TaxTMI 
TaxTMI 
2022 (1) TMI 1431
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..... JUDGMENT (Virtual Mode) [PER; V. P. SINGH, MEMBER (T)] 1. The Appellants have filed the present Appeals under Section 61 of the Insolvency and Bankruptcy Code, 2016 ("Code"), impugning the Order dated June 7, 2021 ("Impugned Order") passed by the AA^[1]/National Company Law Tribunal, Mumbai Bench in the Miscellaneous Application No. 415 of 2020 ("MA 415") and MA. No. 416 of 2020 ("M.A. 416") (collectively referred as "UP Applications") in C.P.(IB) No. 4285/MB/2019 ("NCLT Petition"). 2. FACTUAL BACKGROUND: 2.1 The Appellant in CA (AT) (Ins) No. 759 of 2021 is UP State Power Sector Employees Trust which is a General Provident Fund Trust set up for Uttar Pradesh Power Corporation Limited ("UPPCL"). Since March 2017, the said Appellant had invested Rs. 2631.20 crores in the form of 319 Fixed Deposits ("FD ") with DHFL. 2.2 The Appellant in CA 760/AT/INS /2021 is Uttar Pradesh State Power Corporation Contributory Provident Fund Trust, set up for Uttar Pradesh Power Corporation employees Limited ("UPPCL"). Since March 2017, the said Appellant had invested Rs. 1491.50 crores in the form of Fixed Deposits ("FD^[2]") with DHFL^[3], which in turn, issued fixed deposit ....
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...., on September 29, 2021, the Applicant in Miscellaneous Application 415 of 2020 received Rs. 353,57,55,029/- under the approved Resolution Plan against its admitted claim of Rs. 1531,68,36,412/- and the Applicant in Miscellaneous Application 416 of 2020 received Rs. 200,35,36,599/- under the approved Resolution Plan, against its admitted claim of Rs. 867,92,89,737/-. The said amounts were retained by the Appellants/Applicants towards part discharge of the amounts claimed by the Appellants, without prejudice to its rights to receive the entire amount. 3. Appellants Submission 3.1 Monies invested by the FD. Holders are held in Trust by DHFL: (a) Rule 10 of the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 ("FSP Rules") provides that Rule 5(b) (Moratorium) of the FSP Rules and Section 14 of the Code does not apply to any third-party assets or properties in custody or possession of the Financial Service Provider, including any funds, securities and other assets required to be held in trust for the benefit of third parties. Further, the Explanation appended to Section....
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.... (a) There is no overlap or contradictions between the Code and the NHB Act. Hence, the overriding clause as contained in Section 238 of the Code doesn't apply. While ordinarily, the Code is a special statute, in the present case, the special statute governing DHFL and, thereby, the deposit holders' investment is under the NHB Act. The same is evident from a plain reading of the provisions of the NHB Act (Chapter V). (b) It is trite law that is even assuming there was an inconsistency, where a general statute and a specific statute relating to the same subject matter cannot be reconciled, the special or specific statute must prevail. Therefore, the principle is that general law yields to special law provided they operate in the same field, on the same subject, and if there is any inconsistency. In the present case, the subject is deposits made by the FD holders in specifically regulated institutions such as DHFL. In contrast, the subject of the Code is overall debt restructuring, insolvency and bankruptcy for, generally, all corporate persons and individuals, respectively. (Ref: Order dated February 19, 2014, in Commercial Tax Officer, Rajasthan v. M/s Binani Cemen....
