Proceedings U/S 37 A Of FEMA Can’t Be Continued During Moratorium U/S 33(5) Of IBC: Calcutta High Court

The Calcutta High Court bench of Justice Jay Sengupta has held that once a liquidation order against the Corporate Debtor is passed, all proceedings including those pending at the time of such order under the Foreign Exchange Management Act, 1999 (FEMA) cannot be continued, nor can any new proceedings be initiated, in view of the bar under Section 33(5) of the Insolvency and Bankruptcy Code, 2016 (Code). This is further reinforced by the non obstante clause under Section 238 of the Code, which gives the Code overriding effect over conflicting provisions, including those of FEMA.

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