TaxTMI 
TaxTMI 
2021 (7) TMI 1067
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....ED 3 RULE NOT RECEIVED BACK 2 RULE SERVED 8, 9 Mr. R.D. DAVE for the Respondent No.5 Mr. G.M. JOSHI for the Respondent No.6 Mr. K.M. PARIKH for the Respondent No.10 Mr. A.S. VAKIL for the Respondent (s) No.11-13, 14 Mr. ABHIJIT P. JOSHI for the Respondent No.16 Mr. NANADISH Y. CHUDGAR For the Respondent No.1 Mr. ASHISH H. SHAH for the respondent No.7 Mr. DIPEN C. SHAH for the respondent No.6 CIVIL APPLICATION NO.1/2010 MR. DEVANG TRIVEDI For the Appellant Mr. SOAHM JOSHI, AGP For the Respondent-State Mr. G.M. JOSHI for the Respondent Mr. K.M. PARIKH for the Respondent Mr. A.S. VAKIL for the Respondent Mr. NANDISH Y. CHUDGAR for the Respondent Mr. ASHISH H. SHAH for the Respondent CAV JUDGMENT (PER : HONOURABLE DR. JUSTICE VINEET KOTHARI) 1. The aforesaid Letters Patent Appeal No.2480 of 2010, Lalitaben Govindbhai Patel and others Vs. Gujarat State Financial Corporation and others has been filed by the Guarantors-Shareholders of the Defaulter Company - M/s. Ganpati Pulp and Paper Mills Limited (GPPML) (now in liquidation) with the Official Liquidator attached to High Court of Gujarat, aggrieved by the order of the learned Single Judge dated 06.10.2010 (Coram: Hon'b....
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....capital. The said charge was created with the consent of GSFC, GIIC, Dena Bank and Bank of Baroda who were the members of the consortium. 8.3 In the year 1997 SIL became financially sick and was thus declared as "Sick Industrial Company" by BIFR under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985. In the year 2007 BIFR passed an order whereby it was held that GSFC is a secured creditor of SIL and requested GSFC to participate in reconstruction and revival of SIL. Even though the said order was challenged before AAIFR by GSFC, the same came to be upheld. GSFC therefore filed Special Civil Application No.11116 of 2008 in this Court challenging the order of AAIFR dated 2nd May 2008. The said petition is pending. 8.4 Admittedly there are outstanding dues which are bad debt. Such dues could be recovered by GSFC and they could also take possession of the property especially in view the order of this Court and orders of BIFR and AAIFR. 8.5 GSFC had floated several One Time Settlement Schemes. One of the schemes was with regard to purchasers of assets taken over by Corporation and sold under Section 29 of the SFC Act. SIL therefore ap....
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....ken over and the liability of the original debtor and the guarantors is fixed and crystallized. 8.10 Secondly there was settlement pursuant to OTS between GSFC and SIL for balance unpaid amount. Neither GPPL nor its guarantors are concerned with it because the "realization" of dues of GPPL by Auction Sale under section 29 of the Act had already been placed in 1990 and amount of sale i.e. Rs. 3.88 crores was realized and given credit of towards the dues of GPPL in the year 1990 itself. 8.11 Now by settling with SIL, GSFC is neither increasing nor decreasing the balance liability of GPPL nor its guarantors. It remains crystallized for Rs. 3.88 crores as of 1990. The rights were crystallized under section 29(2) of the SFC Act in 1990. Therefore the settlement or OTS does not and cannot affect any right or interest of the petitioners and they are not at all concerned with it. 8.12 It is also required to be noted that as of from the year 1990 the suits were pending. 8.13 The respondent No.1 Gujarat State Financial Corporation had introduced One Time Settlement (OTS) Scheme to the purchasers of assets taken over by the Corporation and sold under sectio....