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....ns are inconsistent with the provisions of the special Act. The relevant extract of Section 2(b) of the Code is set out below: "2. Application. The provisions of this Code shall apply to- (a) any company incorporated under the Companies Act, 2013 (18 of 2013) or under any previous company law; (b) any other company governed by any special Act for the time being in force, except in so far as the said provisions are inconsistent with the provisions of such special Act: ..." (emphasis supplied) 3.3 The Impugned Orders are passed without keeping in mind the going concern status of DHFL (a) The acceptance of public deposits and servicing them when repayments become due is an essential part of a housing finance institution's ordinary course of business. Therefore, for DHFL to maintain its status as a going concern, DHFL needed to discharge its liability towards public depositors like the Appellants as and when it arose. (b) DHFL, in blatant violation of Sections 29 (a)A(6) and 29 A(4)(a) of the NHB Act, is continuing its Lending Business without repaying the public depositors. Section 29 (A) of the NHB Act categorically prov....
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.... to the FD holders falls within the definition of current dues' arising for the use of continuation of the license issued by the NHB. Therefore, it was incumbent on DHFL to repay the FD holders in full as per the terms of their deposit. The fact that the FD. Holders ought to have been paid as per the terms of their deposit forms parts of the 'Notes forming part of the consolidated financial statement for the year ended March 31, 2018, of DHFL. (b) In addition, DHFL was required to maintain the entire cover of the FDs under the NHB and RBI Directions. Despite the said cover and the security provided to the FD Holders, they were not extended. Being a public deposit holder, the Appellant has a statutory right to be repaid by DHFL and such right overrides any other right, contractual, or otherwise. (c) Section 36 of the NHB Act provides for a non-obstante clause that states that the NHB Act provisions have an overriding effect on any other inconsistent law or instruments. Further, Section 36A of the NHB Act provides that every deposit by a housing finance company is required to be repaid by the terms and conditions thereof. Thus, as per the provisions of the N....
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....ve, the claim of the public deposit holders ought not to be equated with that of any other creditor of DHFL and ought to be repaid in full as statutorily mandated. However, in complete violation of the statutory requirement, the approved Resolution Plan allotted Rs. 1300 - 1500 crores, despite having an admitted aggregate claim of Rs. Five thousand three hundred seventy-five crores constitute merely 23% to 26% of their claim amount. The said payment is only marginally higher than the liquidation value that the public holders would be entitled to in the event of liquidation of DHFL. (c) Without prejudice to the rights and contentions of the Appellants that the Appellants ought to have been paid 100% of its claimed amount, the Appellants submit that the Respondents submitted that the public deposit holders were nothing but financial creditors of DHFL. However, despite the admission that the public deposit holders were financial Creditors of DHFL, the public depositors were given the same treatment as the other financial creditors', including the debenture holders. The unjust ill-treatment of Respondent No. 2 towards the public deposit holders is evident from the fact tha....
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....ted that under the Order passed by the Hon'ble NCLT approving the Resolution Plan, the same was implemented. By way of a reverse merger, the Successful Resolution Applicant merged into the Corporate Debtor. Thus, a new entity, namely, Piramal Capital & Housing Finance ("PCHF") was formed. Basis this development, PCHF contended that the mandatory obligations under the NHB Act, which arose due to the failure of the Corporate Debtor, did not apply to SRA' PCHF'. (b) The Appellants submit that the said argument is flawed and untenable as admittedly, by way of a reverse merger, the Successful Resolution Applicant merged into the Corporate Debtor; thus, the Corporate Debtor is till date in existence and thus, the obligations of the Corporate Debtor to comply with the provisions of the NHB Act exist. Furthermore, the Appellants Applications were filed before the reverse merger and before the approved Resolution Plan was placed before the CoC. Thus, any steps taken by the Respondents despite the pendency of the UP Applications were subject to the orders of the Tribunal. 3.9 Prejudice caused to the Appellant: (a) The Appellants are bona fide investors, and t....
