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of <h1>Appeal Denied: Non-compliance with Insolvency Scheme Leads to Liquidation</h1> <h3>M/s. Hada Textile Industries Limited Versus The Sales Tax Officer, Kolkata, The Additional Commissioner, Commercial Taxes, Kolkata, The Dy. Commissioner, Commercial Taxes, West Bengal, Official Liquidator, Associated Pulp & Paper Mills Ltd., Ahmedabad, Mangaldas & Co, Mumbai, Cotton Corporation of India, Mumbai, Shaktigarh Textile Industires Ltd., West Bengal State Electricity, Kolkata, The Chairman & Managing Director, New Delhi, The General Manager, IFCI Limited, Kolkata, The Additional Commissioner, Commercial Taxes, West Bengal And Union of India, Ministry of Corporate Affairs, New Delhi</h3> M/s. Hada Textile Industries Limited Versus The Sales Tax Officer, Kolkata, The Additional Commissioner, Commercial Taxes, Kolkata, The Dy. Commissioner, ... Issues:1. Appeal against refusal to extend the scheme period by the Adjudicating Authority.2. Interpretation of provisions of Sick Industrial Companies (Special Provisions) Act, 1985 and Insolvency and Bankruptcy Code, 2016.3. Applicability of the scheme sanctioned under the SICA Repeal Act, 2003 in light of the I&B Code.4. Review of the scheme under the I&B Code and consequences of failure to meet scheme obligations.Analysis:The appeal was filed by 'M/s. Hada Textile Industries Ltd.' against the decision of the Adjudicating Authority refusing to extend the scheme period prepared by BIFR under the Sick Industrial Companies (Special Provisions) Act, 1985. The appellant sought an extension to implement the scheme and prevent recovery proceedings by the Government of West Bengal. The BIFR had earlier sanctioned a scheme with a cutoff date of December 31, 2002, which expired due to the company's inability to turn its net worth positive. The appellant submitted a modified draft rehabilitation scheme (MDRS) for extension, citing the provisions of the SICA Repeal Act, 2003, which saved the approved scheme from abatement.The Ministry of Corporate Affairs amended the SICA Repeal Act, 2003, in line with the I&B Code, deeming sanctioned schemes as resolution plans under the I&B Code. The Adjudicating Authority held that the scheme could be dealt with under the I&B Code's provisions, and failure to meet obligations would lead to liquidation proceedings. The Tribunal concurred with the Authority's finding that no relief could be granted to the appellant due to the absence of provisions for reviewing schemes sanctioned under the I&B Code. The appeal was dismissed, emphasizing the lack of merit and no cost implications.In conclusion, the judgment delves into the interplay between the provisions of the SICA Repeal Act, 2003, and the I&B Code, highlighting the implications of failing to adhere to sanctioned schemes and the limitations on seeking relief under the I&B Code. The decision underscores the importance of compliance with scheme obligations and the legal consequences of non-compliance in the context of insolvency and bankruptcy proceedings.
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