IBC Section 63: Civil court not to have jurisdiction

Section 63 of Insolvency and Bankruptcy Code, 2016: Civil court not to have jurisdiction

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

No civil court or authority shall have jurisdiction to entertain any suit or proceedings in respect of any matter on which National Company Law Tribunal or the National Company Law Appellate Tribunal has jurisdiction under this Code.

Legal Commentary & Landmark Judgments: Section 63

Section 63 enacts an express statutory bar ousting the jurisdiction of civil courts over any matter in respect of which the NCLT or NCLAT has jurisdiction under the Code, prohibiting civil injunctions.

Absolute Civil Court Jurisdiction Bar: No civil court or authority shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the National Company Law Tribunal or the National Company Law Appellate Tribunal has jurisdiction under this Code.
Injunction Prohibition: No injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred on the NCLT or NCLAT under this Code.
Primacy of Insolvency Adjudication: Ensures that insolvency resolution, asset sales, and resolution plan implementations cannot be paralyzed by civil injunction suits.

Key Landmark Precedents:

Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta (2021) 7 SCC 209: The Supreme Court held that Section 63 read with Section 238 confers exclusive, overriding jurisdiction upon the NCLT over all matters arising out of or in relation to the insolvency of the corporate debtor, ousting civil courts.
Embassy Property Developments Pvt. Ltd. v. State of Karnataka (2020) 13 SCC 308: Affirmed that civil courts cannot interfere with the statutory processes of the NCLT, while delineating public law remedies under Article 226.

Courtroom Practice & Strategic Litigation Guidance:

If a disgruntled vendor, promoter, or tenant files a civil suit for permanent injunction in a District Court seeking to stall a CIRP asset sale or restrain the RP from taking possession, file an application under Order VII Rule 11(d) CPC. The plaint is barred by law under Section 63.