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....oting share of the CoC. Further, vide the Plan Approval Order, the Ld. NCLT directed the CoC to reconsider the amount payable to fixed deposit ("FD ") holders. Under the said direction, in its 20h meeting dated 17.06.2021, the CoC put to the vote the resolution for maintaining parity between the Appellants/F.D. Holders and secured Financial Creditors. However, this resolution was rejected by 89% (approx.) of the voting members of the CoC. 4.3 Notably, the Appellants participated in the Corporate Insolvency Resolution Process ("CIRP") in the Capacity of Financial Creditors and were treated as such. They were represented as a class of Financial Creditors through an authorised representative of their choice. Contrarily, they now approach this Appellate Tribunal seeking untenable reliefs in law and militate against their actions since the admission of the Erstwhile CD into insolvency. 5. The Appellants do not possess the locus-standi to file the Appeals 5.1 The Appellants are admittedly trusts registered under the Indian Trusts Act, 1882, filed the Appeals in their name. It is settled that trust, not being a legal person, is not entitled to sue in its name (Case 1: Kishorelal ....
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....nt is incorrect and in ignorance of the unique field occupied by the IBC. 7.2 At the outset, the argument of the Appellants directly contradicts their pleading (Appeal No. 759 of 2021, Para D, Pg. 32-33; Appeal No. 760 of 2021, Para 33-34), wherein it is pleaded that there is no inconsistency between the IBC and the NHB Act. 7.3 Further, it is submitted that the IBC is the singular law governing the entire insolvency process, irrespective of obligations that may exist between debtors and creditors under any other statute, contract or otherwise. On the other hand, the RBI Act and the NHB Act have not dedicated statutes meant for the rights of depositors but rather constitute the institutions, i.e., the RBI and the NHB. In any event, this same issue on the interplay between IBC and another statute was considered by the Hon'ble Supreme Court in the case of Pioneer Urban Land & Infrastructure Limited & Anr. v. Union of India, (2019) 8 SCC 416 [Para 29-30]. In this judgment, the Hon'ble Supreme Court considered whether provisions of the Real Estate (Regulation and Development) Act, 2016 ("RERA") prevail over provisions of the IBC. It was held therein that the provisions of....
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....s to whom a "financial debt" is owed within the term's meaning under Section 5(8) of the IBC. Time and again, the Hon'ble Supreme Court of India has restated and cemented the position that an FD holder is a Financial Creditor within the strict sense of the phrase. Accordingly, an FD holder is entitled to initiate insolvency proceedings against a company and is also entitled to participate in CoC meetings; Pioneer Urban Land and Infrastructure Ltd. & Anr. v. Union of India & Ors. (2019) 8 SCC 416 [Para 43); Orator Marketing Pvt. Ltd. v. Samtex Desinz Pvt. Ltd., AIR 2021 SC 4040 (Para 14); Insolvency Law Committee for Notification of FSP Sub-Committee Report dated 04.10.2019 [Para 17]). Moreover, Appellants themselves filed a claim before the Administrator in the capacity of Financial Creditors. 8.4 An amount held by a person cannot be classified as being a "debt" and being held in "trust" simultaneously. Furthermore, it is settled law that a depositor and bank relationship is not equivalent to one between a beneficiary and trustee. Instead, it is a relationship of a creditor and debtor. ; Commissioner of Income Tax v. Hindusthan Welfare Trust, 1991 SCC OnLine Cal 361 [Par....
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....t as a part of its operations as a going concern, the Erstwhile CD needed to repay deposits by the terms of its license. In this regard, the Appellants primarily rely upon Sections 29 A(4)(a), 29 A(6) of the NHB Act, Section 45-1A of the RBI Act, Directions 18, 39 of the Housing Finance Companies (NHB) Directions, 2010, and Directions 38, 39 of the NonBanking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016. However, at the outset, it is clarified that none of these provisions contemplates survival of the terms of the license where the Company is undergoing CIRP as per IBC. 8.8 The provisions referenced by the Appellants are myopic. They do not contemplate that a company undergoing CIRP may not fulfil the conditions of the license to keep afloat as a going concern. For instance, Section 29 A of the NHB Act requires a housing finance company to have "adequate capital structure and earning prospects". In consideration of such terms and conditions of a license that an FSP (such as the Erstwhile CD) may be unable to fulfil, the FSP Rules specifically state in Rule 5(b)(ii), that "the license or registration which authorises the financial service prov....
