Gujarat High Court

Mega Innovative Crops Private Limited vs Gujarat Industrial Development ... on 1 December, 2023

Author: Vaibhavi D. Nanavati

Bench: Vaibhavi D. Nanavati

                                                                                       NEUTRAL CITATION




     C/SCA/19315/2022                                    ORDER DATED: 01/12/2023

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             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

             R/SPECIAL CIVIL APPLICATION NO. 19315 of 2022

                                   With
              R/SPECIAL CIVIL APPLICATION NO. 3043 of 2023
                                   With
               CIVIL APPLICATION (FOR STAY) NO. 1 of 2023
             In R/SPECIAL CIVIL APPLICATION NO. 3043 of 2023
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           MEGA INNOVATIVE CROPS PRIVATE LIMITED
                           Versus
     GUJARAT INDUSTRIAL DEVELOPMENT CORPORATION (GIDC)
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Appearance:
MS VAIBHAVI K PARIKH(3238) for the Petitioner(s) No. 1
MR RAVISH D BHATT(5867) for the Respondent(s) No. 1
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 CORAM:HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI

                               Date : 01/12/2023

                                  ORAL ORDER

1. By way of present petition, the petitioner herein has

prayed for the following reliefs:

"7. The Petitioner, therefore, prays that this Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, direction or order and be pleased to:

(a) direct the Respondent Corporation to issue a No Dues Certificate;

(b) pending the admission and final hearing of this petition, ad-

interim relief be granted directing the Respondent Corporation to initiate supply of water and commence operation of drainage system forthwith.

(d) provide for the cost of this petition."

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2. Heard Ms. Vaibhavi K. Parikh, learned advocate appearing

for the petitioner and Mr. Ravish D. Bhatt, learned advocate

appearing for the respondent - authority.

3. Ms. Vaibhavi K. Parikh, learned advocate appearing for

the petitioner, submitted that the petitioner herein is engaged

in the business of manufacturing of agro chemicals like

insecticides, pesticides and fungicides. The petitioner

established its plant in the year 2010 in wide 5000 sq. mtrs.

area in Panoli Industrial Estate situated at Plot No.415 nearby

N.H. No.8. Ms. Parikh, learned advocate, submitted that an

insolvency application being CP(IB) No.305/KB/2019 was filed

by Corporation Bank against Krrome Glass Private Limited, the

Corporate Debtor, under Section 7 of the Insolvency and

Bankruptcy Code, 2016 before the National Company Law

Tribunal, Kolkata Bench, which was admitted by order dated

17.01.2020 wherein, Mr. Ramchandra Dallaram Choudhary was

appointed as an Interim Resolution Professional of Krrome

Glass Private Limited, the Corporate Debtor.

3.1 Ms. Vaibhavi K. Parikh, learned advocate appearing for

the petitioner, submitted that on following due process of law,

the said Resolution Plan came to be approved by order dated

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25.11.2021 which is duly produced at Annexure - B, page 74,

wherein, the petitioner's plan being duly compliant with

statutory requirements as mandated under the Code, came to

be approved on 25.03.2021. The revised plan was submitted

by the RP before the National Company Law Tribunal (NCLT) by

an interlocutory application being IA(IB) No.438/KB/2021 for its

approval, which came to be duly approved and sanctioned vide

order dated 25.11.2021 observing that the Resolution Plan is in

accordance with Sections 30 and 31 of the IB Code and also

complies with Regulations 38 and 39 of the IBBI (Insolvency

Resolution Process for Corporate Persons) Regulations, 2016

by the NCLT sanctioning and approving the Resolution Plan

proposed by the petitioner.

3.2 Ms. Parikh, learned advocate appearing for the petitioner,

submitted that in light of the aforesaid order dated 25.11.2021

passed by the learned NCLT, the respondent - GIDC be directed

to issue No Due Certificate.

3.3 Reliance was placed on Paragraphs 9 and 10 of the said

order dated 25.11.2021 duly produced at page 92 and 93.

Placing reliance on the same, Ms. Parikh, learned advocate,

submitted that the petitioner herein undertakes to deposit the

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transfer fees/any other charges that may be levied by the GIDC

in case of change in the name of the Corporate Debtor or

transfer of assets of the Corporate Debtor to third party. It was

submitted that all the dues of GIDC pertaining to the period

prior to the effective date stand extinguished on sanction of

the Resolution Plan by the NCLT. The aforesaid was stand

granted by the NCLT and in view thereof, all the dues of Panoli

notified area pertaining to period prior to the effective date

stand extinguished upon sanction of the Resolution Plan by the

Adjudicating Authority.

