Tribunal denies stay in liquidation proceedings involving government company under IBC 2016

The tribunal dismissed the Interlocutory Application seeking to quash and stay the present liquidation proceedings involving a government company. The tribunal held that the Adjudicating Authority had jurisdiction, and there was no provision to stay the proceedings under the IBC 2016 once a liquidation order was passed. The tribunal noted that the issues raised were already under consideration by various High Courts, including the Hon'ble Guwahati High Court. Consequently, the tribunal maintained the status quo of the liquidation proceedings, denying the requested relief.

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Issues:
1. Quashing of present liquidation proceedings
2. Stay of present liquidation proceedings
3. Applicability of I & B Code to government companies
4. Violation of Article 21 of the Constitution
5. Challenge before the Hon'ble Guwahati High Court

Quashing of present liquidation proceedings:
The applicant sought to quash the liquidation proceedings, arguing that the Adjudicating Authority lacked jurisdiction. However, the applicant could not provide legal grounds for this claim during the hearing. The applicant also referenced a similar matter before the Hon'ble Guwahati High Court, indicating that the issue was already under consideration by other parties. As a result, the tribunal declined to consider this prayer, noting that the matter was already being addressed by other courts.

Stay of present liquidation proceedings:
The applicant requested a stay on the liquidation proceedings, contending that the Fundamental Rights of the workers and employees would be violated if the proceedings continued. However, the tribunal highlighted that once a liquidation order is passed, there is no provision under the IBC 2016 to stay the proceedings. The tribunal emphasized that the issue of passing a liquidation order against a Government Company was already under judicial review in various High Courts. Since the order of liquidation had been confirmed by the Hon'ble NCLAT, the tribunal rejected the prayer for a stay on the proceedings.

Applicability of I & B Code to government companies:
The applicant argued that the I & B Code should not apply to government companies, citing pending cases before the Hon'ble Bombay High Court and the Hon'ble Guwahati High Court. The applicant contended that a Government Company cannot be taken over by a Resolution Professional/Liquidator under the IBC Code. However, the tribunal did not find merit in this argument and emphasized that the matter was already sub judice before various High Courts.

Violation of Article 21 of the Constitution:
The applicant raised concerns about the violation of Article 21 of the Constitution due to non-payment of salaries leading to severe consequences for employees. The tribunal acknowledged the gravity of the situation but reiterated that the legal proceedings and challenges were already in progress before the appropriate forums. The tribunal did not find grounds to intervene based on this argument alone.

Challenge before the Hon'ble Guwahati High Court:
The applicant highlighted challenges against the violation of the IBC before the Hon'ble Guwahati High Court. The tribunal acknowledged the ongoing legal challenges and emphasized that the matter was being actively considered by the courts. As a result, the tribunal did not grant the requested relief, as the issues were already under judicial scrutiny. Ultimately, the tribunal dismissed the Interlocutory Application, maintaining the status quo of the liquidation proceedings.

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