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....ior status to FD holders alone. It would be untenable to grant different treatment to FD holders, as this would create a separate sub-class of creditors. ( Chitra Sharma v Union of India, (2018) 18 SCC 575 (Para 48.1, 48.2]). The Appellants had been aware of the risks associated with their investment with the Erstwhile CD. When making their investments, the Appellants were informed that their deposits are unsecured and pari-passu with other unsecured liabilities (except the floating charge created under Section 29 B of the NHB Act) repayment of deposits is guaranteed by RBI or NHB. 10. The instant case does not warrant any interference of the Appellate Tribunal in law or equity. 10.1 Under the framework of the IBC, the commercial wisdom of the CoC reigns supreme. In view of this, the Hon'ble Supreme Court held that the Ld. NCLT does not have the power to modify the terms of the Resolution Plan but can direct the CoC to reconsider the terms of the Resolution Plan. (Jaypee Kensington Boulevard Apartments v. NBCC India Ltd. & Ors., 2021 SCC OnLine SC 253). Vide the Plan Approval Order, the Ld. NCLT has already acted in line with the decision of the Hon'ble Supreme Court ....
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....urt that the Scheme has been introduced only with a view to avoid repayment to the small depositors as it contemplates that instead of repaying of amount in accordance with the terms and conditions of the deposit, such amount shall be considered as convertible debentures with interest @ 6%, which would be converted into equity shares within a period of one year. Such a provision is clearly contrary to the mandatory requirements under Section 45-QA(1) which requires that: "45-QA. (1) Every deposit accepted by a non-banking financial company, unless renewed, shall be repaid in accordance with the terms and conditions of such deposit." This ingenious effort by the appellants in fact justifies the insertion of the amendment, which has been obviously incorporated with a view to protect the depositors and to avoid exploitation of these hapless and poor depositors from exploitation by the non-banking financial institutions, such as the Appellant. It is for this reason that Chapter III-B clearly provides that the provisions contained therein shall override all other laws, which are inconsistent with the same. This will also be applicable to Sections 391-394 of the Compani....
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....re illegal. Any stipulation under the Resolution plan or as per the approved minutes of the CoC provides that the FD's claims. Holders shall be extinguished upon payment as per the Resolution Plan, are entirely illegal, violative of law, and cannot be sustained. 12.7 Appellants submit that the relevant parts of the Resolution Plan extinguish the resolution applicant's liability to repay the depositors in full are illegal and liable to be set aside. It was the statutory obligation of the RBI and the National Housing Bank to ensure that the deposits of the Appellants were protected. The newly inserted Sections 45-ID, 45-IE and 45-MBA of the RBI Act empowers the RBI to secure the general public interest and take action in the public interest. Importantly, to ensure the public interest, by Section 45-MBA of the RBI Act, the RBI was also empowered to resolve an NBFC without prejudice to the powers already existing other laws, including not limited to the IBC. This power of the RBI under the Finance Act, 2019 was included after the enactment of the IBC in part II-B of the RBI Act, which contains a non-obstante clause. Thus, the statutory power of the RBI was coupled with a dut....
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....assets without prior written permission of the Bank for such period not exceeding six months from the date of the Order.] [45-MBA. Resolution of non-banking financial Company.- (1) Without prejudice to any other provision of this Act or any other law for the time being in force, the Bank may, if it is satisfied, upon an inspection of the Books of a nonbanking financial company that it is in the public interest or in the interest of financial stability so to do for enabling the continuance of the activities critical to the functioning of the financial system, frame schemes which may provide for any one or more of the following, namely- (a) amalgamation with any other non-banking institution; (b) reconstruction of the non-banking financial Company; (c) splitting the non-banking financial Company into different units or institutions and vesting viable and nonviable businesses in separate units or institutions to preserve the continuity of the activities of that nonbanking financial company that are critical to the functioning of the financial system and for such purpose establish institutions called "Bridge Institutions". Explanation.-For t....
