2022 was filed by the petitioner therein, with, inter alia, the following prayers:

"1. Issue an appropriate Writ, Order or Direction more particularly in the nature of WRIT OF CERTIORARI or any other appropriate writ declaring the provisions of Sec. 3(10) of the Insolvency and Bankruptcy Code, 2016 read with Regulations 9A as ultra vires inasmuch as it fails to define the terms "other creditors" and accordingly, to strike them down on the vice of Article 14 of the Constitution of India, or the impugned provisions may be interpreted harmoniously to include the words "decree holder" as existing in Sec. 3(10) to be at par with "financial creditors" under Regulation 9(a), to save them from unconstitutionality;

2. Issue an appropriate Writ, Order or Direction more particularly in the nature of WRIT OF CERTIORARI or any other appropriate writ declaring that claims filed under a CIRP by "decree holder" under Regulation 9(a) of the CIRP Regulations, be considered at par with claims filed by "financial creditors" and be amenable to all consequential rights available to financial creditors; and/or....."

3.2 When the PIL was heard, the PIL Petitioner had argued that he is a shareholder of public listed companies, who are either creditors and/or corporate debtors in terms Insolvency and Bankruptcy Code, 2016 ("IBC") and he was therefore interested in the petition to that extent. It was further his contention that the issues raised had a wide ranging effect as they would be germane to almost all corporate insolvency resolutions under the IBC. Principally, the issues raised in the PIL dealt with the treatment of "decree holders" who hold decrees against a Corporate Debtor under the insolvency resolution process. To sum it up the contention was that though the IBC includes "decree holders" in the definition of "creditors", it does not prescribe the class of creditors to which the term "decree holder" belongs, and therefore there exists a need to iron out the creases by this Hon'ble Court. It was argued that without such prescription in the IBC, the class of "decree holders" falls into the residual class of "other creditors", which it is stated manifestly arbitrary and therefore violates Article 14.

3.3 In the aforesaid context, we thought it fit to first examine the provisions of law being referred to by the counsel for the PIL Petitioner to see whether even a prima facie case for entertaining the PIL was made out. We therefore heard the counsel for the PIL Petitioner at length before passing the Impugned Order.

3.4 After considering the Statement of Objects and Reasons of the IBC and the relevant authorities, we examined the relevant provisions of the IBC in paragraphs 8 to 15 of the Impugned Judgement. Since the grievance of the Review Petitioner is with these paragraphs of the judgement, the same are reproduced herein below :

"8. In the aforesaid background, we proceed to examine the provisions of the IBC. The word "creditor" is defined in Sec. 3(10) of the IBC which reads as under:

"3(10) "creditor" means any person to whom a debt is owed and includes a financial creditor, an operational creditor, a secured creditor, an unsecured creditor and a decree-holder;"

9. A reading of the aforesaid sec. suggests that the Parliament in its wisdom recognized five types of creditors being "financial creditor" or "operational creditor", "secured creditor", "unsecured creditor" and a "decree holder". A further examination of the provisions reveals that the phrases "financial creditor", "operational creditor" and "secured creditor" are defined in Sec. 5(7), 5(20), and 3(30) respectively. It would also be trite to note that a creditor who does not qualify as a "secured creditor" under Sec. 3(30), would by necessary implication mean an "unsecured creditor". However, the definitions contained in the IBC do not provide any definition for a "decree holder".

10. At first blush, it seems that the aforesaid, as submitted by the counsel for the petitioner, is an inadvertent omission. However, a closer scrutiny of the provisions of the IBC reveals otherwise.

11. Before proceeding to the same, however, it would be trite to understand the rights of a decree holder per se, i.e. dehors the contours of IBC. The right of a decree holder, in the context of a decree, is at best a right to execute the decree in accordance with law. Even in a case where the decree passed in a suit is subject to the appellate process and attains finality, the only recourse available to the decree-holder is to execute the decree in accordance with the relevant provisions of the Civil Procedure Code, 1908. Suffice it to say, that the provisions contained in Order 21 provides for the manner of execution of decrees in various situations. The said provisions also provide for the rights available to judgment debtors, claimant objectors, third parties etc., to ensure that all stake holders are protected. The provisions of the CPC, therefore subjects the rights of a decree-holder to checks and balances that an executing court must follow before the fruits of such decree can be exercised. Given the same, the rights of a decree-holder, subject to execution in accordance with law, remain inchoate in the context of the IBC. This is principally because, the IBC, by express mandate of the moratorium envisaged by Sec. 14(1), puts a fetter on the execution of the decree itself.