3.4 Placing reliance on the aforesaid, it was submitted that

the said plan stands approved in favour of the petitioner and

the past dues by the respondent - GIDC as stated in the order

stand extinguished. It was submitted that considering the

settled position of law as laid down by the Hon'ble Apex Court

in 2021 SCC Online SC 313, the prayers as prayed for in the

present petition be allowed.

4. Mr. Ravish D. Bhatt, learned advocate appearing for the

respondent - GIDC, was not in a position to controvert the

aforesaid position of law that once the resolution is sanctioned,

all the earlier dues stand extinguished. However, it was

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submitted by Mr. Bhatt, learned advocate, that the transfer

fees be directed to be paid by the petitioner herein for the

prayers as prayed for that No Due Certificate be issued in

favour of the petitioner and that, the drainage and water

connection be reconnected.

5. Considering the submissions advanced by the learned

advocates appearing for the respective parties, this Court

deems it fit to refer to the ratio as laid down by the Hon'ble

Apex Court in 2021 SCC Online SC 313 in case of Ghanashyam

Mishra & Sons Pvt. Ltd., vs. Edelweiss Asset Reconstruction

Company Ltd., more particularly, paragraph 95(i), which reads

thus:

"95(i) That once a resolution plan is duly approved by the Adjudicating Authority under sub-section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan."

6. Considering the facts of the present case being

undisputed and uncontroverted that the Resolution Plan has

been sanctioned in favour of the petitioner, it is also apposite

to refer to paragraph 13 of the affidavit-in-reply filed by the

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respondent - GIDC, which reads thus:

"13. I further say and submit that the Respondent corporation does not dispute that the dues of the allottee have been reduced in terms of the approved Resolution Plan. However, the change in the shareholding pattern of the allottee will invite the payment of transfer fee apart from the past dues, in terms of the circular of the corporation dated 10.09.1996 which is annexed hereto and marked as Annexure R6 to the present reply and in terms of the said circular, in case of change in the shareholding pattern of a private limited company, the transfer fee will be required to be paid as a percentage of the allotment price as envisaged in point no 13 of the said circular. I say and submit that in such circumstance, when the transfer fee is required to be paid, which is quite distinct from the past dues, the same must be paid before any rights could be claimed against the corporation in connection with the plot in question."

6.1 It is also relevant to refer to paragraphs 9 and 10 of the

order passed by the NCLT dated 25.11.2021 in IA (IB)

No.438/KB/2021 in CP(IB) No.305/KB/2019, which read thus:

Sl. Ref to Relief, concessions and approvals Orders thereon No. Clause sought 9 i No transfer fees/any other charges Not granted. The Resolution Plan shall be levied by the GIDC in case cannot be in violation of any law for of change in the name of the the time being in force. Therefore, if Corporate Debtor or transfer of transfer fee/any other charges is assets of the Corporate Debtor to required to be paid, it shall be paid third party. and no waiver can be granted in this regard.

All the dues of GIDC pertaining to the period prior to the effective date shall stand extinguished upon sanction of the Resolution Plan by the Adjudicating Authority. Please note that the Corporate Debtor is being taken over by the Resolution Applicant as going concern for the purpose of revival of the Corporate Debtor and hence the said takeover of the Corporate Debtor should not be considered as transfer.

10 j No charges/fees/any other charges Not granted. The Resolution Plan shall be levied by the Panoli cannot be in violation of any law for Notified Area. the time being in force. All the dues of Panoli Notified Area Granted in terms of the judgment of pertaining to the period prior to the the Hon'ble Supreme Court in effective date shall stand Ghanashyam Mishra and Sons Pvt.

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extinguished upon sanction of the Ltd. v Edelweiss Asset Resolution Plan by the Adjudicating Reconstruction Company Ltd. Authority. wherein the Hon'ble Supreme Court has held in para 95(i) that once a resolution plan is duly approved by the Adjudicating Authority under sub-section (1) of section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Govt. any State Govt or any local authority, guarantors and other stakeholders.

7. Ms. Parikh, learned advocate for the petitioner, submitted

that the petitioner undertakes to comply with Clause 9 of the

aforesaid order dated 25.11.2021 passed in IA (IB)

No.438/KB/2021 in CP(IB) No.305/KB/2019.

7.1 In light of above, once the aforesaid is complied with by

the petitioner by depositing the transfer fees, the respondent

to undertake the exercise of grant of No Due Certificate and

initiate the supply of water and commence operation of

drainage system.

8. The present petition stands disposed of with direction to

the petitioner to approach the respondent - Corporation for

depositing the transfer fees. Once the petitioner approaches