TaxTMI 
TaxTMI 
2017 (7) TMI 580
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....ith learned Senior Counsels Mr. Saurabh Soparkar, and Mr. Mihir Joshi, with learned advocates Mr. Keyur Gandhi for M/s. Nanavati Associates, Mr. Mahesh Agrawal, Mr. Nisarg Desai, Mr. Raheel Patel and Mr. Shriraj Khambete for the petitioner on 7.7.2017 and 12.7.2017. 2. Heard learned Senior Counsel Mr. Darius Khambhatta, with learned advocates Mr. Amar N Bhatt, Mr.Rajendra Barot, Mr. Nishanth Shashidharan, and Mr. Vivek Shetty for the Respondent No. 1. 3. Heard learned Senior Counsel Mr. Ravi Kadam, with learned Senior Counsel Mr. Anshin Desai, with learned advocate Mr. Nirag Pathak, Mr. Ameya Gokhle, and Ms. Grishma Ahuja for M/s. Shardul Amarchand Mangaldas & Co., for the respondent No.2. 4. Heard learned Senior Counsel and Advocate General Mr. Kamal B. Trivedi, with learned Senior Counsel Mr. Rashesh Sanjanwala, with Mr. Sandeep Singhi with Mr. Siddharth Joshi for M/s. Singhi & Co. for the respondent No.3 opposing the petition on 12.7.2017 and 13.7.2017. 5. Heard learned Senior Counsels Mr. Mihir Thakore and Mr. Darius Khambhatta, in reply on 13.7.2017 & 14.7.2017. Perused the record including notes of submissions. 6. The petitioner Essar Steel India Limited has invoked juri....
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....m fit and proper in the facts and circumstances of the case. 9. Since the main challenge in the petition is decision of June 13, 2017 in the form of press release by the RBI, it would be relevant to recollect its contents, as on 13.06.2017; because it has been modified/corrected on July 08, 2017; after the order dated 4.7.2017 by this Court, calling upon RBI to initially explain that what they mean by "Such cases will be accorded priority by the National Company Law Tribunal", which is a statement in such Press release, which reads thus: "Date : Jun 13, 2017 RBI identifies Accounts for Reference by Banks under the Insolvency and Bankruptcy Code (IBC) The Reserve Bank of India had issued a Press Release on May 22, 2017 outlining the steps taken and those on the anvil pursuant to the promulgation of the Banking Regulation (Amendment) Ordinance, 2017. The Press Release had mentioned inter alia that the RBI would be constituting a Committee comprised majorly of its independent Board Members to advise it in regard to the cases that may be considered for reference for resolution under the Insolvency and Bankruptcy Code, 2016 (IBC). 2. An Internal Advisory Committee (IAC) was accor....
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.... NCLT has to give priority to cases filed by the directives of RBI against the cases, which are filed by other creditors or petitioners before the NCLT. 11. Therefore, this Court has to call upon the RBI to explain their stand on returnable date 7.7.2017. However no explanation has come forward on record on 7.7.2017 but learned counsel for the RBI has admitted that there is mistake on the part of the RBI and seek apology and convey sorrow on behalf of RBI for such drafting, submitting that there is improper drafting but not the intention as is visualized from the para 5 of such press release dated 13.6.2017 and confirm that RBI will issue corrigendum to delete such line. In turn RBI has issued corrigendum on July 8, 2017 (page 942 with petition), and disclosed such fact on record by way of affidavit dated 13.7.2017 submitting that: "2. Respondent No.1 issued a corrigendum dated July 8, 2017 to its press release dated June 13, 2017 bearing No.2016-2017/3363 titled "RBI identifies Accounts for Reference by Banks under the Insolvency and Bankruptcy Code (IBC)" (the Press Release"), whereby the sentence "Such cases will be accorded priority by the National Company Law Tribunal (NCLT....