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.... facts of the present case. 10.1 A contention has been raised on behalf of the petitioners that the property should be taken back and fresh auction may be held and the difference amount may be credited to their account. This contention is totally misconceived inasmuch as the price of the property as on the date of auction is realized and rights and liabilities of parties are crystallized. Assuming that a second auction is required then the benefits thereof will go to respondent no.2 and they cannot go to petitioner or Ganpati Pulp and Paper Mills Limited, the respondent no.6 herein. The rights were crystallized in auction in 1990, and only on the ground of pendency of proceedings and default by new purchaser, the petitioner cannot get any right to challenge the same. Further, in view of the restraint order passed by this Court in the above mentioned Special Civil Application, a prudent decision is taken, which cannot be faulted. 11. In the premises aforesaid, I do not find any merits in the present petition. The same is therefore dismissed. Notice is discharged with no order as to costs. Order of status quo stands vacated. 12. At this stage, Mr. Mihir Jos....
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.... "1. The present intra-Court appeal arises out of the order passed by the learned Single Judge on 06.10.2010, in which, first, an interim order was passed by the coordinate Bench of this Court headed by the Hon'ble Chief Justice, by which the order passed by the learned Single Judge was stayed until further orders. The said stay order in the matter is operating for the last ten years. 2. The matter, essentially, arises out of recovery action by secured creditors and financial institutions, who extended financial help to the original borrowers / guarantors - Lalitaben Govindbhai Patel and others (Guarantors) to secure the loan given by Gujarat State Financial Corporation and others in favour of borrower, Respondent No.4 - M/s. Ganpati Pulp and Paper Mills Ltd.. The said Borrower Company, upon default, went into liquidation by the winding-up order passed by this Court. The action under section 29 of the State Financial Corporation Act, 1951 was taken and the Assets of the said Borrower - M/ s. Ganpati Pulp and Paper Mills Ltd., were taken over and the same were sold by GSFC in favour of Respondent No.5 - M/s. Shree Industries Ltd. 3. A part of the sale considera....
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....ndred and eight days from the commencement of the Insolvency and Bankruptcy Code, 2016: Provided further that no fees shall be payable for making such reference under Insolvency and Bankruptcy Code, 2016 by a company whose appeal or reference or inquiry stands abated under the clause." 6. As per the aforesaid provision, it appears that the Company, whose reference was pending before the BIFR / AAIFR, could make a reference to the NCLT under the provisions of the IBC, 2016, within 180 days from the date of commencement of the IBC, 2016, which is 28.05.2016. 7. If the said Company, whose reference is pending before the BIFR / AAIFR, does not make such reference to the NCLT, then what happens to the pending proceedings seems to have not been specified in the provisions of the IBC, 2016 or other relevant laws. Whether the abatement will become final or such pending proceedings could be referred to the NCLT, by any of the parties or by the Court, is a question for our consideration. 8. In these circumstances, as prayed by the learned counsel, we grant some time to them to make submissions on the following points:- (i) Whether any proceedings,....
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....finds that it would amount to setting the clock back at that stage. If the proceedings are pending in the High Court at such an advanced stage, the Company Court must proceed with the winding-up instead of transferring the proceedings to the NCLT to be decided in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016. Whether such a stage is reached or not would depend upon the facts and circumstances of each case. 3. Paragraph-22 of the aforesaid judgment is quoted below for ready reference:- "22. Given the aforesaid scheme of winding up under Chapter XX of the Companies Act, 2013, it is clear that several stages are contemplated, with the Tribunal retaining the power to control the proceedings in a winding up petition even after it is admitted. Thus, in a winding up proceeding where the petition has not been served in terms of Rule 26 of the Companies (Court) Rules, 1959 at a preadmission stage, given the beneficial result of the application of the Code, such winding up proceeding is compulsorily transferable to the NCLT to be resolved under the Code. Even post issue of notice and pre admission, the same result would ensue. However, ....
