TaxTMI 
TaxTMI 
TaxTMI 
2023 (4) TMI 1140
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....ers 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 were pending before the Tribunal right ....
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.... 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) The Adjudicating Authority, in relation to insolvency resoluti....
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....ng 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 essential part in relation to resolve insolvency of the Corporate Debtor. 6. With this, we allow this application to the....
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....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 this concept of the fundamental and the higher law being the touchstone of the limits of the powers of the various organs of the State which derive power and authority under the Constitut....
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.... 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 Government of Karnataka for a direction to execute supplemental lease deeds for extension of mining lease. 11. The aforesaid judgment is further followed and amplified in GUJARAT URJA VIKAS NIGAM LIMITED v. AMIT GUPTA AND OTHERS ....
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....ant 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 interdict. The resolution applicant or NCLT have no powers to modify PPA through a resolution plan. The formation, novation or alteration of the contract must be in accordance with Section 30(2)(e) of IBC, which provides that the resolution plan cannot contravene any provision of law whic....
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....organisation 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 it comes to applications and proceedings by or against a corporate debtor covered by the Code, making it clear that no other forum has jurisdiction to entertain or dispose of such applications or proceedings." Therefore, considering the text of Section 60(5)(c) and the interpretation of similar provisions in other insolvency related statutes, NCLT has jurisdict....
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....sputes 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, which provides that GERC shall discharge the function of adjudicating "the disputes between the licensees, and generating companies and to refer any dispute for arbitration". It has been submitted that, therefore, any issue in relation to PPA must be raised before GERC and not NCLT. 77. Reliance has also been placed on the judgment of this Court in Embassy Property [Embassy Property Developments (P) Ltd. v. State of Karnataka, ....
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....m 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 RESOLUTION PROFESSIONIAL, VISHAL GHISULAL JAIN [(2022) 2 SCC 583] has held as follows: "28. In Gujarat Urja [Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta, (2021) 7 SCC 209 : (2021) 4 SCC (Civ) 1] , the contract in question was terminated by a third party based on an ipso facto clause i.e. the fact of insolvency itself constituted an event of default. It was in that context, this Court held that the contractual dispute between the parties arose in relation to the insolvency ....
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....ered 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 crucially, it cannot even be invoked in the event of a legitimate termination of a contract based on an ipso facto clause like Article 9.2.1(e) herein, if such termination will not have the effect of making certain the death of corporate debtor. As such, in all future cases, NCLT would have to be wary of setting aside valid contractual terminations which would merely dilute the value of corporate debtor, and not push it to its corporate death by virtue of it being corporate debtor's sole contract (as was th....
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....vator 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 (Bengaluru) Ex Chief Conservator of Forests, Bellary The issue under discussion was continuance of running of the wind mills at Chitradurga by Wind World (India) Lid., company without renewal of the lease under FC Act by the Government of India. PCCF (FC) briefed the members at the meeting regarding the case. The Lease was granted by Government of India for 221.80 ha on 02.04.2003 and formal grant of lease was made by GOK on 20.06.2003 in Jogimattti and Marikanive RF in Chitradurga District in favour of KREDL for a period of 15 years. This was sub leased to ENERCON (India) limi....
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....DS 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 payable towards power purchase from future bills on 07-11-2020. All the above was done in good faith so that the state is not deprived of power and the investment infrastructure of the company does not go waste and Government interest was sought to be safeguarded by withholding 3.70 crores and by retaining 10% of future billswith BESCOM. However, it appears that the company has taken undue advantage of this and has not taken proactive steps to submit the completed FC proposal in a form such that the same can be sent to Government of India for renewal. The members deliberated in detail and came to a consensus that continuation of the windmill....
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....ecific 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 erection work vide letter under Ref (3). But, however you have not submitted the compliance report vide this letter dated:08-03-2022. The following observations were made during the site inspection. 1. No demarcation was done for the electric transmission lines in above site. 2. No demarcation was done at Vacuum Circuit Breakers (VCB) sites. It is a long pending issue, which has to be treated as urgent. Hence, the user agency has to submit compliance report for the site inspection memo with necessary justification within 15 days as sought by the Chief Conservator of forests, Ballari Cicle, Ballari. Otherwise under signed will recommended(sic) to the higher authorities for closure of life. Yours faithfully, Sd/- Deputy Conservator of Forests, Chitradurga Division, Chitradurga"....