TaxTMI 
TaxTMI 
2019 (7) TMI 686
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....ction 9 of the Insolvency and Bankruptcy Code, 2016 (for short, 'the I&B Code') against 'Duncans Industries Limited' (Corporate Debtor). The Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, Kolkata by impugned order dated 5th October, 2018 rejected the application on the ground that the provisions of the I&B Code are not applicable unless the 'Operational Creditor' seeks consent of the Central Government to start the 'Corporate Insolvency Resolution Process' of the 'Corporate Debtor' in view of Section 16G(1)(c) of the 'Tea Act, 1953'. According to the learned counsel for the Appellant the aforesaid provision of 'Tea Act, 1953' cannot be made applicable and Section 9 of the I&B Code will have an over-riding effect in v....
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....5. Reliance has also been placed on the decision of the Hon'ble Supreme Court in "Macquarie Bank Limited vs. Shilpi Cable Technologies Limited" - (2018) 2 SCC 674 to suggest that Section 9 of the I&B Code will have no over-riding effect on the previous Tea Act, 1953. 6. The Tea Act, 1953 was enacted to provide for the control by Union of the tea industry, including the control, in pursuance of the International Agreement of the cultivation of tea in and of the export of the tea from India and for that purpose to establish a Tea Board and levy a duty of excise on the tea produced in India. It is applicable to whole of India except the State of Jammu & Kashmir. 7. While constituting the Tea Board, the control of the export of tea from c....
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....rovisions contained in this Act and subject to such other exceptions, restrictions and limitations, if any, as the Central Government may, by notification in the Official Gazette, specify in this behalf, the Companies Act, 1956, shall continue to apply to such company in the same manner as it applied thereto before the issue of the notified order. 16H. If, at any time, it appears to the Central Government on the application of the owner of a tea undertaking or tea unit or otherwise that the purpose of the order made under section 16D or section 16E, has been fulfilled or that for any other reason it is not necessary that the order should remain in force, the Central Government may by notified order, cancel such order and, on cancellation of....
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....t of 7 Tea gardens owned by the Respondent (Corporate Debtor). 9. The case of the Appellant is that out of these 7 gardens, the 'Operational Creditor' supplied from the garden 'Birpara Tea Estate' and therefore it is not in dispute that the supplies made to the 'Corporate Debtor' is under the management and control of the Tea Board. 10. From plain reading of Section 16(1)(c) of the Tea Act it is clear that where the management or a tea undertaking or tea unit owned by the company has been taken over by the Tea Board "no proceeding for the winding up of such company shall lie in any court except with the consent of the Central Government." 11. Section 9 of the I&B Code empowers the 'Operational Creditor' to trigger the 'Corporate In....
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....tal thereto. 15. The Hon'ble Supreme Court in 'Swiss Ribbons Pvt. Ltd. & Anr. vs. Union of India & Ors.' - (2019 SCC OnLine SC 73) observed : "27. As is discernible, the Preamble gives an insight into what is sought to be achieved by the Code. The Code is first and foremost, a Code for reorganisation and insolvency resolution of corporate debtors. Unless such reorganisation is effected in a time-bound manner, the value of the assets of such persons will deplete. Therefore, maximisation of value of the assets of such persons so that they are efficiently run as going concerns is another very important objective of the Code. This, in turn, will promote entrepreneurship as the persons in management of the corporate debtor are remove....
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....nsolvency Resolution Process' while allows a resolution process but liquidation is not desirable under the I&B Code. Section 16G(1)(c) relates to winding up and on the other hand Section 9 of the I&B Code application filed is not a proceeding for winding up but for initiation of 'Corporate Insolvency Resolution Process' to ensure revival and continuation of the 'Corporate Debtor' by protecting the 'Corporate Debtor' from its own management and from corporate debt by liquidation. 17. Therefore, it is clear that Section 9 of Insolvency and Bankruptcy Code occupies different field than Section 16G(1) of the Tea Act, 1953. 18. For the reasons aforesaid, we hold that for filing an application under Section 9 against Tea Company under the m....