Specialized forum remedy prevails over writ merits in dispute over BIFR scheme concessions and interim protection

Where a specialized forum is already seized of dispute over implementation of concessions under a sanctioned BIFR scheme, the writ court may decline to decide the merits and require the parties to pursue their remedies before that forum. The court found that the company's sickness proceedings had ended after its net worth turned positive and that the dispute was pending before the NCLT, so no substantive direction or observation was made on the tax concession claim. Existing interim protection against coercive action was, however, continued until the NCLT passed appropriate interim orders.

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Issues: Whether the writ court should grant substantive relief in relation to tax concession under the sanctioned BIFR scheme, or leave the parties to agitate the matter before the NCLT while continuing interim protection.

Analysis: The petitioner's grievance arose out of the alleged non-implementation of concessions flowing from the sanctioned scheme under the Sick Industrial Companies regime. The petitioner had already moved the BIFR, and the matter was stated to be pending before the NCLT. The company had also been discharged from the purview of sickness proceedings after its net worth turned positive. In these circumstances, the Court declined to issue any direction or make any observation on the merits of the claim relating to the scheme and held that the parties should pursue all such pleas before the NCLT. The Court also preserved the existing interim protection against coercive action until the NCLT passed appropriate interim orders.

Conclusion: The writ court did not decide the tax concession dispute on merits and left the parties to work out their remedies before the NCLT, while continuing interim protection in favour of the petitioner.

Ratio Decidendi: Where an effective specialized forum is seized of the dispute concerning implementation of a scheme, the writ court may decline to adjudicate the merits and leave the parties to pursue their claims before that forum, while maintaining interim protection if warranted.

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