Gujarat High Court
Daxin Gujarat Vij Company Ltd ... vs Essar Steel India Ltd on 24 February, 2023
Bench: Hemant M. Prachchhak
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 3659 of 2021
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2021
In R/FIRST APPEAL NO. 3659 of 2021
With
CIVIL APPLICATION (FOR ORDERS) NO. 1 of 2022
In R/FIRST APPEAL NO. 3659 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE THE CHIEF JUSTICE MS. JUSTICE SONIA GOKANI
and
HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK
==========================================================
1 Whether Reporters of Local Papers may be allowed YES
to see the judgment ?
2 To be referred to the Reporter or not ? YES
3 Whether their Lordships wish to see the fair copy NO
of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
==========================================================
DAXIN GUJARAT VIJ COMPANY LTD THROUGH EXECUTIVE ENGINEER
Versus
ESSAR STEEL INDIA LTD
==========================================================
Appearance:
LD SR ADV. MR.ANSHIN DESAI ASSISTED BY MS LILU K BHAYA(1705)
LD.SR.ADV. MR A.M. SINGHVI, WITH LD.SR.ADV.MR. NAVIN PAHWA,
WITH LD.SR.ADV.MR. RITIN RAI assisted by MS RUBY SINGH AHUJA, MR.
KEYUR GANDHI, MR. VISHAL GEHRANA, MR. NISARG DESAI, MS
PRAVALIKHA, MS RITIKA SINHA, MR.AMIT BHANDARI for GANDHI LAW
ASSOCIATESGANDHI LAW ASSOCIATES(12275) for the Defendant(s) No.
==========================================================
CORAM:HONOURABLE THE CHIEF JUSTICE MS. JUSTICE
SONIA GOKANI
and
HONOURABLE MR. JUSTICE HEMANT M.
PRACHCHHAK
Date : 24/02/2023
CAV JUDGMENT
(PER : HONOURABLE THE CHIEF JUSTICE
MS. JUSTICE SONIA GOKANI)
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
1. Aggrieved by the judgment and order
dated 28.09.2021 passed by the learned 2 nd
Additional Senior Civil Judge, Surat, where
the learned Judge dismissed the Commercial
Civil Suit No.4 of 2020 (Old Special Civil
Suit No.373/2016) filed by the appellant-
original plaintiff as having become
infructuous, the appellant chooses to
prefer the present appeal in the following
factual background.
1.1 The appellant is a company
registered under the provisions of the
Companies Act, 1956 undertaking the
business of supply and distribution of
electricity in the certain region in the
State of Gujarat.
1.2 The Essar Steel India Limited now
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
known as Arcelor Mittal Nippon Steel India
Limited ('the Arcelor Mittal' hereinafter)
sets up a plant for manufacture of hot
rolled steel coil at Hazira in the year
1991. To cater to the needs of Essar Steel
India Limited ('the Essar Steel'
hereinafter) and other group of Companies,
the appellant had set up a power plant of
515 megawatt at Hazira in the year 1995.
Out of 515 megawatt of electricity
generated/produced by the Essar Power
Limited, 300 megawatt of electricity was to
be supplied to Gujarat Electricity Board by
entering into a power purchase agreement
dated 30.05.1996. Remaining 215 megawatt of
electricity generated/produced by the Essar
Power Limited was to be consumed by the
group companies of the Essar Steel India
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
Limited only.
1.3 Another group company of Essar
Steel India Limited being Bhander Power
Limited had been set up as an additional
captive power plant of 505 megawatt
exclusively for its captive use at Hazira
in the year 2005. Electricity generated
from power plant of Bhander Power Limited
and Essar Power Limited 505 megawatt and
515 megawatt respectively was to be
exclusively used by the group of the
companies whereas the Essar Steel was to
consume the electricity supplied by the
present appellant. For supply of
electricity from internal power plant of
505 megawatt and 515 megawatt, the group
companies had set up a sub-station
including Bus-bar.
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
1.4 A dispute had been raised with
respect to the wheeling charges on the
ground that the Bus-bar vested in Gujarat
Energy Transmission Corporation ('the
GETCO' hereinafter), by virtue of that
electricity flowed from one end of the
Busbar to another. This issue of wheeling
of power from Bhander Power Limited to
Essar Steel India Limited was required to
be resolved by the Essar Steel India
Limited and for this purpose wanted to
shift the Ichhapor-Sachin Electricity Line.
The Essar Steel wanted to arrive at an
amicable solution to ensure that the power
from D.G.V.C.L. is supplied to only its
consumer Essar Steel and not group
companies of Essar Steel and necessary
arrangement for the group companies would
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
be made where electricity was to be
received only from the internal power
plants.