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....t No.1 has placed on record (page No. 948) the stand of RBI that; "pursuant to the recommendations of the Internal Advisory Committee (IAC) (which held its meeting on June 12,2017), RBI took the decision which is contained in the Press Release dated June 13,2017 (Annexure A, Pg.30). There is no other document in which the decision to issue the press release has been recorded. There are subsequent specific directions issued to Banks, akin to the one issued by the RBI to SBI which is produced by the Petitioner at Page 947 of the Additional Affidavit dated July 14, 2017." Therefore, it becomes clear and certain that the Reserve Bank of India is under the impression that now when jurisdiction of matters pertaining to Company Law has been transferred to NCLT by enacting IBC, the NCLT has to follow their advice and directions. This is a serious issue because irrespective of factual details and merits against any borrower or any litigant, the basic Constitutional mandate is quite clear that the adjudicating authorities; either judicial authorities, or even quasi-judicial authorities; are not supposed to be guided by the advises or directions of the administrator in form of Government o....
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....ompanies to initiate insolvency resolution process in respect of a default, under the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC). It also enables the Reserve Bank to issue directions with respect to stressed assets and specify one or more authorities or committees with such members as the Bank may appoint or approve for appointment to advise banking companies on resolution of stressed assets. 3. Immediately upon the promulgation of the Ordinance, the Reserve Bank issued a directive bringing the following changes to the existing regulations on dealing with stressed assets. i. It was clarified that a corrective action plan could include flexible restructuring, SDR and S4A. ii. With a view to facilitating decision making in the JLF, consent required for approval of a proposal was changed to 60 percent by value instead of 75 percent earlier, while keeping that by number at 50 percent. iii. Banks who were in the minority on the proposal approved by the JLF are required to either exit by complying with the substitution rules within the stipulated time or adhere to the decision of the JLF iv. Participating banks have been mandated to implement the decision of JLF wit....
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....nager Press Release: 2016-2017/3138 On perusal of such press release dated 22.5.2017 makes it clear that in fact a decision is taken to change the percentage or value of Nonperforming Accounts (in short 'NPA') from 75% to 60% on or before 22.5.2017, but at the same time, it is surprising to note that RBI has conveyed the Banks that the Boards of Banks were advised to empower their executives to implement Joint Lenders' Forum (in short 'JLF') decisions without further reference to them. Therefore, it seems that the RBI wants Bank's officers to act upon the decision of JLF, and take steps for its implementation, without referring such decision to its own Board of Directors. It may be an administrative issue, but it speaks for itself. Similarly, there are some directions regarding restructuring so as to include flexible restructuring, including Strategic Debt Restructuring (SDR) and Scheme for Sustainable Structuring of Stressed Assets (S4A). Since its reference is there in impugned press release dated 13.6.2017, it cannot be ignored when bare perusal of such press release gives above image about the functioning of RBI and, therefore, it is relevant to record it here because ultima....
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....ry circulars of RBI and considering the irrelevant factors viz the quantum of debt completely ignoring the stress faced by the steel industry as a whole in India. 2) On a true and correct interpretation of Section 35AA of BRA, the Central Government is required to authorize the Reserve Bank of India to issue directions to any banking company or companies to initiate insolvency resolution process in respect of a default, under the provisions of Insolvency and Bankruptcy Code. The above section therefore implies that in each case of default, the RBI will have to come to a subjective satisfaction based on objective facts to give such directions to the Banking Company and the Central Government cannot give general direction to the Banking Company to initiate insolvency proceedings in respect of various defaults. The RBI has not considered specific cases of defaults before issuing authorization and consequently their authorization, which is generic in nature, is bad. Without prejudice to the aforesaid, the petitioner submits that each case of default will have to be considered on facts by the RBI and only after it considers the objective facts relating to the defaulting company that i....
