TaxTMI 
TaxTMI 
TaxTMI 
2022 (12) TMI 613
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.... the Board of Industrial and Financial Reconstruction (in short "BIFR") vide order dated 02.04.1998. M/s J.K. Synthetics Pvt. Ltd. entered into Memorandum of Understanding ("MoU") with ARFAT Petrochemicals Private Limited (Respondent herein), on basis of which MoU, Appellate Authority for Industrial & Financial Reconstruction ("AAIFR") vide order dated 07.01.2005, approved and sanctioned the implementation of rehabilitation scheme. (ii) The Appellant claiming to be representative of the workmen union of Sick Industry M/s J.K. Synthetics Pvt. Ltd. filed an Application under Section 33 read with Section 34 of the IB Code before the National Company Law Tribunal, Ahmedabad Bench, Ahmedabad alleging that Rehabilitation Scheme has been breached, the Corporate Debtor be liquidated. The Corporate Debtor is in continuance breach of Sanctioned Rehabilitation Scheme and is unable to meet out its responsibility and liabilities towards its creditors and stakeholders. The Appellant in the Application relying on Notification of the Central Government dated 24.05.2017 contended that Rehabilitation Scheme sanctioned and under implementation is a Resolution Plan within the meaning of IB Code. In ....
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....survives and could have been availed by the Appellant in filing Application under Sections 33 and 34 of the IB Code. It is further submitted that judgment of Hon'ble Supreme Court dated 25.10.2018 in M/s Spartek Ceramics India Ltd. vs. Union of India and Ors. while dealing with the Notification dated 24.05.2017, had only made observation which being an obitor, cannot be held to be a declaration of law with regard to Notification dated 24.05.2017. The Hon'ble Supreme Court in Spartek judgment has only upheld the judgment of NCLAT by which sanctity and authenticity of the Notification dated 24.05.2017 is not affected. It is further submitted that NCLT vide its judgment and order dated 05.04.2021 in CP(IB) No.469 of 2018 in the matter of Surendra Singh Hada and Ors. vs. Arfat Petrochemicals Pvt. Ltd. has given liberty to the Operational Creditor to file an Application under Section 33 of the IB Code subject to compliance of relevant provisions of law, while refusing the entertain Application under Section 9. When Application under Section 9 has been refused to be entertained with liberty aforesaid, the Adjudicating Authority could not have rejected the Application under Section 33 rea....
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....e have considered the submission of the learned Counsel for the parties and have perused the record. 6. The main question to be answered in this Appeal is as to whether Application filed by the Appellant under Section 33 read with Section 34 of the IB Code was maintainable. The basis of Application was approved Rehabilitation Scheme dated 07.01.2005, alleging contravention of which the Application was filed. The primary question is as to whether the approved Rehabilitation Scheme is a Resolution Plan within the meaning of IB Code. The Appellant in support of his submission relied on order dated 24.05.2017 namely - The Insolvency and Bankruptcy Code (Removal of Difficulties) Order, 2017. The order dated 24.05.2017 was issued in exercise of powers conferred by sub-section (1) of the Section 242 of the IB Code, is to the following: "Now, therefore, in exercise of the powers conferred by the sub-section (1) of the section 242 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the Central Government hereby makes the following Order to remove the above said difficulties, namely: 1. Short title and commencement.-(1) This Order may be called the Insolvency and Bankruptcy Code (....
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....s for consideration is whether the impugned Notification S.O. 1683(E) dated 24th May, 2017 relates to removal of difficulty arises in giving effect to the provisions of the case. The Notification aforesaid, mentions the following difficulties: "And, whereas, difficulties have arisen regarding review or monitoring of the schemes sanctioned under subsection (4) or any scheme under implementation under sub-section (12) of section 18 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) in view of the repeal of the Sick Industrial Companies (Special Provisions) Act, 1985, substitution of clause (b) of section 4 of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 and omission of sections 253 to 269 of the Companies Act, 2013" 36. From plain reading of the ground as shown in the impugned Notification S.O. 1683(E) dated 24th May, 2017, we find that the notification has been issued in view of difficulties arisen to give effect to review or monitoring of the schemes sanctioned under sub-section (4) or sub-section (12) of Section 18 of the 'SICA Act, 1985', in view of 'SICA Repeal Act, 2003' and omission of Sections 253 to 269 of the Companies A....
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....re it. Therefore, while upholding the judgment passed by the appellate Tribunal on the ground that the appeal itself was not maintainable, we set aside the judgment insofar as it purports to deal with the limitation aspect of the case and the merits including the declaration of the Scheme as being illegal. 3) Insofar as Civil Appeal No. 8247 of 2018 and Civil Appeal D. No. 33241/2018 are concerned, it is clear that on the facts in these cases, originally, the appellants had approached the High Court of Delhi in writ petitions. The High Court of Delhi, by judgment dated 22.02.2018 (as modified by order dated 17.04.2018) and 14.09.2017, respectively, ordered the parties to avail of the alternative remedy of filing an appeal before the NCLAT in view of the Notification dated 24.05.2017 which was done by the appellants in these appeals. 4) As the impugned judgment dated 28.05.2018 has set aside this Notification, and which has been upheld by us, the NCLAT, in both these cases, has dismissed the two appeals so filed, following the main judgment of 28.05.2018. This being the case, we revive the two writ petitions that had been before the High Court of Delhi in both the appeals before....
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.... of removal of difficulties provisions, which is law declared by the Hon'ble Supreme Court and is binding on all under Article 141 of the Constitution of India. The judgment of the Adjudicating Authority impugned in the present Appeal follows the judgment of the Hon'ble Supreme Court in M/s Spartek Ceramics India Ltd. vs. Union of India & Ors. When the Notification dated 24.05.2017, is not a valid Notification, there is no occasion to accept the submission that approved Rehabilitation Scheme dated 07.01.2005, which is foundation of the Application filed by the Appellant under Sections 33 read with Section 34 can be treated as a Resolution Plan within the meaning of IB Code. The very foundation of the Application filed by the Appellant under Sections 33 and 34 having been knocked out, the Application was rightly rejected by the Adjudicating Authority. 14. The learned Counsel for the Respondent has relied on judgment of this Tribunal in Company Appeal (AT) (Insolvency) no.294 of 2018 - Gail (India) Ltd. vs. M/s. Neycer India Ltd. where this Tribunal has considered the Notification dated 24.05.2017 and the judgment of the Hon'ble Supreme Court in M/s Spartek Ceramics India Ltd. (supr....
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....em Ltd. vs. Union of India and Ors. in Writ Petition (C) 9674 of 2017 decided on 01.11.2017. The Delhi High Court in the above judgment has also considered the Notification dated 24.05.2017 issued by the Central Government. The above judgment of the Delhi High Court had no occasion to notice the judgment of the Hon'ble Supreme Court in M/s Spartek Ceramics India Ltd., where notification dated 24.05.2017 has been disregarded by the Hon'ble Supreme Court. Hence, the judgment of the Delhi High Court cannot be held to be any binding precedent. 17. The learned Counsel for the Appellant has also placed reliance on judgment of Madhya Pradesh High Court in Girdharilal Sugar & Allied Industries Ltd. vs. Union of India, where Notification dated 24.05.2017 has been relied and relying on the said Notification the High Court held that the Writ Petition is not maintainable and dismissed the Writ Petition. The judgment of the Madhya Pradesh High Court has simply followed the Notification dated 24.05.2017, which Notification having been held to be in excess of authority of the Central Government as per the judgment of the Hon'ble Supreme Court in M/s Spartek Ceramics India Ltd., the judgment of t....