1.5 A meeting was held on 01.02.2010
between Managing Director of Gujarat Urja
Vikas Nigam Limited ('the GUVNL'
hereinafter), Managing Director, GETCO,
Chief Electrical Inspector and
representatives of Essar Steel and Bhander
Power Limited. Accordingly, the actions
were undertaken by the respondents.
1.6 The appellant and the GETCO
conducted an inspection in the month of
June-July 2011 and found that the
electricity supplied by the appellant was
solely to be used by the respondent No.1,
power was being taken to the other units
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
and also non-consumer units of the
appellant.
1.7 The notice was issued to the
respondent No.1 on 26.07.2011 stating that
the action was clearly in breach of
agreement dated 01.02.2010 and rejected all
representations of the respondent No.1. The
appellant raised a bill of
Rs.2311,02,43,968/- for the period between
15.06.2011 to 30.07.2011.
1.8 The Government of Gujarat directed
the appellant to take appropriate steps
against the respondent No.1 by applying the
provisions under Section 126(6) of the
Electricity Act, pursuant to which the
appellant raised supplementary bills
amounting to Rs.192,58,53,664/-. An appeal
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
was preferred under Section 127 of the
Electricity Act before the appellate
authority challenging the action of the
appellant raising supplementary bills of
Rs.192,58,53,664/-. The respondent No.1
deposited 50% of the amount of
supplementary bill and the remaining 50%
was to be paid in installments.
1.9 Vide order dated 01.11.2013, the
appellant authority adjudicated that only
25.23 MU of electricity could have been
said to be supplied by the appellant.
1.10 Against this finding of the
appellate authority, Special Civil
Application No.2859 of 2014 was preferred
by the appellant and Special Civil
Application No.5494 of 2014 was preferred
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
by respondent No.1. By an order dated
22.01.2015, this Court allowed Special
Civil Application No.5494 of 2014 filed at
the behest of the respondent No.1 and
remanded the matter back to the appellate
authority.
1.11 The appellant challenged the said
order in Special Civil Application No.2859
of 2014 and Special Civil Application
No.5494 of 2014 by way of Letters Patent
Appeal Nos.465 and 466 of 2015 on the
ground that the appeal filed by the
respondent No.1 before the appellate
authority is not maintainable and
therefore, the order of the appellate
authority dated 01.11.2013 to be quashed
and set aside.
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
1.12 The Letters Patent Appeal was
allowed on 17.07.2015 where the Court held
that the appeal filed by the respondent
No.1 under Section 127 of the Electricity
Act is not maintainable.
1.13 Aggrieved by the said order of
17.07.2015 passed in Letters Patent Appeal,
the respondent No.1 approached the Apex
Court by way of Special Leave Petition
(Civil) Nos.27920 and 27921 of 2015. They
were admitted and pending as on date and no
interim relief is granted by the Apex
Court.
1.14 After seeking the legal opinion,
the appellant preferred a Special Civil
Suit No.373 of 2016 against the present
respondent for recovery of outstanding dues
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
of Rs.2311,02,43,968/- for breach of
agreement dated 01.02.2010 for an
unauthorized use of electricity during the
period between 15.06.2011 to 30.07.2011.
1.15 The respondent filed an application
under Order VII Rule XI of the Code of
Civil Procedure, which came to be rejected
by the Civil Court.
1.16 During the pendency of the said
Civil Suit, the Corporate Insolvency
Resolution Process was initiated against
the respondent No.1. The Arcelor Mittal
Nippon Steel India Limited submitted its
resolution plan, which came to be approved
by the Committee of Creditors of respondent
No.1 and it is stated that the Arcelor
Mittal acquired the respondent No.1 in
accordance with the resolution plan on
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
16.12.2019.
1.17 An application came to be filed by
the Arcelor Mittal in Special Civil Suit
No.373 of 2016 (Commercial Civil Suit No.4
of 2020) praying for direction to
straightway dispose of or dismiss the Civil
Suit proceedings.
1.18 The appellant filed its reply to
the said application praying for the
direction. The Court vide its order dated
28.09.2021 dismissed the Special Civil Suit
No.373 of 2016 by way of a summary judgment
without conducting any trial or leading
evidence and without going much into the
details of the facts.
1.19 Aggrieved by the same, the
appellant is before this Court seeking to
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
prefer this First Appeal and seriously and
fervently challenging the passing of the
judgment and order by the Court.