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....ever have been classified in category falling under para 3 of the circular dated 13.06.2017 when as late as on 13.06.2017 itself, the JLF was considering the finer details of the proposal for restructuring the debt of the Petitioner. Classifying the petitioner in para 3 and not para 4 is clearly arbitrary, discriminatory and violative of Article 14 of the Constitution of India as the classification has no rational nexus to the object sought to be achieved viz. restructuring of debt. 4) The Petitioner further submits that the Petitioner's case is most eminently suited to be classified under para 4 as the resolution plan was under process. To classify the Petitioner in para 3 is to treat the Petitioner dissimilarly as compared to others who have been given 6 months time to finalize the resolution process. The Petitioner submits that there is no reasonable basis applied for classification into two classes. The only criteria adopted is the quantum of debt which has no rational nexus to the object sought to be achieved viz. restructuring of the debt and survival of the Company. For the purpose reliance is placed on the following decisions i. State of West Bengal v. Anwar Ali Sarkar ....
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....onable person would come to a conclusion that the progress achieved by the Company including in particular repayment of Rs. 3500 Crores would show that the resolution process between the Banks and the Petitioner is eminently possible to be achieved. b) The Petitioner has its operations in six locations i.e., Hazira (Gujarat), Vishakamatnam (Andhra Pradesh), Kirundal (Chattisgarh), Paradeep (Odisha), Dabuna (Odisha) and Pune (Maharashtra). All the plants in these six locations spread over 5 states are operational. There are atleast 8 finished products being manufactured by the Petitioner. Such as HRC, plates, pipes, pellets, etc. These manufacturing units given direct employment to 4500 persons. Sudden change of management of these vast operations spread all over India from the Board of Directors to a single individual i.e., the Insolvency Resolution Professional is likely to disrupt the smooth functioning and operations of the Company. It is in the interest of Bankers and all stakeholders that the Company continues to operate smoothly without any interruption. c) The Petitioner also has long term contracts with various customers to supply its finished products. The business and....
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....AB of BRA have been inserted to enable the Government of India to authorize Reserve Bank of India to give necessary directions in respect of specific default to initiate Insolvency Resolution Process. From the language of above two Sections, it is evident that unless a Directive is issued by Reserve Bank of India on a Bank, the Bank is not entitled to initiate Insolvency Resolution Process. It is evident that no Directive is issued to the Standard Chartered Bank to initiate Insolvency Resolution Process. This apart, if the Petitioner's contention is accepted that it should be classified in para 4, then there should be specific Directive by the Reserve Bank of India that the Banks should finalize the restructuring within six months. This Directive should equally apply to the Standard Chartered Bank and would be binding on it. It would be mandatory for the Standard Charted Bank to consider the restructuring proposal and cannot initiate any Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016 for a period of six months. Without prejudice to the above, the Petitioner submits that Standard Chartered Bank was also in active discussion and negotiations with the Com....
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....e about Rs. 45,695 Crores as on September 30, 2016; and vi. the JLF restructuring of the Petitioner had proved ineffective and was nowhere near completion. 4) The directives of the RBI were thus, not on any "imaginary grounds" or "wishful thinking". - what in law, the Petitioner would have to establish to have them quashed (Bhikhubhai Patel v. State of Gujarat, (2008) 4 SCC 144 - Paragraph 24 - cited by the Petitioner). 5) The law as to permissible classification is well settled and the judgments cited by the Petitioners themselves lay down the following: a) classification must be founded on an intelligible differentia which distinguishes persons grouped together from others left out and that differentia must have a rational relation to the object sought to be achieved by the statute (Union of India v. N. S. Rathnam & Sons,(2015) 10 SCC 681 - paragraph 14); b) the person challenging the act of the State as violative of Article 14 has to show that there is no reasonable basis for the differentiation between the two classes created. Article 14 prohibits class legislation and not reasonable classification (Union of India v. N. S. Rathnam & Sons,(2015) 10 SCC 681 - paragraph 13....
