Court denies extension of sanctioned scheme period under Insolvency and Bankruptcy Code, citing corporate applicant's failure to improve net worth.

The court declined to grant an extension of the sanctioned scheme period under the Insolvency and Bankruptcy Code, 2016, due to the corporate applicant's failure to improve its net worth within the specified timeframe. The absence of provisions in the Code to review or modify such schemes posed a challenge in extending the scheme. The petitioner's efforts post the dissolution of the Board for Industrial & Financial Reconstruction highlighted the complexities arising from legal framework transitions. The court noted the potential violation by the corporate applicant, leading to the presumption of liquidation proceedings under the Code.

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Issues:
Extension of scheme period under Insolvency and Bankruptcy Code, 2016; Direction to prevent recovery proceedings by Commercial Taxes Dept.; Settlement of pending court cases; Relief regarding power supply by WBSEDCL without additional bank guarantee.

Analysis:
1. The petitioner sought an extension of the scheme period under the Insolvency and Bankruptcy Code, 2016, to implement the sanctioned scheme and improve the corporate applicant's net worth. Additionally, a direction was requested to prevent recovery proceedings by the Commercial Taxes Dept. for specific demands.

2. The case involved a sanctioned scheme by the Board for Industrial & Financial Reconstruction (BIFR) earlier, with a cut-off date of 31/12/2002. The BIFR appointed IFCI as the monitoring agency for the scheme's progress.

3. The BIFR, in an order dated 12/12/2013, noted the corporate applicant's inability to turn its net worth positive within the scheme period, leading to the scheme's expiration. The company was directed to submit a Modified Draft Rehabilitation Scheme (MDRS) for extension with detailed justifications.

4. The petitioner submitted the MDRS to the BIFR, as required, and emphasized the scheme's impending end in 2017 with the corporate applicant's net worth still negative as per audited accounts.

5. The impact of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003, and subsequent notifications dissolving the BIFR were crucial in the context of the scheme's continuation and binding nature.

6. The petitioner's attempt to seek relief under the Insolvency and Bankruptcy Code, 2016, post the BIFR's dissolution highlighted the complexities arising from the transition between legal frameworks.

7. Despite the petitioner's efforts to extend the sanctioned scheme, the absence of specific provisions in the Insolvency and Bankruptcy Code, 2016, to review or modify such schemes posed a challenge in granting the requested extension.

8. The inability of the corporate applicant to improve its net worth within the sanctioned scheme period indicated a potential violation, leading to the presumption of liquidation proceedings as per the Insolvency and Bankruptcy Code, 2016.

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