1.21 It is the grievance of the
appellant that the Special Leave Petitions
(Civil)No.27920 and 27921 of 2015 are
pending before the Apex Court as have been
preferred by the respondent No.1
challenging the judgment and order dated
17.07.2015 passed by this Court in Letters
Patent Appeal Nos.465 and 466 of 2015 and
the same are pending adjudication. There is
no interim relief granted in favour of the
respondent No.1 and therefore, the order
passed by this Court is prevalent.
1.22 The order is not passed under Order
VII Rule XI of the Code of Civil Procedure
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
and it is not backed by any legal
provision. There is no evidence led under
the Code of Civil Procedure and the present
Civil Suit could not have been terminated
summarily. It is urged that the trial Court
materially erred in law and facts in
delivering the judgment. The trial Court
failed to appreciate that there was a
contract between the two parties and
minutes of meetings had been drawn on
01.02.2010 and the suit came to be filed
for breach of terms of the said contract.
The learned Judge also failed to appreciate
the cause of action having been started in
view of the decision in Letters Patent
Appeal Nos.465 and 466 of 2015 on
17.07.2015 upholding that the appellant was
entitled to recover the total amount of
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
Rs.2300 Crore (rounded off) and therefore,
the suit to recover the total amount of
Rs.36,83,83,09,109/- came to be filed. It
sought to rely on the decision of the Apex
Court rendered in case of Committee of
Creditors of Essar Steel India Limited vs.
Satish Kumar Gupta, reported in 2019 SCC
Online 1478 and held that there was no
maintainability of the suit in wake of this
decision. The Court never appreciated that
the Resolution Professional had admitted
the claim of the appellant at notional
value of Rs.1/- and on that ground alone
this could not have been denied.
1.23 According to the appellant, at para
67 and para 102 certain findings and
observations of the Apex Court could not
have been overlooked as the Apex Court was
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
also aware about the fact that there were
disputes pending and had not said that the
Civil Suit or litigations pending before
any authority would automatically abate,
but it had observed that the disputes are
pending and pending disputes the claim at
notional value of Rs.1/- decided is
correct. Accordingly, the present appeal
with the following prayers:
"7...
(A) YOUR LORDSHIPS be pleased to admit and allow the
present appeal;
(B) YOUR LORDSHIPS be pleased to quash and set aside
the judgment and order dated 28.09.2021 passed by the
Learned 2nd Additional Senior Civil Judge has dismissed
Commercial Civil Suit No.4/2020 (Old Special Civil Suit
No.373/2016 filed by the appellant (Original plaintiff) and
further be pleased to order to restore the said suit to original
file in the interest of justice;
(C) YOUR LORDSHIPS may kindly be pleased to grant any
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
other appropriate relief in the interest of justice."
2. This Court had admitted the appeal on
08.12.2021 (Coram:Justice N.V.Anjaria and
Justice Sandeep N. Bhatt) and thereafter
learned senior advocate, Mr.Anshin Desai
assisted by the learned advocate, Ms.Lilu
K. Bhaya and Mr.Shrineel Shah, learned
senior advocates, Mr.Navin Pahwa, Mr.Ritin
Rai assisted by Ms.Ruby Singh Ahuja,
Mr.Keyur Gandhi Mr.Vishal Gehrana,
Mr.Nisarg Desai, Ms.Pravalikha, Ms.Ritika
Sinha, Mr.Amit Bhandari and Mr.A.M.Singhvi
were heard at length extensively on both
the sides. Not only they made the oral
submissions in extenso, but also given the
written notes substantiating their
versions. It will not be required therefore
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
to elaborate those arguments. In sum and
substance, it can be said that the
appellant has fervently questioned and
challenged the action of terminating the
suit during the pendency of the Special
Leave Petitions before the Apex Court and
merely on the basis of the Apex Court's
decision in case of the very respondent. On
the part of the respondent, the very
decision of the Apex Court has been
strongly relied upon to urge that in wake
of this decision of Committee of Creditors
of Essar Steel India Limited (supra),
nothing remains to be done in this case as
the respondent-Arcelor Mittal has taken
over after a fierce conduct of insolvency
resolution process and there could be no
hydraheads after once the Arcelor Mittal's
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
resolution plan has been approved by the
Committee of Creditors, the National
Company Law Tribunal ('the NCLT
hereinfter), National Company Law Appellate
Tribunal ('the NCLAT' hereinafter) as well
as the Apex Court.
3. Having thus heard the learned advocates
on both the sides, if at the beginning the
summary judgment dated 28.09.2021 which is
impugned in the present proceedings is
looked at, the learned 2nd Additional
Senior Civil Judge, Surat dismissed the
Commercial Civil Suit No.4 of 2020 (Old
Special Civil Suit No.373/2016). While so
doing it, it had taken note of some of the
provisions of the Commercial Courts Act and
also regarded certain undisputed facts to
hold eventually the suit is infructuous in
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
light of the decision of the Apex Court and
the Review Application of the plaintiff was
also rejected by the Apex Court on
25.08.2020. There would be no need for
lengthy procedure for according evidence or
any other procedural aspect.
