BIFR scheme treated as deemed resolution plan; contravention and liquidation relief must be pursued before NCLT.

A BIFR-sanctioned rehabilitation scheme that remained under implementation was treated as a deemed approved resolution plan under the Insolvency and Bankruptcy Code, 2016, because the removal of difficulties order brought such schemes within section 31(1). On alleged contravention of that scheme, the appropriate remedy lay before the National Company Law Tribunal under the Code's liquidation framework, since section 33 governs relief for a person prejudicially affected by breach of a resolution plan. The High Court therefore directed transfer of the pending records and proceedings to the NCLT for further action under the insolvency regime.

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Issues: (i) Whether a scheme sanctioned by BIFR and under implementation is to be treated as a deemed approved resolution plan under the Insolvency and Bankruptcy Code, 2016. (ii) Whether, upon alleged contravention of such sanctioned scheme, the proper course is for the petitioner to approach the National Company Law Tribunal for liquidation relief. (iii) Whether the pending proceedings should be transferred from the High Court to the National Company Law Tribunal.

Issue (i): Whether a scheme sanctioned by BIFR and under implementation is to be treated as a deemed approved resolution plan under the Insolvency and Bankruptcy Code, 2016.

Analysis: The removal of difficulties order under the Insolvency and Bankruptcy Code, 2016 expressly provided that any scheme sanctioned under section 18 of the Sick Industrial Companies (Special Provisions) Act, 1985, and under implementation, shall be deemed to be an approved resolution plan under section 31(1) of the Code. The statutory consequence was that such a sanctioned scheme fell within the framework of Part II of the Code.

Conclusion: Yes. The sanctioned BIFR scheme was treated as a deemed approved resolution plan under the Insolvency and Bankruptcy Code, 2016.

Issue (ii): Whether, upon alleged contravention of such sanctioned scheme, the proper course is for the petitioner to approach the National Company Law Tribunal for liquidation relief.

Analysis: Once the scheme was treated as a resolution plan, the remedy for its contravention was governed by section 33 of the Insolvency and Bankruptcy Code, 2016. That provision enables a person prejudicially affected by the contravention to apply to the adjudicating authority for a liquidation order. The proper forum identified for such relief was the National Company Law Tribunal.

Conclusion: Yes. The petitioner was required to seek liquidation relief before the National Company Law Tribunal.

Issue (iii): Whether the pending proceedings should be transferred from the High Court to the National Company Law Tribunal.

Analysis: In view of the statutory scheme under the Insolvency and Bankruptcy Code, 2016 and the specialised jurisdiction of the National Company Law Tribunal, the High Court directed transfer of the records and proceedings so that appropriate proceedings could be initiated before that forum.

Conclusion: Yes. The records and proceedings were ordered to be transferred to the National Company Law Tribunal, Mumbai.

Final Conclusion: The dispute was not decided on the merits of winding up in the High Court, and the parties were relegated to the insolvency forum under the Insolvency and Bankruptcy Code, 2016 for further relief.

Ratio Decidendi: A BIFR-sanctioned and subsisting rehabilitation scheme is to be treated as a deemed approved resolution plan under the Insolvency and Bankruptcy Code, 2016, and any alleged contravention of such scheme must be pursued before the National Company Law Tribunal under the liquidation mechanism provided by the Code.

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