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....ompanies. (4) All the provisions of the Companies Act, 1956 (1 of 1956) relating to winding-up of a company shall apply to a windingup proceeding initiated on the application made by the Bank under this provision.] ******* 12.9 According to the Appellant stand of the RBI in other proceedings is not relevant before this Appellate Tribunal. The RBI's stand in washing away its obligation to repay the depositors in full and follow its mandate under the RBI Act to protect depositors is contrary to law. The RBI is obligated by its duty coupled with its power to ensure that the depositors are protected. 12.10 The Appellants contends that Section 238 does not override any requirement that the law governing the actions of DHFL must be followed. The CoC seeks to evade repayment to FD. Holders are claiming exemption under the IBC and claiming that in terms of Section 238 of the IBC, the provisions of IBC will override the other provisions of law. However, there is no provision in the IBC that FD Holders are not required to be paid as per the terms complying with the provisions of law. Therefore, there is no inconsistency between the provisions of the IBC and other ....
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....ed by FD. Holders before the Hon'ble Delhi High Court and the Hon'ble Bombay High Court. 12.16 The RBI Act and the NHB Act merely provide that the license of an HFC^[7] or NBFC^[8] may be cancelled if the deposit holders are not paid, and such a decision can be taken only after allowing the concerned Housing Finance Companies or NBFC to present its case. None of the legislation provides that the FD. Holders are required to be paid in full, and hence the Appeals proceed on an incorrect interpretation of law with a view to mislead this Tribunal. 12.17 Further, the Banning of Unregulated Deposit Schemes Act, 2019 ("BUDSA") enacted on July 19, 2019, to protect the interests of the depositors also gives primacy to the Code and clearly states that that the rights of the FD Holders will have priority save otherwise as provided under the Code. 12.18 The Learned Senior Counsel for Respondent No. 3 submits that amounts deposited by the FD Holders were not held in trust by DHFL. The legal position of the FD Holders with DHFL are not akin to the National Housing Bank. The FD Holders has not taken the said argument before the NCLT. They are agitating an entirely new argument th....
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....n crore rupees or such other higher amount, as the Reserve Bank may, by notification, specify. (2) Every housing finance institution which is a company shall make an application for registration to the Reserve Bank in such form as may be specified by the Reserve Bank: Provided that an application made by a housing finance institution which is a company to the National Housing Bank and pending for consideration with the National Housing Bank as on the date of commencement of the provisions of Part VII of Chapter VI of the Finance (No. 2) Act, 2019, shall stand transferred to the Reserve Bank and thereupon the application shall be deemed to have been made under the provisions of this sub-section and shall be dealt with accordingly: Provided further that the provisions of this sub-section shall not apply to the housing finance institution which is a company and having a valid registration certificate granted under sub-section (5) on the date of commencement of the provisions of Part VII of Chapter VI of the Finance (No. 2) Act, 2019, and such housing finance institution shall be deemed to have been granted a certificate of registration under the provision of....
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....cate of registration had been issued to it; or (iii) at any time fails to fulfil any of the conditions referred to in clauses (a) to (g) of subsection (4); or (iv) (a) fails to comply with any direction issued by the [Reserve Bank or the National Housing Bank] under the provisions of this Chapter; or (b) to maintain accounts in accordance with the requirement of any law or any direction or Order issued by the 60[Reserve Bank or the National Housing Bank] under the provisions of this Chapter; or (c) to submit or offer for inspection its books of account and other relevant documents when so demanded by an inspecting authority of the ^61[Reserve Bank or the National Housing Bank]; or (v) has been prohibited from accepting deposit by an order made by the National Housing Bank under the provisions of this Chapter and such Order has been in force for a period of not less than three months: Provided that before cancelling a certificate of registration on the ground that the [housing finance institution which is a company] has failed to comply with the provisions of clause (ii) or has failed to fulfil any of the condit....