3.1 It also took note of the existence
of the order of Division Bench of the High
Court and non-giving of the stay by the
Apex Court, which according to the Court,
was not relevant as the issue of both the
petitions were different and present suit
was finally decided by the Apex Court.
4. We need to take the note of the
fact, at the outset, that the respondent-
Arcelor Mittal filed a separate application
for dismissal of the suit while Exhibit 34
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
on the ground that the claim of the
appellant is extinguished under the order
of the Apex Court on 15.11.2019 in the
matter of Committee of Creditors of Essar
Steel India Limited (supra).
4.1 This was objected to by the
appellant vide Exhibit 44 by urging that
the claim of the appellant was protected
and the application for review was
preferred by the appellant and it claim
would survive under Section 31 (1) of the
Insolvency and Bankruptcy Code, 2016 ('the
I.B.Code' hereinafter) along with the
Resolution Plan and judgment of the Apex
Court. The trial Court took note of the
copy of minutes of meeting dated 01.02.2010
filed by the appellant describing the
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
entire fact in the plaint, the procedure
which went on before the High Court and the
order passed by the Division Bench for
filing the affidavit and the resolution
passed by the respondent. The trial Court
also noted the playing of fraud and
obstruction in course of justice and the
breach of the undertaking and the affidavit
filed before the Court. It was argued that
not allowing the stay amounted to the Apex
Court having considered, the necessity for
the appellant to continue. The Apex Court
having allowed the notional Rs.1/- for the
appellant's due also was pressed into
service for allowing the suit to be
continued. However, on the basis of the
provisions of the Commercial Courts Act,
the Apex Court took note of certain
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
undisputed facts to hold that the suit of
the plaintiff deserves to be dismissed for
having become infructuous.
5. We notice that the trial Court had
dismissed the suit by a summary judgment,
where the entire thrust is the judgment and
the decision of the Apex Court rendered in
Essar Steel Limited vs State Of Gujarat,
reported in 2020 (8) SCC 531. It is utmost
necessary to refer to the undisputed fact
that there is no adjudication on merit. The
record and proceedings preferred by the
Arcelor Mittal at Exhibit 51 was never
decided, where the prayer was made for
substitution of the names. This
application, as rightly pointed by the
appellant, is akin to the provision of
Order I Rule X of the Code of Civil
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
Procedure. The application, which had been
moved does not mention any provision or
order of Civil Procedure Code or of
Commercial Courts Act. It is also to be
noted, at this stage, that the amount had
been quantified and the appellant had
succeeded before the Division Bench when it
passed the judgment on 17.07.2015 in
Letters Patent Appeal Nos.465 and 466 of
2015. This Court had directed the
respondent company to file an undertaking
on affidavit with Board Resolution stating
that it would pay the full amount in the
event of failure. The respondents,
according to the appellant, are in
deliberate and intentional breach of the
said undertaking dated 29.04.2015.
6. It is also necessary to note that under
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
Order VII Rule XI of the Code of Civil
Procedure vide Exhibit 12, the application
came to be preferred on the ground of
limitation and bar of Section 145 of the
Electricity Act, which was rejected by the
Court on 18.05.2019.
7. The prayer was made by the respondent
for rejection of the plaint under the
provision of Order VII Rule XI of the Code
of Civil Procedure where the contention
raised by the respondent was that the suit
appeared from the statement in the plaint
to be barred by Section 145 of the
Electricity Act. Unauthorized dues of the
electricity were alleged by the appellant
in accordance with the provision of 126 of
the Electricity Act, 2003. It was alleged
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
that the suit was barred by the provision
of Section 145 of the Electricity Act, 2003
which had clearly put bar on the
jurisdiction of the Civil Court. The Court
examined this issue by examining the
provision of Section 145 of the Electricity
Act to hold that the law doesn't bar the
plaintiff to file a suit. But, the
defendant is prevented to file the suit
against the defendant for any act performed
by the plaintiff with reference to Sections
126 and 127 of the Electricity Act.