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....n 27.09.2018 reported in [2018] 150 SCL 530 (Delhi). (ii) Jaipur Metals & Electricals Employees Organization V. Jaipur Metals & Electricals Ltd. reported in (2019) 4 SCC 227. (iii) Forech India Ltd. v. Edelweiss Assets Reconstruction Co. Ltd. reported in 2019 (18) SCC 549. (iv) M/s. Kaledonia Jute & Fibres Pvt. Ltd. V. M/s. Axis Nirman & Industries Ltd. reported in AIR 2021 SC 32. (v) Swiss Ribbons Pvt. Ltd. and Anr. V. Union of India& others reported in (2019) 4 SCC 17. (vi) Innoventive Industries Ltd. V. ICICI Bankreported in (2018) 1 SCC 407. (vii) Arcelor Mittal (India) (P) Ltd. V. Satish Kumar Gupta reported in (2019) 2 SCC 1. 5. After referring to the aforesaid judgments, the Hon'ble Supreme Court laid down the legal position as given in paragraph-22 quoted above. 6. We have sought the assistance of learned counsels Mr. A.S. Vakil, Mr. B.H. Bhagat, Mr. Abhijit Joshi, Mr. Nandish Chudgar and Mr. Devang D. Trivedi appearing in the present case before us for the respective parties on the issue whether the provisions of the Sick Industries Companies Act (Special Provisions) Repeal Act, 2003, as amended by....
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.... 11. It was also submitted before us by Mr. B.H. Bhagat, learned counsel appearing for Respondent No.9 - M/s. ASREC (India) Ltd., i.e. the Assignee of another Secured Creditor - Bank of Baroda, Respondent No.3 before us, that while the dues of other Secured Creditors or Banks, GIIC, etc. were settled by Respondent No.5 - Shree Industries Ltd. after the said Auction Purchaser also defaulted in repayment of the loan of Respondent No.1 - Gujarat State Financial Corporation, as the purchase price under section 29 of the State Financial Corporation Act, 1951 was converted into a Term Loan to Respondent No.5 - M/s. Shree Industries Ltd., but the dues of the Assignee of Bank of Baroda, Respondent No.3 and some other Secured Creditors were not settled. He also referred to some proceedings before the Delhi High Court and the purported Settlement between said Bank of Baroda / Assignee - M/s. ASREC (India) Ltd. with M/s. Shree Industries Ltd. by referring to the order of the Division Bench of the Delhi High Court and submitted that even that Settlement did not fructify and M/s. Shree Industries Ltd. did not pay up according to the said Settlement to the Assignee of Bank of Baroda - Respon....
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....ffective resolution of the matter is happening, either by payment to the Secured Creditors and other Creditors nor the Secured Creditors are allowed to take further recovery measures, subject to the rights and contentions of the various parties involved in the matter, therefore, as an interim measure at this stage, we feel it appropriate to modify the aforesaid blanket Status Quo order in the following manner:- (I) We direct the Respondent No.5 - Shree Industries Ltd. and the Respondent No.9 - ASREC (India) Ltd., the Assignee of Bank of Baroda and other Secured Creditors, who have not yet been finally settled and paid off by the Respondent No.5 - Shree Industries Ltd., to undertake the negotiation process for Settlement of the dues of such Secured Creditors and try to settle the dues of such Secured Creditors in the interregnum period. If the Settlement can be arrived at, let such Settlement Document be produced before this Court. If, however, such Settlement is not possible, at least the details of the efforts made for that purpose and the reasons for not arriving at the Settlement, may also be produced in the form of Status Report by the concerned parties before this Cou....
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....due to Covid situation the earlier directions of this Court in the Order dated 17.2.2021 for making sincere efforts for settlement of the dues of Respondent No.9 - M/s. ASREC (India) Ltd., the Assignee of Bank of Baroda and other secured creditors who have not yet been finally settled and paid off by the Respondent No.5 - Shree Industries Ltd., such efforts could not be made. He submits that the Respondent No.5 - Shree Industries Ltd. has genuine intention to make these settlement efforts, but for the Covid situation which had severe travel restrictions therefore, such steps could not be taken though certain mails have been exchanged between these parties. He, therefore, prays for some more time to comply with these directions and produce the Report of such settlement/efforts made for the same on the next date of hearing by both the parties. 2. Learned counsel appearing for the said Respondent No.9 Mr.B.H Bhagat however submitted that the meeting with Time, Date and Venue fixed may be fixed by the Court today, so that further steps for the said intention expressed by Respondent No.5 - Shree Industries Ltd., can be given concrete shape. 3. In view of these submissi....