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....f List "A", "B" and "C" in written submissions, no such list is found on record. However facts are explained in above sub-paras. 7) Thus, contrary to the argument canvassed by the Petitioners, Respondent No.1 has not arbitrarily identified 12 companies for action under the IBC by the Press Release. The process adopted by the RBI for identifying the 12 entities was completely consistent with the object of making quickest recovery of substantial economic value. The RBI seeks to focus on the cases which have the twin criteria of being the largest and longest standing NPAs. Such classification is based on an intelligible differentia, i.e., both quantum (Rs.5000 Crores and 60% NPA) as well as length of outstanding (at least fifteen months, i.e., from March 31, 2016) and has a nexus with the object of the IBC and the Ordinance, viz., rapid recovery of the largest possible economic value for the country. 8) By the process of filtration adopted by IAC, Respondent No.1 has shortlisted 12 companies for action under the IBC. These 12 companies constitute 25% of the total NPAs of India. The combined value of their exposure is close to Rs. 1,78,032 Crores. The classification of the largest ....
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.... G. Ganayutham, (1997) 7 SCC 463 - paragraphs 27 and 31 - cited by the Petitioner). 15) It is the decision making process and not the decision that an Article 226 Court can review. (Vinod Kumar v. State of Haryana (2013) 16 SCC - paragraph 24 - cited by the Petitioner) 16) Petitioner's alternative relief - Priority for package; at paragraph 2 (l) of the Application, the Petitioner seeks the following: "In the alternative without prejudice to the aforesaid the Petitioner seeks a direction of this Hon'ble Court to the NCLT to consider at the first instance the revival package that has been under discussion with the banks before proceeding further with the petition." Thereby, it is submitted that the Petitioner accepts the Press Release and the validity of the NCLT proceedings against it but seeks a priority for its revival package. Such priority is not permissible under the IBC. However, the Petitioner can always submit its revival package as a resolution applicant to the RP under Section 30(1) of the IBC. 17) Finally, at paragraph 12 of its Additional Affidavit dated July 7, 2017 (at page 799F) the Petitioner has prayed for a period of six months to continue efforts of restr....
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....o public interest and have a long-term impact. These are significant factors to be taken into account whilst deciding interim relief. 16. The Learned counsel for Respondent No. 2 has submitted as under: 1) Writ Petition cannot lie restraining the Respondent No. 2- SBI from exercising its legitimate statutory right under Section- 7 of IBC. The IBC is a complete code, which has given a specific statutory right to the Respondent No. 2 (Financial Creditor) to initiate insolvency resolution process against the Petitioner (Corporate Debtor). In the instant case all three requirements of Section- 7 of IBC are satisfied viz.: (A) A Financial Creditor (Respondent No. 2- State Bank of India) (B) A Corporate Debtor (Petitioner- Essar Steel) (C) A default in respect of a financial debt by the (Corporate Debtor- Essar Steel). 2) Once the three requirements of Section- 7 are satisfied, the Respondent No. 2 herein, is statutorily entitled to file an application under Section- 7 against the Petitioner herein. After an application is filed and NCLT being the Adjudicating Authority is satisfied, that it complies with the requirement of Section- 7, a non-discretionary statutory process t....
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.... much less, granting "in-principle" or for that matter any approval per se to the restructuring scheme. It is further pertinent to note that,though there were series of written communications between the Petitioner and the Respondent No. 2 in respect of boundary conditions and pending issues pertaining to restructuring scheme dating, as far back as June 2016, till date,both the parties have not been able to resolve the pending issues. Moreover, the restructuring proposal/scheme was not as per Respondent No.1/RBI's guidelines/circulars pertaining to the restructuring of loans. The latest letter int his regard sent by the Respondent No. 2 was on 17th June, 2017 ("17th June Letter") to the Petitioner wherein, the Respondent No. 2 in clear terms recorded more than 25 pending issues, in relation to the restructuring proposal, which remained unresolved. The Petitioners were in receipt of the said letter before filing of the present Petition. The said letter belies the case in the Writ Petition and therefore, is extremely relevant and material to the submissions being canvassed by the Petitioners before this Hon'ble Court. The Petitioners deliberately did not disclose the Letter dated 17t....