12. Sec. 14 provides as under:

"14. (1) Subject to provisions of sub-Sec. (2) and (3), on the insolvency commencement date, the Adjudicating Authority shall by order declare moratorium for prohibiting all of the following, namely:-

(a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;

(b) transferring , encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein;

(c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;

(d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor."

13. Therefore, in terms of Sec. 14(1)(a), the right of the decree-holder to execute the decree in civil law, freezes by virtue of the mandatory and judicially recognized moratorium that commences on the insolvency commencement date. This is because a decree, in a given case may be amenable to challenge by way of an appellate process, and/or by way of objections in the execution process. In that sense, the passing of the decree may be the recognition of a claim of the decree holder, however, the said claim itself is ultimately subject to doubt till the execution proceedings are finalized. For instance, a judgment and decree in a civil suit, may be upheld throughout the appellate chain right up to the Hon'ble Apex Court. However, even that would not automatically entitle the decree holder to the fruits of the decree. The same would still remain, subject to objections in execution proceedings which if allowed, would frustrate the decree. Therefore, whereas the IBC rightly recognizes decree-holders as a class of creditors whose claims need to be acknowledged in a corporate insolvency resolution process, the IBC by express provision of Sec. 14(1)(a) bars execution of a decree by the same decree holder against the corporate debtor.

14. The aforesaid conclusion also finds force in a conjoint reading of the Sec. 14(1)(b) and Sec. 28 of the IBC. Sec. 14(1)(b) provides, inter alia, that the NCLT, on the insolvency commencement date shall declare a moratorium on "transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein;" In the context of an unexecuted decree, the subject matter of the decree, be it money, moveable property, immoveable property, or of any other nature, remains on the books of the corporate debtor. The moratorium envisaged by Sec. 14(1)(b) therefore, expressly bars transfer, encumbering, alienation or disposal of such assets. Seen in the context of the Statement of Objects and Reasons and the Preamble of the IBC, this provision ensures that its stated purpose of achieving preservation and maximization of the assets of a corporate debtor is not defeated. In fact, to ensure that such assets remain protected, even whilst in the hands of an Interim Resolution Professional or a Resolution Professional, as the case may be, Sec. 28(1)(d), creates a further fetter and provides that a resolution professional, during the corporate insolvency process, shall not "record any change in ownership interest of the corporate debtor", without prior approval of the Committee of Creditors.

15. A reading of the aforesaid provisions makes it clear that, in effect, an unexecuted decree, in the hands of a decree holder under the IBC regime, cannot be executed. At best, a decree signifies a claim that has been judicially determined and in that sense is an "admitted claim" against the corporate debtor. Therefore, the IBC rightly categorises a decree-holder, as a creditor in terms of the definition contained in Sec. 3(10). Execution of such a decree, is however subject to the fetters expressly imposed by the IBC (in addition to and over and above the requirements and limitations of the execution process under the CPC), which cannot be wished away."

3.5 Being aggrieved by the Impugned Judgement, the PIL Petitioner challenged the same by way of SLP (C) 6104 of 2022. The Hon'ble Supreme Court, by its order dtd. 11/4/2022, was pleased to dismiss the said SLP in the following terms:

"We are not inclined to interfere with the impugned judgement.

The special leave petition is dismissed.

Pending application stands disposed of."

3.6 The Review Petitioner submits, that at this stage one news item titled as "Decree Holders Can't be Treated at Par With Financial Creditors Under IBC : Supreme Court Upholds HC Verdict" was flashed on LiveLaw on 12/4/2022. The Review Petitioner became aware of the order dtd. 14/3/2022 on 20/4/2022 and thereafter realized that "the PIL namely, WP(C) No.4 of 2022 has been dismissed, but the observations and the conclusions made therein would cause immense loss, damage and prejudice to the Review Petitioner." Being aggrieved by the aforesaid, the Review Petitioner challenged the Impugned Judgement before the Hon'ble Supreme Court by way of SLP (C) Diary No.14856/2022. The said SLP was dismissed as withdrawn by an order dtd. 21/5/2022, in the following terms :

"Against the impugned order a special leave petition already stands dismissed. The petitioner was not a party in those proceedings. Learned senior counsel for the petitioner states that there are some observations from paragraph 13 to 15 which may effect pending litigation relating to the petitioner. If that be the position, it is for the petitioner to approach the High Court to seek appropriate relief.

The special leave petition is dismissed with the aforesaid liberty."

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