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.... Ravi Mittal, Director of M/ s. Shree Industries Limited (SIL) and Mr. Nandish Chudgar, Advocate of M/s. Shree Industries Limited (SIL). In the light of the aforesaid two previous Orders of this Court and earlier Orders also, in the present Letters Patent Appeal, directed against the order of the Learned Single Judge (Coram: Hon'ble Mr. Justice K. S. Jhaveri) dated 06.10.2010 in Special Civil Application No. 12979 of 2009, Lalitaben Govindbhai Patel and 2 others (Guarantors) qua the loan of M/s. Ganpati Pulp and Paper Mills Limited (In liquidation) of GNFC and 7 Others, this Court had indicated that in the circumstances of the later development of law during the pendency of this litigation here in the form of enactment of Insolvency and Bankruptcy Code 2016 and the National Company Law Tribunal (NCLT), being the adjudicatory body under that law to decide such disputes of Insolvent Corporate Bodies, their Rehabilitation, Claims of the Secured and Unsecured Creditors and Others etc., is the appropriate Forum for deciding such Claims and Counter Claims, respective Defences and other relevant aspects of the matter. We are therefore of the considered opinion that the e....
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....s of the Company were sold in favour of M/s. Shree Industries Limited (SIL), and thereafter, there nothing much was left with the Company in Liquidation -M/s. Ganpati Pulp to square up the dues of the other Secured and Unsecured Creditors and also the workmen. In these circumstances, we propose to pass the final order in the following terms in the present Letters Patent Appeal. Proposed Order of disposal of the present Letters Patent Appeal: "The present Letters Patent Appeal is disposed of with a request to the Learned Company Judge to consider the aforesaid aspects of the matter and if considered appropriate to transfer the pending winding up proceedings to the NCLT Bench, Ahmedabad, who may take up the proceedings for winding up of the Company in question in appropriate manner after deciding the Claims, Counter Claims and respective defences of all the parties concerned in this litigation. Letters Patent Appeal is accordingly disposed of. No costs" For the aforesaid proposed Order, we request all the learned Counsels appearing the present matter today before us or who have already put in their appearance in this matter to file a brief two page....
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.... Civil Application made by GSFC cannot be granted and the said Special Civil Application would also be disposed of along with Letters Patent Appeal No.2480 of 2010 by this common order. 8. To the proposed order in our interim order dated 01.07.2010 quoted above, while M/s. ASREC (India) Limited and GIIC represented by Mr.Rajesh Yadav have supported the said proposed order of the Court, the other learned Counsels appearing for GPPML Mr.Apurva Vakil and learned Counsel for SIL Mr.Nandish Chudgar and Mr.Dipen C. Shah, learned Counsel appearing for the Directors-Shareholders of SIL have opposed the intended transfer of proceedings to NCLT. As directed by the Court, they have submitted their brief submissions in writing. Though learned Counsels have been heard on the said proposition at length also, but to avoid any communication gap, the said brief written notes are quoted in extenso as submitted by them in the Court with the respective dates and submissions: (i) Brief Note of Appellants - Smt. Lalitaben Govindbhai Patel and others filed by Mr.Apurva Vakil, learned Counsel for the appellants, on dated 10.07.2021: BRIEF NOTE OF THE APPELLANTS Issues in the LPA: ....
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....ed Order: 2. The Appellants are not agreeable to the proposed order as reflected in the order dated 01.07.2021 passed in the present LPA. The proposed order can be divided in two parts, viz. (i) the LPA is disposed of and (ii) the request to the learned Company Judge to consider the aforesaid aspects of the matter and if considered appropriate, to transfer the pending winding up proceedings to the NCLT bench, Ahmedabad who may take up the proceedings of winding up of R.6Company in appropriate manner 'after' deciding the claims, counter-claims and respective defenses of all the parties concerned in 'this' litigation. Part (i) of the proposed order: 3. The proposed disposal of the LPA would mean that there is no adjudication on the merits of the impugned orders of BIFR, AAIFR and the learned Single Judge. Consequently, the said orders of BIFR, AAIFR and learned Single Judge would attain finality and the subject property of R.6Company (which was subject matter of auction u/s.29 of SFC Act) will be considered as the property of R.5-SIL. Thus, the basic grievance of the Appellants that the subject property cannot be c....
