Hiranmaye Energy Limited And ... vs West Bengal Electricity ...
2021 Latest Caselaw 3541 Cal

02-07-2021
 ct no. 13
  Sl.3
   sp                       WPA 10679 of 2021
                              (CAN 1 of 2021)
                         (Through Video Conference)
                      Hiranmaye Energy Limited and another
                                 Versus
                        West Bengal Electricity Regulatory
                           Commission and others
             Mr. S.N. Mookherjee, Sr. Adv.,
             Mr. Ratnanko Banerjee, Sr. Adv.,
             Mr. Sounak Mitra,
             Mr. Amitava Mitra,
             Ms. Sayani Bhattacharya
                                      ....for the petitioners
             Mr. Ranjan Bachawat, Sr. Adv.
             Mr. S. Mukherji,
             Mr. Indradeep Bose.
                       ....for the applicant (CAN 1 of 2021)
             Mr. Sudipto Sarkar, Sr. Adv.,
             Mr. Saurav Panda,
             Ms. Suhani Dwivedi,
             Mr. Zeeshan Khan,
             Ms. Trisha Mukherjee,
             Mr. Deepanjan Dutta Roy,
             Ms. Aishani Das
                          ....for the respondent nos. 3 & 4.

The order dated June 29, 2021 has been listed for correction.

A large number of typographical errors have crept in the order dated June 29, 2021. Since the entire order cannot be corrected, the same is recalled and the following order is passed, without changing the reasoning or decision.

The writ petitioner no. 1 is engaged in the

business of generation of power. It supplies the

generated power to the WBSEDCL. For the

purpose of its business, the writ petitioner no.

1 obtained loans and finance from the Power

Finance Corporation Limited and REC Limited

being respondent nos. 3 and 4 respectively.

The said credit facilities were continuing since

2012. Outstanding dues of Rs.3427 Crores

each towards respondent nos. 3 and 4 became

due and payable by the end of the year 2020.

At the request of the petitioner no. 1, the

respondent Nos. 3 and 4 agreed to a

restructuring of the dues. The restructuring

was conditional. The conditions inter alia were

as follows :-

a) The cutoff date of the Restructuring

proposal was 30.09.2021

b) A pass through in fuel charges was

to be within a range of 20

paisa/kwh of the variable cost of

the last 2 months as on 28th

February, 2021. Such tariff would

have to be approved by the WBERC-

respondent no.1.

c) The initial Debt Service Reserve

Account (DSRA) was required to be

maintained equivalent to the next

succeeding month.

d) A priority debt of 83 crores was also

required to be made available by the

petitioner prior to implementation of

resolution plan.

e) Working capital of about 125 crores

was also to be made available by the

petitioner.

f) A regular DSRA to meet 2 months of

existing debt of rescheduled loans

was also required to be maintained.

Upon fulfillment of the said conditions the

restructuring plan was to take effect from 19th

February, 2021.

There were a large number of other

conditions which the petitioner no. 1 was

required to comply with.

The said restructuring of debt was

proposed in terms of the Reserve Bank of India

(Prudential Framework for Resolution of

Stressed Assets) Directions 2019. The principal

object and purpose of such Directions was to

ensure early identification of Stressed Assets

and ensuring a time bound resolution thereof.

The tariff order was not approved by the

WBERC until 31st May, 2021. The validity of

the restructuring proposal was extended from

time to time. Several meetings were held

between the parties inter alia on 17.02.2021.

However, on 16th June, 2021 the respondent

nos. 3 and 4 instituted proceedings under

Section 7 of the Insolvency and Bankruptcy

Code. A debt due of about Rs. 2,183 crores was

claimed against the petitioner.

Mr. S. N. Mookherjee, learned Senior

Counsel appearing for the writ petitioners

would argue before this Court that the actions

of the respondent nos. 3 and 4 are unfair,

arbitrary and illegal for the following reasons:-

           a) The         cancellation           of             the

             restructuring           plan     was          never

             communicated             formally        to        the

             petitioner.

b) A formal recall notice of the loans

and advances was never issued by

the respondent nos. 3 and 4.

c) The restructuring plan could not

have been cancelled or withdrawn

by the respondent nos. 3 and 4

since the delay in issuance of tariff

plan could not be attributed to the

petitioner.

d) Even otherwise the respondent no.

1/WBERC could not have issued

the tariff plan in view of the model

code of conduct having kicked in

from 21st February, 2021 until

02.05.2021 for the then impending

Assembly Elections.