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....Act, 2013 (18 of 2013): Provided that the National Housing Bank shall, in consultation with the Reserve Bank, specify the companies to be deemed to be in the same group.] 29(4) The [Reserve Bank], for the purpose of considering the application for registration, may require to be satisfied by an inspection of the books of such housing finance institution or otherwise that the following conditions are fulfilled:- (a) that housing finance institution is or shall be in a position to pay its present or future depositors in full as and when their claims accrue; 36. Chapter V to override other laws.-The provisions of this Chapter shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law. [36-A. Power to order repayment of deposit.-(1) Every deposit accepted by a housing finance institution which is a company unless renewed, shall be repaid in accordance with the terms and conditions of such deposit. (2) Where a housing finance institution which is a company has failed to repay any deposit or part thereof in accordanc....
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....y other subordinate legislation. Moreover, even if it exists, any such request would be wholly repugnant to provisions of the Code, which provide for a specific manner and priority of payment; hence will not be applicable in terms of S. 238 of the Code. The minimum amount a creditor is mandatorily required to be paid in a Resolution Plan, i.e. liquidation value. 12.28 Further, it is well-established law that when two special statutes contain a non-obstante clause, the latter will prevail over the earlier statute. In case of any inconsistency between the provision of the Code and any other enactment, the provision of the Code will prevail. Therefore, provisions of the Insolvency and Bankruptcy Code enacted later will override effect over the NHB Act and the RBI Act by the non-obstante clause. 12.29 In the case of Innoventive Industries Limited vs ICICI Bank (2018) 1 SCC 407, the Hon'ble Supreme Court has held that in case of any inconsistency between the provisions of Code and any other law, the provisions of the Code shall prevail. Therefore, Insolvency & Bankruptcy Code which was enacted later, will override the NHB Act and RBI Act by the nonobstante clause of Section 23....
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....on need not prove the exact manner of misappropriation. Once the 'entrustment' is admitted or proved, as has been done in the present case, the onus lies on the Accused to prove that the entrusted property was dealt by him in an acceptable manner. Thus, misappropriation with this dishonest intention is one of the most important ingredients of proof of 'criminal breach of trust'. The offence under Section 409 IPC can be committed in varied manners, and as we are concerned with its applicability in the case of a bank officer, it is fruitful to point out that the banker is one who receives money to be drawn out again when the owner has occasion for it. Since the present case involves a conventional bank transaction, it may be further noted that in such situations, the customer is the lender and the Bank is the borrower, the latter being under a super added obligation of honouring the customer's cheques up to the amount of the money received and still in the banker's hands. The money that a customer deposits in a bank is not held by the latter on trust for him. It becomes a part of the banker's funds who is under a contractual obligation to pay the sum depos....
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....se of homebuyers' issue, once homebuyers entered into an agreement with a developer and when their relations entered into turbulence and not in a position to become normal, the relation in between them will become creditor and debtor and the person under obligation shall refund the money of the homebuyers. In the given case, JAL deposited money on behalf of JIL for utilisation of the same to the homebuyers of the Corporate Debtor. Therefore, it is evident that this deposit is made towards an obligation. When any money is received towards an obligation, it can neither be construed as trust money nor construed as governed by constructive trust, therefore we have not found any merit to say that this money is governed by trust concept." 12.35 Therefore, it is clear that the relationship between the customer and the Bank is the creditor and debtor and not a trustee. The Bank is not a trustee of money deposited by customers. In this case, the Corporate Debtor, i.e. DHFL, took a fixed deposit from their customers on the agreed interest on the amount invested in fixed deposits. Therefore, the relationship of the DHFL with the fixed deposit holders is that of a creditor and debtor an....