7.1 In other words, if the defendant
had an objection against the activity
conducted for assessment of unauthorized
use of electricity by the plaintiff, no
suit can be filed before the Civil Court
for appropriate relief and in that fashion
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
the jurisdiction of the Civil Court is
barred by Section 145 of the Electricity
Act. Relying on the decision of the Apex
Court in case of North Delhi Power Limited
vs. Devinder Singh decided in Civil Appeal
No.20842 of 2017 where the Court has held
that the Special Electricity Court acts as
a Court of Sessions which has been set up
to try offences that are committed under
the Act. By no stretch of imagination it
can be stated that a civil suit would be
within the jurisdiction of such Courts and
accordingly the Court held that the suit is
not barred by the provision of Section 145
of the Electricity Act. The objection
raised on the ground of limitation also is
examined to hold that Section 9 of the
Limitation Act prescribed period of 3 years
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
for preferring the suit. In case of the
appellant, it was held that within three
years from the date 26.09.2011 the suit was
to be filed, however, it is filed on
03.08.2016. The Court held that on the
ground that the respondent was required to
make the payment within the 30 days of the
order i.e. 17.07.2015, the limitation
period would start on 17.07.2015. The
appellant since had preferred the suit on
03.08.2016 excluding the period taken for
the bona fide prosecution before various
courts, it was held to be within the
limitation.
8. The Commercial Court had relied on the
provisions of Commercial Courts Act
particularly Order XIII A which sets out
the procedure by which the Court may decide
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
a claim pertaining to any commercial
dispute without recording oral evidence
under the heading of summary judgment. The
procedure prescribed under Rule IV is that
an application for summary judgment to a
court would need to include in addition to
any other matter (i) an application to
contain the statement that it is an
application for summary judgment made under
this order, (ii) it must disclose all
material facts and identify the point of
law, (iii) in the event the applicant seeks
to rely upon any documentary evidences, the
applicant must include these documents. It
should identify the relevant content of the
documentary evidence and the application
must state the reason why there are no real
prospects of succeeding on a claim or
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
defending the claim (iv) the relief, the
applicant is seeking and brief grounds for
the same also are needed, (v) where a
hearing for summary judgment is fixed the
respondent to be given at least 30 days'
notice, where the respondent may within 30
days of the receipt of notice of hearing of
application of summary judgment file a
reply.
9. Rule V provide that notwithstanding
anything in this order if the respondent in
an application for summary judgment wishes
to rely on the additional documentary
evidences, the respondent must file such
documentary evidence. Where it appears to
the Court that it is possible that a claim
or defence may succeed or it is improbable
that it shall do so it may make a
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
conditional order.
10. The Commercial Court noted that in a
suit, the respondent No.1 filed the written
statement and thereafter filed an
application for rejection of the suit on
the ground of non-existence of the cause of
action and the same had been construed as
an application for summary judgment. The
Court was required to decide the main issue
that "whether after passing of the decision of the Hon'ble
Supreme Court on 15.11.2019 in the matter of Committee of
Creditors of Essar Steel India Limited vs. Satish Kumar Gupta
(supra) any cause of action survived for plaintiff?" If the
issue is to be decided in affirmative then
Court would proceed for further trial and
if it is to be decided in negative then the
suit proceedings will attain the finality.
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
Thus, relying on the principle of Order
XIII A the Court was of the opinion that it
needs to decide the application under
procedure Order XIII A as an application
for summary judgment.
11. On considering various undisputed facts
and the decision of the Apex Court in case
of Committee of Creditors of Essar Steel
India Limited vs. Satish Kumar Gupta
(supra), the Court held that the judgment
of the Apex Court is clear on the pending
dispute before various authorities and non-
maintainability of it after the successful
approval of the resolution and confirmed by
the appellate authority. Hence, the suit is
said to be clearly infructuous. The Court
held that the plaint was approved at the
time of its filing and there was no
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
infirmity of any law nor was it barred by
the law and there existed the cause of
action. However, after passing of the
judgment of the Apex Court, the situation
became different and the suit would need to
be dismissed under Order VII Rule XI or
under Section 151 of the Code of Civil
Procedure as the separate provision in
mechanism is available in the Commercial
Courts Act in the form of summary judgment
and the Court can pass the order under that
provision.
12. Serious grievance is raised by the
appellant saying that the application was
for direction only. The defendant's
application was filed beyond the period of
120 days in the Commercial Court. It was a
special suit in the year 2016, which was
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
later on changed to commercial suit. It was
decided on an application which is not
under the Code of Civil Procedure and it
could not have been decided as summary
judgment. The dispute was raised in Special
Civil Suit in 2016. The base of the dispute
is Rs.2311,02,43,968/-.