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.... cohesive manner with the Lenders and the Promoters/Company to draw up a suitable financial package, which is to be implemented in a time bound manner". (Page- 928 of Writ Petition) 10) In fact it is pertinent to note that the top management of the Petitioner including Mr. Prashant Ruia attended the said meeting on 22.06.2017 as its seen from the attendance sheet of the said meeting which is at Annexure -D to the Affidavit dated 13.07. 2017 filed by the Respondent No. 2 - SBI in the present proceedings. 11) Thereafter, by letter dated 23.06.17 to the Respondent No. 2, the Petitioners acknowledged (decision of lenders to take Petitioners to NCLT)"In view of the decision of the lenders to take ESIL to National Company Law Tribunal ("NCLT") as per directions of the Reserve Bank of India("RBI") for corporate insolvency resolution process ("CIRP") under the insolvency and Bankruptcy Code, 2016 (IBC), we have submitted to the member banks of the JLF our key requests which are quite critical for ESIL to continue its operations without any disruption, further enhance its performance in the interim period and to protect the interest of all stakeholders." ( Page-934 of Writ Petition) 1....
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....ere being initiated by the Respondent No. 2 and accepted and consented to the same. Having agreed and consented to the initiation of the proceedings under the IBC by the Respondent No. 2 and having noted and accepted that,the IRP would be appointed, the Petitioners are not entitled to turn around and object to the7 10same. It is submitted that by reason of having accepted the aforesaid proceedings unconditionally,the Petitioners are dis-entitled to challenge the initiation of the proceedings by the Respondent No. 2before the NCLT by filing the Petition. 18) Mr.Ravi Kadam, learned Senior Counsel for respondent No.2 has also referred the preamble and statement of objectives and reasons for the Insolvency and Bankruptcy Code, 2016 emphasizing that the code is nothing but a provision to complete the insolvency resolution process in time bound manner for maximization of value of assets and debts for long term and for huge amount, considering that the existing frame work for insolvency and bankruptcy is inadequate, ineffective and results in undue delays and resolution of the dispute. Thereby, it becomes clear that the existing mechanism under the Provincial Insolvency Act, 1920 and pu....
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....ded its jurisdiction. Moreover, the IBC specifically designates "NCLT" as the"Adjudicating Authority" for the purposes of the insolvency proceedings initiated under the provisions of the IBC. The Petitioners have nowhere in their Writ Petition, even alleged that the Hon'ble NCLT lacks the jurisdiction or is exceeding its jurisdiction in hearing the insolvency proceedings initiated against the Petitioners. Therefore, in light of the above there is no question of issuing any Writ, much less Writ of Prohibition against the Hon'ble NCLT, as they are the statutory body vested with the jurisdiction of hearing the insolvency proceedings, initiated under the provisions of IBC. 17. Whereas respondent No. 3 has submitted as under: 1) The Respondent No. 3 is a bank which is incorporated in the United Kingdom and is regulated and supervised by the Prudential Regulatory Authority, United Kingdom. The Respondent No. 3 had provided a loan facility of US$413,000,000.00 to Essar Steel Offshore Limited, which is a company incorporated under the laws of Mauritius and a wholly owned subsidiary of the Petitioner No. 1, pursuant to Facility Agreement dated 03.01.2014, as amended by amendment letter d....
