IBC insolvency trigger under Section 9 does not need prior Central Government consent for a taken-over tea company.

Section 16G(1)(c) of the Tea Act, 1953 restricts winding up and receivership proceedings in respect of a tea undertaking taken over under the Act, but an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 is a trigger for the corporate insolvency resolution process, not a winding up action. Because the IBC is directed to reorganisation and resolution of the corporate debtor as a going concern, it operates in a different field from the Tea Act restriction. On that basis, prior consent of the Central Government was not required before initiating Section 9 proceedings against the tea company.

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Issues: Whether an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 against a tea company under management control taken over under the Tea Act, 1953 required prior consent of the Central Government under Section 16G(1)(c) of the Tea Act, 1953.

Analysis: Section 16G(1)(c) of the Tea Act, 1953 places a restriction on proceedings for winding up or appointment of a receiver in respect of a company whose tea undertaking or unit has been taken over. An application under Section 9 of the Insolvency and Bankruptcy Code, 2016 is not a winding up proceeding but a proceeding to trigger the Corporate Insolvency Resolution Process. The statutory scheme of the Insolvency and Bankruptcy Code, 2016 is directed towards reorganisation and resolution of the corporate debtor as a going concern, and therefore operates in a different field from the winding up restriction contained in the Tea Act, 1953. In that view, no inconsistency arose calling for the application of Section 238 of the Insolvency and Bankruptcy Code, 2016 in the manner suggested.

Conclusion: Prior consent of the Central Government was not required for initiation of proceedings under Section 9 of the Insolvency and Bankruptcy Code, 2016 against the tea company.

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