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....ny to the NCLT. Such 'request' also cannot be considered as an "application to transfer" as contemplated under the last proviso to Section 434(1)(c) of the Companies Act, 2013. Neither does this Hon'ble Court have the jurisdiction under Clause 15 of the Letters Patent to request/observe/direct the NCLT, Ahmedabad the manner in which the proceedings, if transferred, will be dealt with. Powers contemplated under the last proviso of Section 434(1)(c) of the Companies Act, 2013 are conferred upon the learned Company Court and cannot in any manner, directly or indirectly, be exercised by a Court exercising powers under Clause 15 of the Letters Patent. Section 434(1)(c), last proviso and Discretion: Assuming that the winding up proceedings are not transferred: Assuming without admitting that a request can be made by this Hon'ble Court to the learned Company Judge (as per the proposed order), the power to transfer being discretionary, such discretion will have to be exercised by the learned Company Judge on sound judicial principles. The learned Company Judge may decide against exercising discretion in favour of transfer for the reason that the s....
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....e learned Company Court revoked the order admitting the winding up petition and appointing the OL. This was done apparently because, on transfer, the transferred winding up proceedings are to be treated as an application for initiation of CIRP. CIRP proceedings and winding up proceedings could not have continued simultaneously. As against the aforesaid, in the facts of the present case, (i) the winding up order has been passed as far back as 12.03.1986 (i.e. before 35 years), (ii) the subject property of the R.6-Company (in liquidation) has been taken possession of and auctioned (in/around 1988-1990) in exercise of powers u/s. 29 of the SFC Act and in view of the orders of BIFR, AAIFR and learned Single Judge and the proposed disposal of the LPA, the said subject property will be considered as an asset of the auction purchaser-R.5-SIL (in absence of any document of title) and not of R-6 Company (in liquidation), (iii) there are no proceedings pending in the NCLT either u/s.7 or u/s.9 of the IBC in respect of R.6-Company, (iv) none of the party to the winding up proceedings of R.6Company have made an application under the last proviso of ....
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.... 01.07.2021 on behalf of Shree Industries Limited (SIL) - Respondent no.5 filed by Mr.Nandish Chudgar, learned Counsel for respondent no.5, dated 09.07.2021: "NOTES OF ARGUMENTS PURSUANT TO ORDER Dtd. 01/07/2021 ON BEHALF OF SHREE INDUSTRIES LTD. (SIL)-RESPONDENT NO.5: I. The decision and the ratio of the Hon'ble Supreme Court in Action Ispat reported in (2021) 224 Comp Cas 35 (SC) is not applicable in the instant case because: (i) Action Ispat was a case for transferring of Winding-Up proceedings pending before Company Court under provisions of the Companies Act, 1956 to NCLT. While the instant proceedings (LPA no. 2480/10 in SCA 12979/09) is not the proceedings under the Companies Act but is arising out of Writ Jurisdiction conferred on the High Court under Art. 226 of the Constitution. (ii) In Action Ispat the properties/assets of the Company in Liquidation were not sold and the liquidation process was at the initial stage. While in the instant case the properties of Ganpati are already sold and that too u/s. 29 of SFC Act by GSFC, the leader of the consortium of the lenders of Ganpati Pulp and Paper Ltd ("Ganpati"). (iii) In Action I....
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....ement between GSFC and SIL under OTS; (b) auction price of Rs. 3.88 Cr. has been already given credit to the Ganpati in the year 1990 and the settlement amount or the haircut given by GSFC would have no bearing on Ganpati- it will neither increase nor decrease any liability on Ganpati or its Guarantors; (c) settlement is only qua outstanding portion of GSFC and the outstanding portion of purchase price/loan vis-à-vis GIIC, BOB and Dena Bank is not covered by the settlement; (d) OTS scheme floated by GSFC is a policy decision which is not arbitrary or illegal. This judgement is under challenge in the present LPA. Therefore, the scope of the present LPA is limited to the impugned judgement and the challenge to the action of settlement under OTS by and between GSFC and SIL III. In the respectful submission of SIL, that there are no disputed questions of fact or financial statements, claims of secured/unsecured creditors to be adjudicated by this Hon'ble Div. Bench. As a matter of fact, the Ld. Single Judge, has decided the matter and the issue involved in it, finally. The Ld. Single Judge of this Hon'ble Court has not found himself h....