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....Regulation (Amendment) Ordinance, 2017, the Reserve Bank of India hereby directs State Bank of India to initiate insolvency resolution process, singly or jointly with other lenders, under the provisions of the Insolvency and Bankruptcy Code, 2016 in respect of the default committed by Essar Steel India Limited." In view of the aforesaid, it is clear that the directive in question is not issued to the Respondent No. 3. It may be pertinent to note that that since the Petitioner No. 1 is only challenging the Press Release in respect of the said directive, the action of the Respondent No. 3 to approach the Respondent No. 4 under the IBC falls beyond the scope of challenge contained in the captioned petition. 4) The Respondent No. 3 is not a part/member of the Joint Lenders Forum, which is led by the Respondent No. 2 in the present case. The same is evident from the following: i. The statement of the Petitioner No. 1 in the captioned petition, which reads as follows: "... It is evident that having noticed the directives of the Reserve Bank of India to filed the petition before NCLT, Ahmedabad, even Standard Chartered Bank which is not part of the joint lenders forum led by STATE B....
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....1 that it was in advance stage of negotiation with the lenders of the Petitioner No. 1 and any other contentions based thereupon do not apply to the Respondent No. 3. While the Petitioner No. 1 has claimed payment of Rs. 3467 Crores to its lenders since April 2016, no such payment has been made by the Petitioner No. 1 to Respondent No. 3. 6)The contention of the Petitioner No. 1 that it is in the process of negotiation with the Respondent No. 3 and hence the proceedings cannot be initiated against it under the IBC is also not true. The fact is that there is a default committed by the Petitioner No. 1 in respect of payment of dues to Respondent No. 3. The same may be evident from the following: i. The Respondent No. 3 invoked the guarantee given by the Petitioner No. 1 vide its notice dated 07.12.2015 calling upon them to make payment under the said guarantee. [Page 748 to 749 of the captioned petition] ii. The Respondent No. 3 issued a notice dated 18.04.2016 to the Petitioner No. 1 under section 433 of the Companies Act, 1956, (the IBC was not in effect as this time). [Page 750 to 752 of the captioned petition] iii. The Petitioner No. 1, vide letter dated 24.01.2017, had p....
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....essly provided, in derogation of the Companies Act, 1956 (1 of 1956), and any other law for the time being in force." ii. Section 238 of the IBC: "238. Provisions of this Code to override other laws. - The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law." 8) The Respondent No. 3 is not a state within the meaning of Article 12 of the Constitution of India, and therefore, the reliefs sought by the Petitioner No. 1 against the Respondent No. 3 in the captioned petition, being in the nature of a writ, cannot be granted. In this regard, reliance is placed on the following decision of the Hon'ble High Court of Gujarat: * Ionic Metalliks v. Union of India, reported in 2015 (2) GLH 156 9)The Petitioner No. 1, by way of the captioned petition, has sought a writ of Prohibition from this Hon'ble Court insofar as it seeks a direction to the Respondent No. 4 to restrain from proceeding with the matters filed before it under the IBC. It is a well settled position of law that a writ of prohibition must be issued only in rarest of rare ....
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....y, decision is to be arrived at within 270 days thatwhether restructuring is possible or not and if restructuring is not possible within such time frame, then and then, company is to be declared insolvent. It is also submitted that during this period, Company would carry on its business through its officers but without the control of Board of Directors under the supervision of Interim Resolution Professional. 20. All such issues can be dealt with only if the provision of law is under challenge but only because of such provision at this stage, it cannot be said that RBI has no authority to advise SBI to initiate insolvency proceedings, for the simple reason that irrespective of such advise or direction, SBI can on its own, initiate such proceedings and in that case, the issue regarding genuineness of such proceedings is to be decided only by the adjudicating authority and not by the Writ Court. 21. Petitioner has relied upon the frame work for Revitalizing Distressed Assets in the Economy - Guidelines on Joint Lenders' Forum (JLF) and Corrective Action Plan (CAP) issued by RBI on 26.2.2014 (page 885). However, in view of what is discussed herein above, at this stage, when this Cou....