     On       being           questioned      about             the

maintainability      of       the   writ    petition       it    is

submitted that the respondent nos. 3 and 4

are other authorities under Article 12 of the

Constitution and have acted arbitrarily and

unfairly in cancelling the restructuring

proposal and hence a writ petition under

Article 226 of the Constitution can be

maintained against such actions. Such

grievance cannot be raised in a proceeding

under Section 7 of the Insolvency and

Bankruptcy Code.

In support of his argument Mr. S. N.

Mookherjee relied on the decisions of the

Supreme Court in the case of ABL

International Ltd. and another VS. Export

Credit Guarantee Corporation of India Ltd.

and others reported in (2004) 3 SCC 553; the

case of State of UP Versus Sudhir Kumar

Singh and others reported in 2020 SCC

Online SC 847 and Unitech Limited and

others Vs. Telangana State Industrial

Infrastructure Corporation (TSIIC) and

others reported in 2021 SCC Online SC 99 to

the effect that even in the area of private

contracts the actions of the State can be

questioned by a writ court.

Counsel placed paragraph 23 of the

Sudhir Kumar Singh decision (supra) :-

"23. It may be added that every case in which a citizen/person knocks at the doors of the writ court for breach of his or its fundamental rights is a matter which contains a "public law element", as opposed to a case which is concerned only with breach of contract and damages flowing therefrom. Whenever a plea of breach of natural justice is made against the State, the said plea, if found sustainable, sounds in constitutional law as arbitrary State action, which attracts the provisions of Article 14 of the Constitution of India - see Nawabkhan Abbaskhan v. State of Gujarat (1974) 2 SCC 121 at paragraph 7. The present case is, therefore, a case which

involves a "public law element" in that the petitioner (Respondent No. 1 before us) who knocked at the doors of the writ court alleged breach of the audi alteram partem rule, as the entire proceedings leading to cancellation of the tender, together with the cancellation itself, were done on an ex parte appraisal of the facts behind his back."

Inter alia paragraphs 38 and 40 of the

Unitech Ltd. (supra) were also placed :-

"38. Much of the ground which was sought to be canvassed in the course of the pleadings is now subsumed in the submissions which have been urged before this Court on behalf of the State of Telangana and TSIIC. As we have noted earlier, during the course of the hearing, learned Senior Counsel appearing on behalf of the State of Telangana and TSIIC informed the Court that the entitlement of Unitech to seek a refund is not questioned nor is the availability of the land for carrying out the project being placed in issue. Learned Senior Counsel also did not agitate the ground that a remedy for the recovery of moneys arising out a contractual matter cannot be availed of under Article 226 of the Constitution. However, to clear the ground, it is necessary to postulate that recourse to the jurisdiction under Article 226 of the Constitution is not excluded altogether in a contractual matter. A public law remedy is available for enforcing legal rights subject to well-settled parameters.

40. This exposition has been followed by this Court, and has been adopted by three- judge Bench decisions of this Court in State of UP v. Sudhir Kumar9 and Popatrao Vynkatrao Patil v. State of Maharashtra10. The decision in ABL International, cautions that the plenary power under Article 226 must be used with circumspection when other remedies have been provided by the contract. But as a statement of principle, the jurisdiction under Article 226 is not excluded in contractual matters. Article 23.1 of the Development Agreement in the present case mandates the parties to resolve their disputes through an arbitration. However, the presence of an arbitration clause within a contract between a state instrumentality and a private party has not acted as an absolute bar to availing remedies under Article 226.11 If the state instrumentality violates its constitutional mandate under Article 14 to act fairly and reasonably, relief under the plenary powers of the Article 226 of the Constitution would lie. This principle was recognized in ABL International:

"28. However, while entertaining an objection as to the maintainability of a

writ petition under Article 226 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. (See Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1].) And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction."

(emphasis supplied)

Mr. Mookherjee has laboriously placed

various paragraphs of the decision of the

Supreme Court in Joshi Technologies

International INC. Versus Union of India and

others reported in (2015) 7 SCC 728 to argue

that a writ court under Article 226 of the

Constitution of India is not prevented from

exercising jurisdiction against the State even in

an area which is purely contractual in nature.