13. Vital it would be to make a mention
that there is no separate application moved
for summary judgment as required under the
statute. The Commercial Court itself while
passing the order had referred to the
provisions of the Commercial Courts Act
particularly Order XIII A even if the
ground for the summary judgment that the
plaintiff has no real prospect of
succeeding on the claim or the defendant
has no real prospect of successfully
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
defending the claim did not exist. The
procedure which is prescribed requires an
application for summary judgment to the
Court over and above that the applicant if
deems relevant can include various aspects,
nothing of the sort is found. The Court had
also been oblivious of the fact that
earlier application was moved by the
respondent and the same had been decided
below Exhibit 12 where the rejection of the
suit under Order VII Rule XI of the Code of
Civil Procedure was being considered.
14. What is important to note is that the
trial Court had granted Rs.368 Crore
(rounded off) with 15% interest.
15. It is vital for the consideration of
this Court (i) whether the claims agitated
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
in the appellant's suit survive after
approval of the Resolution Plan for the
answering respondent and the judgment of
the Apex Court dated 15.11.2019 where the
Hon'ble Supreme Court of India in Committee
of Creditors of Essar Steel India Limited
vs. Satish Kumar Gupta and others (supra)
and (ii) whether despite finding that the
appellant's claim do not survive in light
of the decision of the Apex Court in case
of Committee of Creditors of ESIL vs.Satish
Kumar Gupta and others (supra) the
Commercial Court erred in dismissing the
appellant's suit relying on Order XIII A of
the Code of Civil Procedure and the matter
ought to be remanded to the learned
Commercial Court.
16. The appellant's claim disputed or
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
undisputed, crystallized or uncrystallized
is a claim within the meaning of Section 3
(6) of the Commercial Courts Act, which was
required to be dealt with in accordance
with the provision of the Court. The
appellant filed its claim along with
certain documents before the Resolution
Professional on 11.08.2017. The appellant
gave the details of the disputes pending
between the parties (page 276 A Appellant's
Convenience Compilation Volume 1). The
appellant's suit also refers to these
documents as the basis of the cause of
action for filing the same.
17. The Resolution Professional verified
the claim of the appellant and the
Resolution Professional informed the
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
appellant that its claim had been admitted
only to the extent of INR 1 as the claim
was disputed. The appellant had already
gone to the NCLT as well as NCLAT and the
Apex Court in Essar Steel judgment. Thus,
all the claims and disputes raised by the
creditors of the Essar Steel were already
considered by the Resolution Plan.
According to the appellant, the effect of
the Resolution Plan is not that against the
erstwhile Essar Steel would stand
extinguished in terms of the Resolution
Plan. Whereas according to the respondent,
the effect would be of extinguishment of
all claims whether they form the part of
Corporate Insolvency Resolution Process
('the CIRP' hereinafter) or not.
18. The decisions sought to be relied upon
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
are of Ghanshyam Mishra vs. Edelweiss
Asset Reconstruction Company, reported in
(2021) 9 SCC 657 and the decision of Essar
Steel Limited vs. State of Gujarat.
18.1 In case of Ghanshyam Mishra
(supra), the Apex Court has held thus:
"2.1 (i) As to whether any creditor including the Central
Government, State Government or any local authority is
bound by the Resolution Plan once it is approved by an
adjudicating authority under sub−section (1) of Section 31 of
the Insolvency and Bankruptcy Code, 2016 (hereinafter
referred to as 'I&B Code')?
2.2 (ii) As to whether the amendment to Section 31 by
Section 7 of Act 26 of 2019 is clarificatory/declaratory or
substantive in nature?
2.3 (iii) As to whether after approval of resolution plan by
the Adjudicating Authority a creditor including the Central
Government, State Government or any local authority is
entitled to initiate any proceedings for recovery of any of the
dues from the Corporate Debtor, which are not a part of the
Resolution Plan approved by the adjudicating authority?
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
***
64. It could thus be seen, that the legislature has given
paramount importance to the commercial wisdom of CoC and
the scope of judicial review by Adjudicating Authority is
limited to the extent provided under Section 31 of I&B Code
and of the Appellate Authority is limited to the extent
provided under sub−section (3) of Section 61 of the I&B
Code, is no more res integra.
***
67. Perusal of Section 29 of the I&B Code read with
Regulation 36 of the Regulations would reveal, that it
requires RP to prepare an information memorandum
containing various details of the Corporate Debtor so that the
resolution applicant submitting a plan is aware of the assets
and liabilities of the Corporate Debtor, including the details
about the creditors and the amounts claimed by them. It is
also required to contain the details of guarantees that have
been given in relation to the debts of the corporate debtor by
other persons. The details with regard to all material
litigation and an ongoing investigation or proceeding initiated
by Government and statutory authorities are also required to
be contained in the information memorandum. So also the
details regarding the number of workers and employees and
liabilities of the Corporate Debtor towards them are required
to be contained in the information memorandum.