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....22.5.2017. Therefore, generally, it is to be believed that press release would always be issued after some internal documentation or correspondence and may not be based upon any oral decision. To that effect, the disclosure by learned counsel for respondent No. 1 that there is no documentation in support of press release dated 13.6.2014 seems to be improper. 24. It is submitted by the petitioner that though there is reference of proceedings before NCLT in Minutes of Meeting dated 22.6.2017, in fact, till 17.6.2017, practically, initiation was going on and in fact respondent No.3 Bank has addressed a letter to the petitioner seeking clarification on 25 open issues. Therefore, itis submitted that when till 17.6.2017, restructuring process was going on, there was no reason and in fact there was no disclosure of decision by the SBI to initiate proceeding under the Code though they are in receipt of direction to that effect and, therefore, there is reason to believe that SBI has filed the petition only because of direction of RBI though they want to settle the restructuring proposal pursuant to discussion held for couple of months. 25. However, all such issues are to be dealt by NCLT ....
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....th the order of the administrative authority is not permissible in absence of irrational, unreasonable orimproper procedure. In view of such fact, thiscase will also not be helpful to the petitioner. 29.Decision of Anwar Ali Sarkar (Supra) is with reference to speedy trial. Though conceptually it is affecting the provision of IB Code, it would be applicable only if constitutional validity of such Code is under challenge. 30. In N.S. Rathnam and Sons (Supra), there is consideration regarding validity of classification but reading of para Nos.13 to 16 does not confirm anything in favour of the petitioner. 31. In G.Ganayutham (Supra), the issue regarding judicial review of exercise of administrative or statutory discretion has been taken care of but therein also reading of Wednesbury case and para No.27 does not tilt the position in favour of the petitioner. 32.In case of Ruchi Soya Industries Limited (Supra) while dismissing the insolvency petition, the learned Single Judge of Bombay High Court has in- fact relied upon the factual details that 98% ofthe creditors in value of the total debts of the respondents have agreed to oppose the petition for winding up and have been partici....
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....he appellate bench while directing the adjudicating authority to reject the application though it seems to be on technical ground but it confirms that the adjudicating authority i.e. NCLT is not bound to admit the petition as a matter of rule but it has to be decided in accordance with law for which generally reasonable opportunity needs to be extended to all concerned. 36. It is specifically decided by the Appellate Tribunal that the procedural part of Section 7 or Section 9 or Section 10 are directory in natureand not mandatory. 37. I do not wish to discuss following citations any more since I am relying upon these judgments which are cited and referred by respondents. (a) Bhavesh D. Parish v. Union of India reported in 2000(5) SCC 471 (b) Senior Scale Bedi v. Union of India, reported in 1981(4) SCC 676 (c) Hirabhai Ashabhai Patel v. State of Bombay, reported in 1954 SCC Online Bom 77 (d) In Re the Special Courts Bill, 1978 reported in 1979(1) SCC 380 (e) Union of India v. Cipla Limited reported in 2017 (5) SCC 262 (f) Canara Bank v. P.R.N. Upadhyaya reported in 1998(6) SCC 526 (g) Sudhir Shantilal Mehta v. Central Bureau of Investigation reported in 2009(8) SCC 1....
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....on as seen and posed by RBI in impugned press release. It would be a decision based on judicial discretion by the adjudicating authority to deal with such application in accordance with law and based upon facts, evidence and circumstance placed before it. To that extent, prayers 7(b) and (c) cannot be granted. 4) Then, remains the only issue that whether RBI is empowered to publish press release dated 13.6.2017 or not. So far as directions to the Bank to initiate insolvency proceedings against companies, which are in debt to certain level or extent, the amended provisions of the Banking Regulation Act, 1949 in the form of Sections 35(AA) and (AB), certainly makes it clear that, now, RBI has such powers to issue certain directions to certain Banks and banking companies so as to see that there is proper recovery of public money or for any other such purpose. Therefore, the issuance of press release alone, cannot be quashed and set-aside. 5) The issue that remains is now limited to the scrutiny that whether such press release is in accordance with law and whether it results into infringing any fundamental right of anybody, more particularly, present petitioner and whether it is ar....