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....In the respectful submission of Respondent no.5, even, in view of the said judgement of the Hon'ble Supreme Court, the present Appeal before the Div. Bench of this Hon'ble Court challenging the judgement and order dated 09/12/2009, under the Letters Patent, cannot be transferred to NCLT, nor to the Ld. Company Judge of this Hon'ble Court. VI. So far as merits of the matter (LPA no. 2480/10 in SCA 12979/09) is concerned, 'Brief Submissions and Synopsis/ Dates & Events' (dated 04/02/2021) on behalf of Resp. no.5 (Shree Industries Ltd. -SIL) have already been filed in the present proceedings and hence, the record is not being burdened any further, however, the same is referred to and relied upon by the Resp. no.5. VII. The Resp. no. 5, therefore, most respectfully submits not to pass the proposed final order as reflected in the Order dated 01/07/2021 passed by this Hon'ble Court and most humbly requests this Hon'ble Court to decide the present proceedings on its merits. Place: Ahmedabad NANDISH CHUDGAR Date: 09/07/2021 Advocate for Resp. no.5 Shree Industries Ltd." (iii) Brief Notes of arguments on behalf of Respondent no.1-GSFC filed by Mr.Devang Trivedi....
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....nt, are in the nature of mandamus and that the same challenges Onetime Settlement (OTS) between GSFC and SIL i.e decision of Financial corporation, is the subject matter and and not in respect of any proceedings under winding of the Company therefore, the same cannot be decided by Learned NCLT, as the powers of NCLT are limited and not inherent, Constitutional and wide and that powers can not be generated, transferred or relegated to any coram other then this Hon'ble High Court. 5. There is no dispute that the assets of the GPPL has been sold by GSFC jointly with other creditors wise GIIC, Dena Bank and Bank of Baroda (now ASREC), U/s. 29 of the State Financial Corporation Act, 1951. The said action hasn ever been challenged by the appellant - original petitioner, guarantors of GPPL and therefore, the subject matter of Onetime Settlement in the commercial decision of Financial Institution under challenge, is without any right or locus of the guarantors of the original borrower GPPL and the submission therefore is that when the auction amount i.e. Rs. 3.88 Crores have been given credit of to GPPL, and in settling with SIL, GSFC does not increase any liability of single rupe....
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....e Company in question in appropriate manner after deciding the Claims, Counter Claims and respective defences of all the parties concerned in this litigation. Letters Patent Appeal is accordingly disposed of. No costs" 2) Since the proposed order is based on the sound logic of the latest judgment of the Hon'ble Supreme Court in the case of Action Ispat and Power Pvt. Ltd. V. Shyam Metalics and Energy Ltd. reported in (2021) 224 Comp Cases 35 (SC) and more fully discussed in Paragraph22 of the said judgment, which is quoted below, "22. Given the aforesaid scheme of winding up under Chapter XX of the Companies Act, 2013, it is clear that several stages are contemplated, with the Tribunal retaining the power to control the proceedings in a winding up petition even after it is admitted. Thus, in a winding up proceeding where the petition has not been served in terms of Rule 26 of the Companies (Court) Rules, 1959 at a pre-admission stage, given the beneficial result of the application of the Code, such winding up proceeding is compulsorily transferable to the NCLT to be resolved under the Code. Even post issue of notice and pre admission, the same result would ens....
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....affidavit stating its claims, court cannot dispose of LPA without adjudication on oral assertion of ASREC of some disputes. Even otherwise there are grave suppressions in submission of ASREC. iii. The subject matter of apportionment of sale consideration is a matter between GSFC and other consortium creditors. Auction purchaser therefore is a third party standing outside winding up proceedings and cannot be referred to winding -up court for any of its entitlement like issuance of sale certificate. iv. Admittedly (Page 275) GSFC (auction seller) was acting for consortium of BOB, ASREC, Dena Bank and GIIC, and hence auction sale is binding on all creditors as auction is confirmed by their consent. There are no creditors outside this consortium having independent claims. Consortium is not entitled to amount exceeding sale proceeds under the auction and there is no affidavit of any creditor making such claim. GSFC therefore cannot be prevented (dominus litus) from withdrawing SCA 11116/2008 as proposed order also does not hold that withdrawal is prejudicial to any party. v. The court has not undertaken any inquiry to ascertain disputed question of fact. The c....