68. All these details are required to be contained in the
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
information memorandum so that the resolution applicant is
aware, as to what are the liabilities, that he may have to
face and provide for a plan, which apart from satisfying a
part of such liabilities would also ensure, that the Corporate
Debtor is revived and made a running establishment. The
legislative intent of making the resolution plan binding on all
the stake−holders after it gets the seal of approval from the
Adjudicating Authority upon its satisfaction, that the
resolution plan approved by CoC meets the requirement as
referred to in sub−section (2) of Section 30 is, that after the
approval of the resolution plan, no surprise claims should be
flung on the successful resolution applicant. The dominant
purpose is, that he should start with fresh slate on the basis
of the resolution plan approved.
69.This aspect has been aptly explained by this Court in the
case of Committee of Creditors of Essar Steel India Limited
through Authorised Signatory (supra).
"107. For the same reason, the impugned NCLAT
judgment [Standard Chartered Bank v. Satish Kumar
Gupta, 2019 SCC OnLine NCLAT 388] in holding that
claims that may exist apart from those decided on
merits by the resolution professional and by the
Adjudicating Authority/Appellate Tribunal can now be
decided by an appropriate forum in terms of Section
60(6) of the Code, also militates against the rationale of
Section 31 of the Code. A successful resolution
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
applicant cannot suddenly be faced with "undecided"
claims after the resolution plan submitted by him has
been accepted as this would amount to a hydra head
pop− ping up which would throw into uncertainty
amounts payable by a prospective resolution applicant
who would successfully take over the business of the
corporate debtor. All claims must be submitted to and
decided by the resolution professional so that a
prospective resolution applicant knows exactly what has
to be paid in order that it may then take over and run
the business of the corporate debtor. This the successful
resolution applicant does on a fresh slate, as has been
pointed out by us hereinabove. For these rea− sons,
NCLAT judgment must also be set aside on this count."
70.In view of this legal position, we could have very well
stopped here and held, that, the observation made by NCLAT
in the appeal filed by EARC to the effect, that EARC was
entitled to take recourse to such remedies as are available to
it in law, is impermissible in law.
71. As held by this Court in the case of Pr. Commissioner
of Income Tax vs. Monnet Ispat and Energy Ltd.10, in view
of provisions of Section 238 of I&B Code, the provisions
thereof will have an overriding effect, if there is any
inconsistency with any of the provisions of the law for the
time being in force or any instrument having 10 SLP(C)
No.6483/2018 (order dated 10.8.2018) effect by virtue of any
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
such law. As such, the observations made by NCLAT to the
aforesaid effect, if permitted to remain, would frustrate the
very purpose for which the I&B Code is enacted.
72.However, in Civil Appeal arising out of Special Leave
Petition (Civil) No.11232 of 2020, Writ Petition (Civil)
No.1177 of 2020 and Civil Appeals arising out of Special
Leave Petition (Civil) Nos. 7147−7150 of 2020, the issue with
regard to the statutory claims of the State Government and
the Central Government in respect of the period prior to the
approval of resolution plan by NCLT, will have to be
considered.
18.2 This Court in case of Essar Steel
Limited vs. State of Gujarat has held thus:
"11.1 Undisputedly the applicant herein i.e. ArcelorMittal
Nippon Steel India Ltd., formerly known as Essar Steel India
Ltd., (ESIL) submitted a Resolution Plan which came to be
approved by the CoC on 25.10.2018 and, thereafter, by the
Hon'ble Supreme Court on 15.11.2019 in Committee of
Creditors of Essar Steel India Ltd., vs. Satish Kumar Gupta
and others, reported in 2019 SCC OnLine 1478. Upon
approval of the said Resolution Plan all the claims RP by the
creditors were settled or discharged by appropriate assignment
of value. The Resolution Plan provides that all the claims of
ESIL whether contingent or crystallized, known or unknown,
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
filed or not filed shall stand irrevocably and unconditionally
abated, discharged, settled and extinguished in perpetuity
upon approval of the Resolution Plan. In view of Section 31
of the Code, the Resolution Plan is binding to all
stakeholders, including the respondents herein. Section 31 of
the IBC, 2016 reads thus :-
"31. Approval of resolution plan .- (1) If the
Adjudicating Authority is satisfied that the resolution
plan as approved by the committee of creditors under
sub-section (4) of Section 30 meets the requirements as
referred to in sub-section (2) of Section 30, it shall by
order approve the resolution plan which shall be
binding on the corporate debtor and its employees,
members, creditors, including the Central Government,
any State Government or any local authority to whom a
debt in respect of the payment of dues arising under
any law for the time being in force, such as authorities
to whom statutory dues are owed, guarantors and other
stakeholders involved in the resolution plan.
