High Court Transfers Winding-Up Petition to NCLT: Compliance with IBC Schemes

The Bombay High Court transferred a winding-up petition to the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code. The court found that contravention of a Rehabilitation Scheme sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) allowed for application to the NCLT for liquidation. Emphasizing compliance with the IBC, the court highlighted the importance of adhering to sanctioned schemes and clarified that schemes approved under the previous Act would be considered approved under the IBC. The judgment underscored the necessity of following IBC provisions and disposed of the petition and BIFR Recommendation.

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Issues:
1. Jurisdiction of the Bombay High Court to hear the winding-up petition in light of the Insolvency and Bankruptcy Code, 2016.
2. Contravention of the Rehabilitation Scheme sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) by the company.
3. Transfer of the case to the National Company Law Tribunal (NCLT) for further consideration under the Insolvency and Bankruptcy Code.

Analysis:
Issue 1:
The petitioner sought winding up of the company based on non-payment under an Inter Corporate Deposit. The company raised a jurisdictional objection citing the Insolvency and Bankruptcy Code, 2016, and the Order of 2017. The Court considered the provisions and noted that any scheme sanctioned under the Sick Industrial Companies (Special Provisions) Act, 1985, would be deemed approved under the IBC. As per Section 33 of the IBC, contravention of a resolution plan allows for an application to the NCLT for a liquidation order. The Court decided to transfer the matter to the NCLT as per the IBC provisions.

Issue 2:
The BIFR sanctioned a Rehabilitation Scheme binding on all creditors, settling the petitioner's claim at a reduced amount. The company failed to pay the agreed sum within the specified time, leading to a contravention of the Scheme. The petitioner sought winding up due to this non-compliance. The Court highlighted the importance of adhering to the sanctioned Scheme and the consequences of contravention under the IBC, leading to the decision to transfer the case to the NCLT for further action.

Issue 3:
The Court emphasized the significance of the IBC (Removal of Difficulties) Order of 2017, which addressed challenges arising from the repeal of the Sick Industrial Companies Act. The Order clarified that schemes sanctioned under the previous Act would be considered approved under the IBC. It outlined the process for dealing with contraventions of such schemes, ultimately directing the transfer of the case to the NCLT for appropriate action. The judgment disposed of the petition and BIFR Recommendation, highlighting the necessity of compliance with the IBC provisions in such matters.

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