TaxTMI 
TaxTMI 
2023 (4) TMI 1140
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.... 2. Brief facts that lead the petitioners to this Court in the subject petition, as borne out from the pleadings, are as follows:- The respondent - M/s Wind World (India) Limited (hereinafter referred to as 'the Company' for short) was granted a lease by the Karnataka Renewable Energy Development Corporation Limited in respect of land measuring 221.80 Hectares under a lease deed dated 03-09-2003. The land granted for lease was a Forest land. The lease was for a period of 15 years and came to an end on 19-06-2018. The Company applies for renewal of lease on 09-01-2020 and the same was pending consideration before the Competent Authority. Meanwhile the Company requests the State to permit it to start the wind mill as the same would get damaged if it is not put into functioning. The request of the petitioner was considered and to safeguard the interest, pending consideration of final liabilities, it was given such permission on 23-07-2020. The permission was subject to clearance of the Forest Department. The Forest clearance did not come about for a long time. The Company on declaration of it being an insolvent was before the Tribunal invoking Section 14 of the Code. The proceedings....
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.... interpretation by the Apex Court in plethora of judgments. He would contend that merely because proceedings are drawn up by the Government it would not fructify into an order. It is not an order and as such the Tribunal was well within its jurisdiction to pass appropriate orders protecting the interests of the proceedings before it. He would contend that the entire issue is covered by plethora of judgments rendered by the Apex Court. 7. Both the learned Additional Advocate General for the State and the learned senior counsel for the Company would place reliance upon common judgments to buttress their respective submissions. 8. I have given my anxious consideration to the submissions made by the respective learned counsel and have perused the material on record. In furtherance whereof, the only issue that falls for consideration is: "Whether the Tribunal has exceeded its jurisdiction by passing the impugned order?" 9. To consider the issue that is raised, it is germane to notice the provisions of the Code. Section 60 of the Code deals with Adjudicating Authority for Corporate persons and reads as follows: "60. Adjudicating Authority for corporate persons.- (1) ....
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....in place shall be excluded." (Emphasis supplied) Sub-section (5) of Section 60 directs that notwithstanding anything to the contrary contained in any other law, the Tribunal shall have jurisdiction to entertain and dispose of any application by or against the corporate debtor or corporate person. It has jurisdiction to entertain any claim by or against the corporate debtor including a claim by or against all its subsidiaries situated in India. It is under this provision that an application comes to be filed by the corporate debtor, the Company before the Tribunal and the Tribunal has passed the impugned order. The impugned order insofar as it is germane reads as follows: "5. Since no one appeared on behalf of the respondents in this proceedings despite service of notice, we do not know respondent No.1's stands on the proposal dated 09-01-2020 submitted by the Corporate Debtor for renewal of the lease. We consider it proper to direct the Respondents to allow the Corporate Debtor to run the windmills as per the Respondents own order dated 23.07.2020 on the same conditions as mentioned therein. We hold so because in our considered view to keep windmills working is....
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.... of lease, is in the public law domain and hence the correctness of the said decision can be called into question only in a superior court which is vested with the power of judicial review over administrative action. The NCLT, being a creature of a special statute to discharge certain specific functions, cannot be elevated to the status of a superior court having the power of judicial review over administrative action. Judicial review, as observed by this Court in Sub-Committee on Judicial Accountability v. Union of India [Sub-Committee on Judicial Accountability v. Union of India, (1991) 4 SCC 699] flows from the concept of a higher law, namely, the Constitution. Para 61 of the said decision captures this position as follows: (SCC pp. 738-39) "61. But where, as in this country and unlike in England, there is a written Constitution which constitutes the fundamental and in that sense a "higher law" and acts as a limitation upon the legislature and other organs of the State as grantees under the Constitution, the usual incidents of parliamentary sovereignty do not obtain and the concept is one of "limited government". Judicial review is, indeed, an incident of and flows from....
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....o exercise a jurisdiction not vested in it in law, the High Court of Karnataka was justified in entertaining the writ petition, on the basis that NCLT was coram non judice." (Emphasis supplied) Paragraphs 3.2 to 3.9 are the facts before the Apex Court. At paragraph 29 the Apex Court clearly holds that the Tribunal is creature of a special statute to discharge certain specific functions and cannot be elevated to the status of a superior Court having power of judicial review over administration action. The Apex Court further observes that the Tribunal is not even a civil Court which has jurisdiction by virtue of Section 9 of the CPC to try all suits of a civil nature. It is held that the Tribunal can exercise only such powers within the contours of jurisdiction as prescribed in the statute. The Apex Court holds that in the light of the Code it was clear that whenever the corporate debtor has to exercise its right that falls outside the purview of the Code, especially in the realm of the public law, the Tribunal cannot bypass the same and grant enforcement of such a right. The Apex court holds that the Tribunal did not have jurisdiction to entertain any application against....