Mr. Ranjan Bachawat, learned Senior

Counsel appearing for the applicant in CAN 1

of 2021 Bhaskar Silicon Pvt. Ltd. supports the

case of the writ petitioner calling for

interference by this court arguing that the

actions of the respondent nos. 3 and 4 would

also adversely affect the business and

existence of his client. He has applied by way

of CAN 1 of 2021 for being impleaded as party

respondent. Such application is allowed and he

has been heard.

Mr. Sudipto Sarkar, learned Senior

Advocate appearing for the respondent nos. 3

and 4 would submit that the actions of his

client are purely under a private Loan

agreement and have no public law element. It

is next argued that the petitioners participated

in a meeting of the consortium lenders held on

17.02.2021 online in respect of the

development and steps taken by the parties

towards fulfillment of the condition precedent

of the restructuring proposal. The failure of the

respondents was duly noted in such minutes

and there was no need for any formal notice to

recall the loans and advances or to cancel the

restructuring proposal. It is further submitted

that the authorities under the Insolvency and

Bankruptcy Code have sufficient powers to

address the concerns of the writ petitioners

against his clients. He relies upon decisions of

the Hon'ble Supreme Court of India in the case

of A. Navinchandra Steels Private Limited -

Vs. - SREI Equipment Finance Limited &

Ors. reported in 2021 SCC OnLine SC 149

and in the case of Babulal Vardharji Gurjar -

Vs. - Veer Gurjar Aluminum Industries

Private Limited & Anr. reported in (2020) 15

Supreme Court Cases 1 respectively. Mr.

Sarkar sums up his argument by saying that

while it may be true that the writ court's

jurisdiction to interfere with the State's action

in contractual matters has not been ousted,

this is not a fit case for this Court to exercise

jurisdiction under Article 226 against his

clients.

Having heard the parties at length over 3

days this Court now proceeds to deal with the

same.

The writ petitioner no.1 was already in

dire financial straits to the tune of about 3427

Crores each to the respondent nos. 3 and 4 as

on the cutoff date for which it required debt

restructuring. The actions of the respondent

nos.3 and 4 in the instant case are purely

contractual in nature and were guided

specifically by the terms and conditions of the

restructuring proposal. In matters of this

nature, the respondent nos.3 and 4 are guided

by and must act strictly on commercial

considerations, for recovery of their financial

dues. The respondents appear to have given

substantial leverage to the writ petitioner no.1

to comply with the terms and conditions of the

restructuring proposal which the petitioner has

failed.

It is however true that the issuance and

passing of the tariff order was not within the

control of the writ petitioner no.1. The same

was required to have been done by the

respondent no.1. The said tariff order was

issued albeit with some discrepancies only on

31.05.2021. The writ petitioners have already

filed an application for review of the said order

in view of the discrepancies thereat. The

compliance and actual tariff at which the

electricity would be sold by the writ petitioner

no.1 to the WBSEDCL was not clear even in

the middle of June, 2021 or even as on date.

The REC and PFC cannot be expected to wait

indefinitely for compliance and fulfillment of all

terms by the writ petitioners. This would be

unfair and improper and would seriously harm

their financial health. One must bear in mind

that the said respondents are also required to

fund and finance a large number of other

electricity generating companies both public

and private. There was therefore no arbitrary

or unfair action on the part of the respondent

nos. 3 & 4 in cancelling the restructuring offer.

The relations between the petitioner and

respondent nos. 3 and 4 were purely

contractual and no part of the action of the

respondents had any public law element in

canceling the restructuring proposal.

The writ petitioner no.1 did not fulfill the

conditions stipulated in the restructuring

proposal like providing for DSRA and a margin

of 83 Crores, as already recorded in the

consortium meeting dated 17.02.2021. The

respondent nos. 3 and 4 have not acted

arbitrarily or unfairly.

It is indeed true that every State Authority

or instrumentality is required to act in fairness

even in a purely private contract but it is

equally true that the actions of the respondent

nos.3 and 4 are also required to factor in

commercial considerations. Hence the

institution of proceeding by the PFC and REC,

under the provisions of the Insolvency and

Bankruptcy Code, 2016 before the National

Company Law Tribunal, cannot be faulted.

One cannot accept the arguments of the

writ petitioners that the Authorities under the

Insolvency and Bankruptcy Code, 2016 would

not be able to assess the propriety of the

decisions of the respondent nos. 3 and 4. The

provisions of the IBC, 2016 are not meant only

for determination of debt but also aim at

restructuring and or revival of Companies that

are in financial distress, particularly like the

petitioners.