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..... In support of such direction, petitioner has submitted that by impugned press release when RBI has classified the companies in two categories i.e. (1) with fund and non-fund based outstanding amount greater than Rs. 5,000/- Crores with 60% or more classified as non-performing accounts by Bank as of March 31, 2016 and (2) rest of the companies; such classification is irrational, discriminatory and arbitrary inasmuch as there is no consideration of any material whatsoever for coming to such conclusion that why companies having outstanding amount of more than Rs. 5,000 Crores with 60% or more non-performing accounts and that too as on 31.3.2016, because petitioner company has deposited approximately Rs. 3,500/- Crores during last 15 months, more particularly, when for rest of the companies, resolution plan is to be fixed within six months and not immediately. 9) In support of such submission, heavy reliance is placed on Central Government's resolution through its Ministry of Finance dated 5.5.2017, which reads as under:- "In exercise of the powers conferred by Section 35AA of the Banking Regulation Act, 1949 (10 of 1949), the Central government hereby authorizes the Reserve Bank....
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....a resolution plan within six months and if resolution plan is not agreed upon by companies within six months, then in those cases also, Banks are required to file insolvency proceedings. Therefore, practically, there is no classification, but only time schedule is given that companies whose debt is more than Rs. 5,000 Crores, which is totaling 25% of current gross NPA of the country, insolvency proceedings need to be initiated at the earliest and in rest of the companies, if resolution plan could not be finalised within six months, then, insolvency proceedings should be initiated. Therefore, there is no direction that insolvency proceeding is to be initiated only against particular company(ies) and not to be initiated against any particular company(ies). It goes without saying that any action is to be started with someone and may not lie against all at the time. It also goes without saying, as already recorded herein above that for filing any such proceeding, none of the financial company or Bank requires either the permission or direction from RBI for other agency or authority because it is their independent and absolute right to initiate any such proceeding/s. Therefore also, whe....
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....from foreign countries whereby there is imbalance in production because of final profit. Though it may seem to be an attractive argument, in my humble opinion, at this stage, in a petition under Article 226 of the Constitution of India, I do not wish to explore all such issues and to determine anything precisely because, ultimately, all such issues would be raised before NCLT, which has to ascertain that whether there is reason to admit the insolvency resolution process immediately or not. At this stage, though this Court has to decide the matter based upon the facts, circumstance and evidence, so also applicable law, I could not resist to apprehend that allowing foreign countries to dump similar goods, which is made by Indian companies, would certainly result into an invitation to old colonial system because, ultimately, the business groups, who are having huge turnover in particular manner, would have impressive control over administration. But, when petitioner has not challenged the provision of Insolvency and Bankruptcy Code, I have not to deal with such issue at this stage except to dispose of this petition, more particularly, when there is no scope of granting interim relie....
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....offered to start payment of dues only after 25 years and that too only with 1 % interest. Therefore relief in terms of para 7(c) cannot be granted. (F) Only because SCB has corresponded to SBI for its proposal with reference to JLF activities, it cannot be held that SCB could not have initiated insolvency proceedings but it has done it only because of RBI guidelines by way of press release. Therefore relief in terms of para 7(c) cannot be granted. (G) Provisions of IBC may be drastic to some extent, but since it is part of statue which is yet not declared unconstitutional and therefore they are to be followed, but in consonance with Constitutional mandate by all concerned i.e. (1) Not to act upon it mechanically and that all provisions may not be treated mandatory but it could be treated directive only based upon facts, circumstances and evidence available before the authority (judgment dated 1.5.2017 in Company Appeal (AT) No.09 of 2017 between J.K. Jute Mills Co. Ltd. v. M/s. Surendra Trading Company by the National Company Law Tribunal); (2) Without being guided by any advice or directions in any form or nature viz: impugned press release. There is reason to say so becau....