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.... refer any dispute for arbitration". Therefore, any issue in relation to PPA must be raised before the State Commission, and not NCLT. Further, the second respondent has no locus to file a petition before NCLT in relation to PPA. 35.3. NCLT cannot preclude the appellant from exercising its contractual rights under PPA read with the Electricity Act. 35.4. If Section 60(5) is given a broad interpretation to include contractual disputes, it would disrupt the streamlined and time-bound process under IBC. Although NCLT, being conscious of its limitations, has not proceeded to adjudicate on whether the termination of PPA was valid, or dwelt on the interpretation of PPA, it has still erroneously set aside the termination of PPA by the appellant without any basis under IBC. 35.5. Even if it is assumed that NCLT has jurisdiction over disputes relating to PPA, the adjudication of such disputes should be in accordance with PPA. The sanctity of the contracts must be upheld unless there is a statutory provision interdicting such contracts. There can be no exercise of any inherent or residual power by NCLT to set aside the termination of a contract absent a statutory i....
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....ile and/or defend multiple proceedings in different fora. These proceedings may cause undue delay in the insolvency resolution process due to multiple proceedings in trial courts and courts of appeal. A delay in completion of the insolvency proceedings would diminish the value of the debtor's assets and hamper the prospects of a successful reorganisation or liquidation. For the success of an insolvency regime, it is necessary that insolvency proceedings are dealt with in a timely, effective and efficient manner. Pursuing this theme in Innoventive [Innoventive Industries Ltd. v. ICICI Bank, (2018) 1 SCC 407: (2018) 1 SCC (Civ) 356] this Court observed that: (SCC p. 422, para 13) "13. One of the important objectives of the Code is to bring the insolvency law in India under a single unified umbrella with the object of speeding up of the insolvency process." The principle was reiterated in ArcelorMittal [ArcelorMittal (India) (P) Ltd. v. Satish Kumar Gupta, (2019) 2 SCC 1] where this Court held that: (SCC p. 88, para 84) "84. ... The non obstante clause in Section 60(5) is designed for a different purpose : to ensure that NCLT alone has jurisdiction when ....
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....te debtor, there would be no ground to terminate PPA. The termination is not on a ground independent of the insolvency. The present dispute solely arises out of and relates to the insolvency of the corporate debtor. ... ... ... 74. Therefore, we hold that the RP can approach NCLT for adjudication of disputes that are related to the insolvency resolution process. However, for adjudication of disputes that arise dehors the insolvency of the corporate debtor, the RP must approach the relevant competent authority. For instance, if the dispute in the present matter related to the non-supply of electricity, the RP would not have been entitled to invoke the jurisdiction of NCLT under IBC. However, since the dispute in the present case has arisen solely on the ground of the insolvency of the corporate debtor, NCLT is empowered to adjudicate this dispute under Section 60(5)(c) of IBC. I.2. Jurisdiction of NCLT and GERC 75. It has been urged on behalf of the appellant that in terms of Article 10.4 of PPA, GERC is entitled to entertain the disputes relating to PPA. 76. Our attention has also been drawn to Section 86(1)(f) of the Electricity Act, wh....
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....of the corporate debtor and its status as a "going concern". We hasten to add that our finding on the validity of the exercise of residuary power by NCLT is premised on the facts of this case. We are not laying down a general principle on the contours of the exercise of residuary power by NCLT. However, it is pertinent to mention that NCLT cannot exercise its jurisdiction over matters dehors the insolvency proceedings since such matters would fall outside the realm of IBC. Any other interpretation of Section 60(5)(c) would be in contradiction of the holding of this Court in Satish Kumar Gupta [Essar Steel (India) Ltd. (CoC) v. Satish Kumar Gupta, (2020) 8 SCC 531 : (2021) 2 SCC (Civ) 443]." (Emphasis supplied) The Apex Court again considering sub-section (5) of Section 60 of the Code holds that the Tribunal will not have jurisdiction to entertain any issue arising out of any statutory requirement. It is clearly held that the Tribunal cannot exercise its jurisdiction over matters de hors insolvency proceedings, since the matter falls outside the realm of the Code. 12. Again the Apex Court in the case of TATA CONSULTANCY SERVICES LIMITED v. SK WHEELS PRIVATE LIMITED RE....