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....hallenge. Auction purchaser is an innocent buyer and has nothing to do with winding-up of GPPL whose properties were sold in auction. B. The Honourable High Court is required to establish disputed question of fact by referring to specific pleadings in the LPA and Writ Petition and merely saying that there are disputed questions of facts is not enough as that would amount to refusal to exercise jurisdiction without even referring to disputed facts. The proposed order has not objectively evaluated any disputed question of fact which court cannot decide. The court could not have said there is disputed question of fact even without asking ASREC to file affidavit in reply and actually disputing facts. The courts proposed order is based on imagination of existence of a complex question of facts. C. ASREC has not filed any affidavit in LPA prima facie establishing existence of debt. ASREC has also not been able to establish its locus. Learned single judge also held that GSFC was acting on behalf of BOB/ASREC under Section 29 of State Financial Corporation Act and this fact is admittedly clear on perusal of assignment deed and sale agreement with auction purchaser. Thus, ....
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.... order, as quoted above in the order dated 01.07.2021 passed by us, is quoted again hereinbelow for ready reference: "In these circumstances, we propose to pass the final order in the following terms in the present Letters Patent Appeal. Proposed Order of disposal of the present Letters Patent Appeal: "The present Letters Patent Appeal is disposed of with a request to the Learned Company Judge to consider the aforesaid aspects of the matter and if considered appropriate to transfer the pending winding up proceedings to the NCLT Bench, Ahmedabad, who may take up the proceedings for winding up of the Company in question in appropriate manner after deciding the Claims, Counter Claims and respective defences of all the parties concerned in this litigation. Letters Patent Appeal is accordingly disposed of. No costs" 10. The reasons are as under:- 10.1 The present litigation on the board of this Court in the form of Special Civil Application No.11116 of 2008 and Letters Patent Appeal No.2480 of 2010 has arisen on account of sheer misconception on the part of the writ petitioners and writ appellants in the Letters Patent Appeal, that such complicated an....
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....ecide these issues, we are of the considered opinion that NCLT would be the best suited Forum in these circumstances to the said all the concerned and connected issues in this case. 10.2 In the meantime, there has been evolution and development of new law also in this regard in India also and not only the Old Companies Act, 1956 stands substituted by the New Companies Act, 2013 which too has been amended from time to time, but the Insolvency and Bankruptcy Code, 2016 has also been enacted by the Parliament which repealed several such other laws like SICA, 1985 etc. The NCLT has been empowered to undertake the insolvency resolution or winding-up of the corporate bodies under the New Special Law viz. IBC, 2016 and this law has already been made subject matter of interpretation in various judgments rendered by the Apex Court of the Country and realizing the importance of the urgently interpreting this complex law, the Hon'ble Supreme Court has rendered series of judgments on this law settling the various controversies. 10.3 For our purposes, we have referred and relied upon the judgment of the Hon'ble Supreme Court only in the case of Action Ispat and Power Private Limited Vs. S....
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.... into One Time Settlement with SIL at a mere Rs. 60 lakhs and that is a matter to be looked into by the NCLT. The said SIL is also said to have stopped its production activities and the assets of GPPML sold to it under Section 29 way back in the year 1990 are still in disuse or are not being used for any productive activity and that is not only a wastage of assets for the creditors and other stakeholders, but also a national waste. 10.6 All these aspects cannot obviously be looked into by this Court in writ jurisdiction or even a winding-up Court while seized of the winding-up proceedings, but a Special Body like NCLT can definitely look into all the aspects of the matter as it is vested with the powers of CIRP (Corporate Insolvency Resolution Process) as enacted in the provisions of IBC, 2016, as defined in Chapter-2, Sections 6 to 32A of the IBC, 2016. 10.7 We quite understand the anxiety of the learned Counsel, who opposed the aforesaid proposed order of this Court in the interim order dated 01.07.2021 to request the learned Company Judge seized of the winding-up proceedings of Company Petition No.139 of 1985 to transfer the same to NCLT, Ahmedabad and to allow all the par....