A Writ Court under Article 226 of the

Constitution of India does not possess the

expertise or wherewithal or the necessary

inputs required for deciding the commercial

reasons for cancellation of the restructuring

proposal or the rehabilitation of the writ

petitioner.

Reference in this regard is made to the

decision of the Hon'ble Supreme Court of India

in the case of A. Navinchandra Steels

Private Limited (supra).

"24. A conspectus of the aforesaid authorities would show that a petition either under Section 7 or Section 9 of the IBC is an independent proceeding which is unaffected by winding up proceedings that may be filed qua the same company. Given the object sought to be achieved by the IBC, it is clear that only where a company in winding up is near corporate death that no transfer of the winding up proceeding would then take place to the NCLT to be tried as a proceeding under the IBC. Short of an irresistible conclusion that corporate death is inevitable, every effort should be made to resuscitate the corporate debtor in the larger public interest, which includes not only the workmen of the corporate debtor, but also its creditors and the goods it produces in the larger interest of the economy of the country. It is, thus, not possible to accede to the argument on behalf of the Appellant that given Section 446 of the Companies Act, 1956/Section 279 of the Companies Act, 2013, once a winding up petition is admitted, the winding up petition should trump any subsequent attempt at revival of the company through a Section 7 or Section 9 petition filed under the IBC. While it is true that Sections 391 to 393 of the Companies Act, 1956 may, in a given factual circumstance, be availed of to pull the company out of the red, Section 230(1) of the Companies Act, 2013 is instructive and provides as follows:

"230. Power to compromise or make arrangements with creditors and members.-- (1) Where a compromise or arrangement is proposed--

(a) between a company and its creditors or any class of them; or

(b) between a company and its members or any class of them,

the Tribunal may, on the application of the company or of any creditor or member of the company, or in the case of a company which is being wound up, of the liquidator, appointed under this Act or under the Insolvency and Bankruptcy Code, 2016, as the case may be, order a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be, to be called, held and conducted in such manner as the Tribunal directs.

Explanation.--For the purposes of this sub- section, arrangement includes a reorganisation of the company's share capital by the consolidation of shares of different classes or by the division of shares into shares of different classes, or by both of those methods.

xxx xxx xxx"

In Babulal Vardharji Gurjar (supra) the

Supreme Court held that:-

"20.3.1. In Swiss Ribbons [Swiss Ribbons (P) Ltd. v. Union of India, (2019) 4 SCC 17] , while upholding the constitutional validity of IBC, this Court took note, inter alia, of the pre-existing state of law as also the objects and reasons for enactment of the Code; and while observing that the focus of the Code was to ensure revival and continuation of the corporate debtor, where liquidation is to be availed of only as a last resort, this Court pointed out that on its scheme and framework, the Code was a beneficial legislation to put the corporate debtor on its feet, and not a mere recovery legislation for the creditors. This Court said (SCC p. 55, paras 27 & 28) "27. As is discernible, the Preamble gives an insight into what is sought to be achieved by the Code. The Code is first and foremost, a Code for reorganisation and insolvency resolution of corporate debtors. Unless such reorganisation is effected in a time-bound manner, the value of the assets of such persons will deplete.

Therefore, maximisation of value of the assets of such persons so that they are efficiently run as going concerns is another very important objective of the Code. This, in turn, will promote entrepreneurship as the persons in management of the corporate debtor are removed and replaced by entrepreneurs. When, therefore, a resolution plan takes off and the corporate debtor is brought back into the economic mainstream, it is able to repay its debts, which, in turn, enhances the viability of credit in the hands of banks and financial institutions. Above all, ultimately, the interests of all stakeholders are looked after as the corporate debtor itself becomes a beneficiary of the resolution scheme--workers are paid, the creditors in the long run will be repaid in full, and

shareholders/investors are able to maximise their investment. Timely resolution of a corporate debtor who is in the red, by an effective legal framework, would go a long way to support the development of credit markets. Since more investment can be made with funds that have come back into the economy, business then eases up, which leads, overall, to higher economic growth and development of the Indian economy. What is interesting to note is that the Preamble does not, in any manner, refer to liquidation, which is only availed of as a last resort if there is either no resolution plan or the resolution plans submitted are not up to the mark. Even in liquidation, the liquidator can sell the business of the corporate debtor as a going concern. (See ArcelorMittal [ArcelorMittal (India) (P) Ltd. v. Satish Kumar Gupta, (2019) 2 SCC 1] at para 83, footnote 3).

