Court allows petitioner to withdraw and approach Supreme Court, extends asset restraint orders for 21 days.

The court disposed of the writ petition, allowing the petitioner to withdraw and approach the Supreme Court. The interim orders restraining the transfer, alienation, or creation of third-party rights in the assets of the third respondent and its subsidiaries were extended for 21 days to enable the petitioner to seek appropriate relief from the Supreme Court. The court emphasized the need for an authoritative pronouncement on the issues pending before the Supreme Court and other forums.

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Issues Involved:
1. Constitutionality of Section 4(b) of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 read with Section 252 of the Insolvency and Bankruptcy Code, 2016.
2. Implementation of Supreme Court's directions dated 13-11-2014 and 18-11-2016.
3. Legality of asset sales and lease transactions by the third respondent.
4. Appointment of a Court Receiver for preservation of assets.
5. Interim relief against sale of properties by the third respondent and its subsidiaries.

Detailed Analysis:

1. Constitutionality of Section 4(b) of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 read with Section 252 of the Insolvency and Bankruptcy Code, 2016:
The petitioner challenged the constitutionality of Section 4(b) of the Repeal Act, 2003 read with Section 252 of the IBC, 2016, arguing that it abates proceedings before BIFR & AAIFR without providing an efficacious remedy for implementing Supreme Court’s directions. The court noted that the workmen could invoke the jurisdiction of the NCLT under Sections 6, 8, and 9 of the Code and that the NCLT has the power to examine under-valued transactions under Sections 47 and 49 of the Code without being restricted by a fixed limitation period. The petitioner did not press the prayer challenging the vires of Section 4(b) of the Repeal Act, 2003, and agreed to approach the NCLT for relief.

2. Implementation of Supreme Court's directions dated 13-11-2014 and 18-11-2016:
The Supreme Court in its judgment dated 13-11-2014 had directed the BIFR to determine whether the net worth of the third respondent had turned positive and to consider the scheme for revival of the company. The transfer of Katihar property was also to be assessed by the BIFR. However, before the BIFR could decide, the Repeal Act was enforced, and proceedings before the BIFR abated. The Supreme Court's order dated 18-11-2016 in contempt proceedings found the third respondent and its Directors/servants guilty of violating the interim order dated 8-5-2014 but did not invalidate the sale deed registered on 2-7-2014. The court observed that the directions given by the Supreme Court could be examined and considered under Sections 47 and 49 of the Code by the NCLT.

3. Legality of asset sales and lease transactions by the third respondent:
The petitioner sought to declare several transactions, including the sale of assets at Saifganj, Katihar, Bihar, and lease transactions, as void ab initio. The court noted that the third respondent had transferred immovable properties to its subsidiaries without cash consideration, and these subsidiaries had further sold the properties. The court expressed concern about the lack of clarity on the sale consideration and the need for scrutiny of these transactions. The court directed that the interim orders restraining the transfer, alienation, or creation of third-party rights in the assets of the third respondent and its subsidiaries would continue.

4. Appointment of a Court Receiver for preservation of assets:
The petitioner sought the appointment of a Court Receiver for the preservation of the assets of JK Jute Mills Company Ltd. The court did not specifically address the appointment of a receiver but emphasized the need for interim protection against the sale, transfer, and creation of third-party interests in the assets of the third respondent and its subsidiaries to protect the interests of the workmen/ex-workmen.

5. Interim relief against sale of properties by the third respondent and its subsidiaries:
The court restored the interim orders dated 16-6-2017, 6-7-2017, and 21-8-2017, restraining the third respondent and its subsidiaries from transferring, alienating, or creating third-party rights in any of its assets. The court also noted that the Supreme Court had directed the third respondent to maintain the status quo regarding its assets. The court extended the stay order restraining the subsidiaries of the third respondent from alienating, transferring, or creating third-party interests in respect of the capital assets for a period of 21 days to enable the petitioner and others to seek appropriate orders from the Supreme Court.

Conclusion:
The court disposed of the writ petition, allowing the petitioner to withdraw and approach the Supreme Court. The interim orders restraining the transfer, alienation, or creation of third-party rights in the assets of the third respondent and its subsidiaries were extended for 21 days to enable the petitioner to seek appropriate relief from the Supreme Court. The court emphasized the need for an authoritative pronouncement on the issues pending before the Supreme Court and other forums.

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