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.... outside the resolution process, the appellants who are also CoC members (other CoC members being banks, etc. are acting in a silo for obtaining funds at the outset, which is not only against the interest of all the stakeholders but also against a holistic resolution for maximisation of value & distribution of funds between different classes of creditors. 12.39 As per the decision of the Hon'ble Supreme Court in Rajendra K Bhutta v Maharashtra Housing and Area Development Authority and others reported in 2020 SCC online SC 292 (para 26), it is settled that provisions of section 14 of the IBC must be strictly observed. Section 14 of IBC inter alia prohibits alienation, transfer, disposal of any asset of the Corporate Debtor. Since IBC is a time-bound process, every delay is the death knell for the Corporate Debtor. The object behind imposing moratorium under Section 14 is to maintain the status quo for the Corporate Debtor so maximisation of value of assets and laws of recovery to the creditors of the Corporate Debtor. Therefore, any payment to the Appellant during the moratorium regarding fixed deposits or interest would violate Section 14 of IBC. 12.40 Further, there is ....
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....he Code. In the adjudicatory process concerning a resolution plan under IBC, there is no scope for interference with the commercial aspects of the decision of the CoC; and there is no scope for substituting any commercial term of the resolution plan approved by the CoC. Within its limited jurisdiction, if the Adjudicating Authority or the Appellate Authority, as the case may be, would find any shortcoming in the resolution plan vis-à-vis the specified parameters, it would only send the resolution plan back to the Committee of Creditors, for re-submission after satisfying the parameters delineated by Code and exposited by this Court. 12.43 Further, in the case of Ebix Singapore (P) Ltd. v. Committee of Creditors of Educomp, 2021 SCC OnLine SC 707 Hon'ble Supreme Court has observed that; 115. A reading together of the UNCITRAL Guide and the BLRC Report clarifies, in no uncertain terms, that the procedure designed for the insolvency process is critical for allocating economic coordination between the parties who partake in, or are bound by the process. This procedure produces substantive rights and obligations. For instance, the composition of the CoC, the metho....
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....in granting reliefs that may run counter to the timeliness and predictability that is central to the IBC. Any judicial creation of a procedural or substantive remedy that is not envisaged by the statute would not only violate the principle of separation of powers, but also run the risk of altering the delicate coordination that is designed by the IBC framework and have grave implications on the outcome of the CIRP, the economy of the country and the lives of the workers and other allied parties who are statutorily bound by the impact of a resolution or liquidation of a Corporate Debtor. 12.44 Hon'ble Supreme Court has observed that while exercising the interpretative task by the Adjudicating Authority and the Appellate Authority, the powers are limited, to the extent that infrastructure under the Code is sufficiently developed to enable to take critical decisions for maximisation of the value of the Corporate Debtor and to keep it as a going concern. 12.45 The Hon'ble Supreme Court has further crystallised the powers of the NCLT/NCLAT by specifying that under Section 60 (5) (c) of the IBC or Rule 11 of NCLT Rules, powers are limited to the extent relating to the borde....
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....es Section, 238 of the IB Code does not override any requirement of law governing the actions of the DHFL must be followed. 12.49 Further, in case of Pratap Technocrats Private Limited ,2021 SCC Online SC 569, Hon'ble Supreme Court has held; 58. Indubitably, the inquiry in such an appeal would be limited to the power exercisable by the resolution professional under Section 30(2) of the I&B Code or, at best, by the adjudicating authority (NCLT) under Section 31(2) read with Section 31(1) of the I&B Code. No other inquiry would be permissible. Further, the jurisdiction bestowed upon the appellate authority (NCLAT) is also expressly circumscribed. It can examine the challenge only in relation to the grounds specified in Section 61(3) of the I&B Code, which is limited to matters "other than" enquiry into the autonomy or commercial wisdom of the dissenting financial creditors. Thus, the prescribed authorities (NCLT/NCLAT) have been endowed with limited jurisdiction as specified in the I&B Code and not to act as a court of equity or exercise plenary powers." 12.50 Based on the above discussion, it is clear that NCLT or NCLAT have been endowed with limited jurisdiction ....