28. It can thus be seen that the primary focus of the legislation is to ensure revival and continuation of the corporate debtor by protecting the corporate debtor from its own management and from a corporate death by liquidation. The Code is thus a beneficial legislation which puts the corporate debtor back on its feet, not being a mere recovery legislation for creditors. The interests of the corporate debtor have, therefore, been bifurcated and separated from that of its promoters/those who are in management. Thus, the resolution process is not adversarial to the corporate debtor but, in fact, protective of its interests. The moratorium imposed by Section 14 is in the interest of the corporate debtor itself, thereby preserving the assets of the corporate debtor during the resolution process. The timelines within which the resolution process is to take place again protects the corporate debtor's assets from further dilution, and also protects all its creditors and workers by seeing that the resolution process goes through as fast as possible so that another management can, through its entrepreneurial skills, resuscitate the corporate debtor to achieve all these ends."

(emphasis supplied)

21. The expositions abovementioned make it clear that the Insolvency and Bankruptcy Code, 2016 has been enacted to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons and other entrepreneurs in a time-bound manner so as to ensure maximisation of value of assets of such persons and to balance the interest of all the stakeholders. As regards corporate debtor, the primary focus of the Code is to ensure its revival and continuation by protecting it from its own management and, as far as feasible, to save it from liquidation. As tersely put by this Court in Swiss Ribbons [Swiss Ribbons (P) Ltd. v. Union of India, (2019) 4 SCC 17] , the Code is thus a beneficial legislation which puts the corporate debtor back on its feet, not being a mere recovery legislation for creditors."

Merely because an instrumentality of

State is engaged in business it cannot be put

to any more disadvantage than a private

player. The State cannot also be required to

grant concessions outside the contract and

outside what a private player would ordinarily

be required to give. Under the garb of requiring

fairness in action even State business entities

cannot be imposed with terms & conditions for

non-commercial considerations.

One must note that the State entities are

required to compete with private corporations

who are far too quick & opportunistic in

commercial matters. While it is indeed true

that a State instrumentality is expected to act

fairly and in a non-arbitrary manner, the PFC

& REC are also driven by a profit motive and

their functions cannot be fettered to drive them

towards financial disadvantage. This would

lead to their ruin & endanger large number of

other power companies and persons dependent

on them.

The dicta of the Supreme Court in Para 70

of decision Joshi Technologies (supra) is of

useful reference. Interference under Article 226

in contractual matters of the State is definitely

permitted, but the same is done sparingly and

only in exceptional cases.

"70. Further, the legal position which emerges from various judgments of this

Court dealing with different situations/aspects relating to contracts entered into by the State/public authority with private parties, can be summarised as under:

70.1. At the stage of entering into a contract, the State acts purely in its executive capacity and is bound by the obligations of fairness. 70.2. State in its executive capacity, even in the contractual field, is under obligation to act fairly and cannot practise some discriminations.

70.3. Even in cases where question is of choice or consideration of competing claims before entering into the field of contract, facts have to be investigated and found before the question of a violation of Article 14 of the Constitution could arise. If those facts are disputed and require assessment of evidence the correctness of which can only be tested satisfactorily by taking detailed evidence, involving examination and cross-examination of witnesses, the case could not be conveniently or satisfactorily decided in proceedings under Article 226 of the Constitution. In such cases the Court can direct the aggrieved party to resort to alternate remedy of civil suit, etc. 70.4. Writ jurisdiction of the High Court under Article 226 of the Constitution was not intended to facilitate avoidance of obligation voluntarily incurred.

70.5. Writ petition was not maintainable to avoid contractual obligation. Occurrence of commercial difficulty, inconvenience or hardship in performance of the conditions agreed to in the contract can provide no justification in not complying with the terms of contract which the parties had accepted with open eyes. It cannot ever be that a licensee can work out the licence if he finds it profitable to do so: and he can challenge the conditions under which he agreed to take the licence, if he finds it commercially inexpedient to conduct his business. 70.6. Ordinarily, where a breach of contract is complained of, the party complaining of such breach may sue for specific performance of the contract, if contract is capable of being specifically performed. Otherwise, the party may sue for damages. 70.7. Writ can be issued where there is executive action unsupported by law or even in respect of a corporation there is denial of equality before law or equal protection of law or if it can be shown that action of the public authorities was without giving any hearing and violation of principles of natural justice after holding that action could not have been taken without observing principles of natural justice.

