Delhi High Court
M/S Sharda Ispat Limited (Sil) vs Union Of India & Ors on 25 September, 2017
$~78
*IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C)No.8565/2017
% Date of decision : 25th September, 2017
M/S SHARDA ISPAT LIMITED (SIL) ..... Petitioner
Through : Mr. Ashok Kr. Jain,
Mr. Pankaj Jain and
Ms. Priyanka Das, Advs.
versus
UNION OF INDIA & ORS ..... Respondents
Through : Mr. Dev. P. Bhardwaj, CGSC
for R-1/UOI with Mr. Satya
prakash Singh and Mr.
Surender Kumar, Advs.
Mr. Abhishek Anand and Ms.
Srishti Kapoor, Advs. for R-3
CORAM:
HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE C.HARI SHANKAR
JUDGMENT (ORAL)
GITA MITTAL, ACTING CHIEF JUSTICE
1. This writ petition has been filed by the petitioner pointing out
that by an order dated 21st January, 2010 (page 50), the Board of
Industrial & Financial Reconstruction ('BIFR' hereafter) sanctioned a
scheme (SS10) for demerger of two companies namely M/s Sharda
Ispat Industries Ltd. (SIIL) and the Sarda Power and Steel Limited
(SPSL) which demerger was being worked out.
2. Due to the intervention of the Sick Industries Companies
(Special Provisions) Repel Act, 2003 and Section 252 of the
Insolvency and Bankruptcy Code, 2016, the proceedings before the
BIFR abated.
3. The petitioner has submitted that the BIFR had passed an order
dated 26th March, 2013 (page 90). So far as the provisions before the
erstwhile BIFR were concerned, orders dated 26th March, 2013 and
26th May, 2016 specifically issued directions and observations so far
as the conduct of the Bombay Stock Exchange vis-a-vis the aforesaid
scheme with regards to the two companies were concerned.
4. The petitioner is aggrieved that by virtue of abatement of the
proceedings before the BIFR, the petitioner has been rendered
remediless so far as the violation by the Bombay Stock Exchange is
concerned.
5. Mr. Abhishek Anand, learned counsel appearing for the IDBI
has drawn our attention to the notification bearing SO1683(E) dated
24th May, 2017 issued by the Government of India in exercise of
powers under sub-section 1 of Section 242 of the Insolvency and
Bankruptcy Code, 2016 (page 138) which inter alia provides as under :
"2. In the Insolvency and Bankruptcy Code,
2016, in the Eighth Schedule, relating to amendment
to the Sick Industrial Companies (Special Provisions)
Repeal Act, 2003 in section 4, in clause (b), after the
second proviso, the following provisos shall be
inserted, namely :-
"Provided also that any scheme sanctioned
under sub-section (4) or any scheme under
implementation under sub-section (12) of section 18
of the Sick Industrial Companies (Special Provisions)
Act, 1985 shall be deemed to be an approved
resolution plan under sub-section (1) of section 31 of
the Insolvency and Bankruptcy Code, 2016 and the
same shall be dealt with, in accordance with the
provisions of Part II of the said Code.
Provided also that in case, the statutory period
within which an appeal was allowed under the Sick
Industrial Companies (Special Provisions) Act, 1985
against an order of the Board had not expired as on
the date of notification of this Act, an appeal against
any such deemed approved resolution plan may be
preferred by any person before National Company
Law Appellate Tribunal within ninety days from the
date of publication of this order."
6. It would, therefore, appear that the scheme which was approved
by the BIFR so far as the companies in question are concerned, is
deemed to be an approved resolution under sub-section (1) of Section
31 of the Insolvency and Bankruptcy Code, 2016.
7. An examination of the Insolvency and Bankruptcy Code, 2016
would show that the legislature has, in Section 74 thereof, provided
for strict punishments for contravention of the resolution under
Section 31(1). Jurisdiction is vested, therefor, on the "Adjudicating
Authority" (by Section 81) which is defined, by Clause (1) of Section
5, as the National Company Law Tribunal. The petitioner, therefore,
has an appropriate remedy available under, Section 74 of the
Insolvency and Bankruptcy Code, 2016, before the National Company
Law Tribunal exercising jurisdiction therein.
8. In view of the above, learned counsel for the petitioner prays for
leave to withdraw this writ petition with liberty to invoke the said
remedy in accordance with law.
9. This writ petition is disposed of as withdrawn with liberty as
prayed for.
10. We may note that the petitioner has also assailed the
constitutional validity of the Sick Industrial Companies (Special
Provisions) Repeal Act, 2003. This question is left open.
11. We also make it clear that we have not expressed any opinion
on the merits of the petitioner's case.
ACTING CHIEF JUSTICE
C.HARI SHANKAR, J
SEPTEMBER 25, 2017/kr