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....ty can be restrained from terminating the contract only if it is central to the success of CIRP. Crucially, the termination of the contract should result in the corporate death of corporate debtor. In Gujarat Urja [Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta, (2021) 7 SCC 209 : (2021) 4 SCC (Civ) 1] , this Court held thus : (SCC pp. 309-10, paras 176-177) "176. Given that the terms used in Section 60(5)(c) are of wide import, as recognised in a consistent line of authority, we hold that NCLT was empowered to restrain the appellant from terminating PPA. However, our decision is premised upon a recognition of the centrality of PPA in the present case to the success of CIRP, in the factual matrix of this case, since it is the sole contract for the sale of electricity which was entered into by corporate debtor. In doing so, we reiterate that NCLT would have been empowered to set aside the termination of PPA in this case because the termination took place solely on the ground of insolvency. The jurisdiction of NCLT under Section 60(5)(c) of IBC cannot be invoked in matters where a termination may take place on grounds unrelated to the insolvency of corporate debtor. Even more c....
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....in the case of GUJARAT URJA VIKAS NIGAM LIMITED the Apex Court holds that the Tribunal cannot overstep its jurisdiction. 13. In the light of the judgments rendered by the Apex Court supra it is germane to notice the proceedings of the State and the order notified upon the Company by the State. The proceedings dated 07-05-2022 reads as follows: "Proceedings of the meeting held on 07-05-2022 regarding the running of Wind World (India) Limited Windmills in Chitradurga district under the Chairmanship of Principal Chief Conservator of Forests Head of Forest Force) Attended by 1) Principal Chief Conservator of Forest (Forest Conservation) 2) Additional Principal Chief Conservator of Forests (Working Plan) 3) Additional Principal Chief Conservator of Forests (CAMPA) 4) Additional Principal Chief Conservator of Forests (NFP & BM) 5) Additional Principal Chief Conservator of Forests (Legal Cell) 6) Additional Principal Chief Conservator of Forests (Wild Life) and Nodal officer Bellary 7) Additional Principal Chief Conservator of Forests (Administration & Coordination) 8) Chief Conservator of Forests (Beng....
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....Mills to keep them running and inform the BESCOM to withhold an amount of Rs.370.00 lakh from the power revenue due to the user agency till proper clearance under Forest Conservation ACT 1980 is in place. FC proposal was uploaded on 09-01-2020 the same has been verified and accepted by PCCF (FC) on 07-03-2020 and the proposal forwarded to DCF Chitradurga on 22-05-2020. DCF Chitradurga submitted the proposal to CCF, Bellary Circle on 27-06-2021. In response, CCF, Bellary circle had raised EDS query to DCF Chitradurga on 08-09-2021 the same was communicated by DCF Chitradurga to UA on 05-08-2020. User Agency replied to the EDS query on 25-03-2022. Now the proposal is pending at DCF, Chitradurga for further processing. PCCF (FC) mentioned to the members at the meeting that since the restart of the wind mills, more than 21 months has lapsed. Thus a reasonable opportunity which was given by PCCF (HoFF) on 24/7/2020 and 11/08/2020 to carry out the maintenance of the wind mill and produce power has lapsed. Further PCCF (Hoff) had also permitted the BESCOM to release the payments after withholding 3.70 crores with itself and after deducting 10% of the amount paya....
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....e communication to this office Dated: 22-05-2020. 2.This office even letter no dated:16-09-2021 and 08-03-2022. 3. Your letter Dated: 25-03-2022 ***** With reference to the above subject, M/s Wind World (India) Ltd., has submitted a proposal through web portal mode for Renewal of Lease proposal for 106.769 Ha of Forest Land for Wind Power Project in Jogimatti and Marikanive Reserve forest, earlier the same land has been diverted in favor of M/s KREDL for sub lease to M/s Enercon (India) Limited presently Wind World (india) limited on BOT basis for the total area of 221.80 Ha in Chitradurga district for approval under Forest (Conservation) Act, 1980. Accordingly, a communication through online was received to process the said proposal and to submit specific opinion vide ref (1). The Chief Conservator of Forests, Ballari Circle, Ballari has directed the undersigned to submit relevant information/documents for further processing of the proposal vide letter dated: 07-09-2021. Further, this office has raised query on 16-09-2021 and 08-03-2022 Further, You have requested to this office to give one month time to execute the pillar erec....