70.8. If the contract between private party and the State/instrumentality and/or agency of the State is under the realm of a private law and there is no element of public law, the normal course for the aggrieved party, is to invoke the remedies provided under ordinary civil law rather than approaching the High Court under Article 226 of the Constitution of India and invoking its extraordinary jurisdiction.

70.9. The distinction between public law and private law element in the contract with the State is getting blurred. However, it has not been totally obliterated and where the matter falls purely in private field of contract, this Court has maintained the position that writ petition is not maintainable. The dichotomy between public law and private law rights and remedies would depend on the factual matrix of each case and the distinction between the public law remedies and private law field, cannot be demarcated with precision. In fact, each case has to be examined, on its facts whether the contractual relations between the parties bear insignia of public element. Once on the facts of a particular case it is found that nature of the activity or controversy involves public law element, then the matter can be examined by the High Court in writ petitions under Article 226 of the Constitution of India to see whether action of the State and/or instrumentality or agency of the State is fair, just and equitable or that relevant factors are taken into consideration and irrelevant factors have not gone into the decision- making process or that the decision is not arbitrary.

70.10. Mere reasonable or legitimate expectation of a citizen, in such a situation, may not by itself be a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirements of due consideration of a legitimate expectation forms part of the principle of non- arbitrariness.

70.11. The scope of judicial review in respect of disputes falling within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes."

Any restructuring proposal or contract

like a loan contract is time bound. Time is the

essence of such contract. The Petitioners

should have known this while accepting the

restructuring proposal. The Petitioners did not

appear serious about benefitting from the

restructuring proposal and the same was a

subterfuge to delay the inevitable

consequences of its financial failure.

The petitioners ought to have known

about the impending elections and the

certainty of the impending Model Code of

Conduct. The Assembly elections in the State

were fixed at least 3 years earlier by the

Election Commission of India. The petitioners

cannot be allowed to use the model code of

conduct, as a ruse to cover up their own

omissions. The petitioners have not

demonstrated that they have fulfilled the

conditions of the Initial DSRA or the main

DSRA. The petitioner could not have any

legitimate expectation of continuation of the

restructuring proposal indefinitely.

The omissions and failures of the

petitioners were duly recorded in the minutes

of meeting dated 17th February, 2021, there

was substantial notice of cancellation of

restructuring proposal. No prejudice could

therefore have been caused to the petitioners

by non-issuance of a formal recall notice of the

loans or cancellation of restructuring proposal.

In the facts of the case it would have been a

useless formality.

The Directions of the RBI, 2019 have been

placed by Mr. Mukherjee to argue that since

the restructuring was done thereunder, the

action of the respondent nos. 3 & 4 can be

scrutinized under Art. 226. The restructuring

was already done as per the 2019 Directions.

The Petitioners have not been able to indicate

exactly which Directions has been violated or

has not been followed by the REC and PFC.

The 2019 Directions appear to have been

referred to in a desperate attempt to attract

cause of action under Art. 226. The petitioners

were afforded a restructuring proposal

essentially by reason of the 2019 Directions

and could not take advantage thereof. There is

some doubt as to whether the Directions have

statutory or binding force.

This Court therefore finds no arbitrariness

or unfairness in the actions of the respondent

no. 3 and 4. There is no violation of Article 14

of the Constitution of India. No violation of

Natural Justice is found.

Prayer (a) of the petition is ex facie illegal

and ridiculous. No authority can be compelled

by mandamus to review its orders on the

terms as applied for.

For the reasons stated hereinabove, this

Court is of the view that the disputes between

the writ petitioners and the respondent nos.3

and 4 cannot be entertained or decided in the

writ jurisdiction of the High Court under

Article 226 of the Constitution of India.

In view of the above, the instant writ

petition must fail and is hereby dismissed.

It is made clear that this Court has not in

any way entered into the merits of the claims of

the writ petitioners against the respondent

nos.3 and 4 or vice-versa.

The Authorities acting under the

Insolvency and Bankruptcy Code, 2016 shall

deal with the proceedings initiated under

Section 7 of the code, by the Respondent nos.3

and 4 against the petitioners independently

and uninfluenced by any observations made by

this Court hereinabove.

There will be no order as to costs.

All parties are directed to act on a server

copy of this order on usual undertaking.

(Rajasekhar Mantha, J.)