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TaxTMI 
TaxTMI 
TaxTMI 
2020 (3) TMI 1057
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....is application has been filed by the liquidator under section 60(5) of the Insolvency and Bankruptcy Code, 2016 read with rule 11 of the National Company Law Tribunal Rules, 2016. The corporate debtor is under liquidation by the order of the hon'ble National Company Law Tribunal, Kolkata Bench dated December 6, 2018. The corporate debtor is kept as a going concern. Meanwhile, there was an arbitration proceeding between the corporate debtor and the respondent herein, i. e., M/s. Bharat Heavy Electricals Ltd. 2. The corporate debtor was involved in work execution project at Year marus in Karnataka and Vishakhapatnam in Andhra Pradesh and dispute arose between the corporate debtor and the respondent herein. As per the arbitration clause....
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....ew of stipulations contained in section 33(5) of the Insolvency and Bankruptcy Code, 2016. The respondent states that under section 33(5) of the Insolvency and Bankruptcy Code, 2016 it is "with prior approval of the Adjudicating Authority" the same is reproduced below : "(5) Subject to section 52, when a liquidation order has been passed, no suit or other legal proceeding shall be instituted by or against the corporate debtor : Provided that a suit or other legal proceeding may be instituted by the liquidator, on behalf of the corporate debtor, with the prior approval of the Adjudicating Authority." 4. The enactment clearly provides for prior approval of the Adjudicating Authority by the liquidator before initiation of ....
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.... give meaning and spirit to the enactment, inherent power can be used to bridge the gap and do justice to the party. 6. In support of his stand, the petitioner has quoted similar provisions of various laws. Wherein, under section 446 of the erstwhile Companies Act, 1956, where the courts have held and ratified such Act. The liquidator has quoted elaborately in Appeal No. 270 of 1990 in Vysya Bank Ltd. v. Official Liquidator, Shreeni was Cotton Mills Ltd. (in liquidation) [1995] 84 Comp Cas 493 (Bom), before the hon'ble Bombay High Court by order dated July 9, 1992. Wherein, the hon'ble Bombay High Court has held at paragraph 10 which is as follows (page 499) : "The section does not expressly provide for nullification of ....
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.... any of the properties or effects of the company after such commencement ; shall be void. (2) Nothing in this section applies to any proceedings for the recovery of any tax or impost or any dues payable to the Government.' . . . Thus from the clear and unambiguous language of section 446, it can be seen that the leave required is not a condition precedent and can be granted ex post facto. In Bansidhar Shankarlal v. Mohd. Ibra him [1971] 41 Comp Cas 21 (SC), the Supreme Court was directly concerned with the question as to whether leave was a condition precedent or not and held (at page 25) : 'Even granting that sanction under section 179 does not dispense with the leave under section 171 of the Act, to inst....
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....p order or commencement thereafter would be 'ineffective' unless it is activated by leave. 'Ineffective' would only mean ineffective qua the official liquidator only who has power, inter alia, to defend any suit or other legal proceeding in order to protect all the property, effects and actionable claims to which the company is entitled. Thus, the observation cannot be stretched to non-suit a plaintiff whose suit when filed is otherwise within limitation. To give such an interpretation to this observation can result in only setting at naught what is held by the Supreme Court. The bar of limitation is a creature of the statute and cannot be imposed or read into the otherwise unambiguous language of section 446. The observatio....
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....Hence, in the interest of justice and the overall view of the enactment for maximisation of the value of the assets of the corporate debtor. An approval will only amount to regularisation of appeal already filed and pending. It is only a formality to regularise the application which was filed before the District Court. 9. The permission to go on appeal against the company under liquidation was obtained by the respondent herein and this Adjudicating Authority by order dated April 8, 2019 has given approval to the respondent to file appeal against the corporate debtor against the award passed by the hon'ble sole arbitrator. By order dated April 8, 2019 this Adjudicating Authority granted leave, which is as follows : "C. P. No.....