Provided that the Adjudicating Authority shall, before
passing an order for approval of resolution plan under
this subsection, satisfy that the resolution plan has
provisions for its effective implementation."
11.2 Further the Resolution Plan came to be finally approved
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
by the Hon'ble Supreme Court in the aforesaid judgment,
wherein in view of the aforesaid judgment and Section 31 of
the Code all the past dues, claims and liabilities against ESIL
stands extinguished and hence no outstanding liability of
ESIL/ AMNS now remains. In view thereof, the liability raised
by the impugned notices which are subject matter of present
writ application stands extinguished so far as ESIL is
concerned. By way of judgment dated 15.11.2019 in
committee of creditors of ESIL vs. Satishkumar Gupta, the
Hon'ble Supreme Court dismissed the various appeals and
finally approved the Resolution Plan of ArcelorMittal Nippon
Steel India Ltd., in the judgment as reported in 2020 (8) SCC
531. The Hon'ble Supreme Court held in para-105 which
reads thus :-
"105. Section 31(1) of the Code makes it clear that
once a resolution plan is approved by the Committee of
Creditors it shall be binding on all stakeholders,
including guarantors. This is for the reason thatthis
provision ensures that the successful resolution applicant
starts running the business of the corporate debtor on a
fresh slate as it were. In SBI v. V. Ramakrishnan [SBI
v. V. Ramakrishnan,(2018)17 SCC 394 : (2019) 2 SCC
(Civ) 458], this Court relying upon Section 31 of the
Code has held: (SCC p. 411, para 25)
"25. Section 31 of the Act was also strongly relied upon
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
by the respondents. This section only states that once a
resolution plan, as approved by the Committee of
Creditors, takes effect, itshall be binding on the
corporate debtor as well as the guarantor. This is for
the reason that otherwise, under Section 133 of the
Contract Act, 1872, any change made to the debt owed
by the corporate debtor, without the surety's consent,
would relieve the guarantor from payment. Section
31(1), in fact, makes it clear that the guarantor cannot
escape payment as the resolution plan, which has been
approved, may well include provisions as to payments
to be made by such guarantor. This is perhaps the
reason that Annexure VI(e) to Form 6 contained in the
Rules and Regulation 36(2) referred to above, require
information as to personal guarantees that have been
given in relation to the debts of the corporate debtor.
Far from supporting the stand of the respondents, it is
clear that in point of fact, Section 31 is one more
factor in favour of a personal guarantor having to pay
for debts due without any moratorium applying to save
him."
107. For the same reason, the impugned NCLAT
judgment in holding that claims that may exist apart
from those decided on merits by the resolution
professional and by the Adjudicating Authority/
Appellate Tribunal can now be decided by an
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
appropriate forum in terms of Section 60(6) of the
Code, also militates against the rationale of Section 31
of the Code. A successful resolution applicant cannot
suddenly be faced with "undecided" claims after the
resolution plan submitted by him has been accepted as
this would amount to a hydra head popping up which
would throw into uncertainty amounts payable by a
prospective resolution applicant who would successfully
take over the business of the corporate debtor. All
claims must be submitted to and decided by the
resolution professional so that a prospective resolution
applicant knows exactly what has to be paid in order
that it may then take over and run the business of the
corporate debtor. This the successful resolution
applicant does on a fresh slate, as has been pointed out
by us hereinabove. For these reasons, NCLAT judgment
must also be set aside on this count."
11.3 Further the Resolution Plan provides that all the
claims alongwith related proceedings shall stand
irrevocably and unconditionally stand abated,
discharged, settled and extinguished in perpetuative
upon approval of the Resolution Plan. Further no
person shall be entitled to initiate any proceeding to
enforce any claims or continue any proceeding in
relation to any claim so far as such claim relate to
period prior to plan approval date. The relevant
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
provisions of the Resolution Plan as approved by the
Hon'ble Supreme Court are reproduced herein which
reproduced herein which reads thus :-
Proceedings in relation to the Water Charges Claim
stand abated:
The Resolution Plan provides that all the claims along
with the related proceedings shall stand irrevocably and
unconditionally abated, discharged, settled and
extinguished in perpetuity upon approval of the
Resolution Plan. Further, no person shall be entitled to
initiate any proceedings to enforce any claims or
continue any proceedings in relation to any claims in so
far as such claims relate to the period prior to the Plan
Approval Date. Certain relevant provisions of the
Resolution Plan, as approved vide the SC Judgment, are
extracted hereunder for ready reference:
"Operational Creditors: Trade Creditors and Government
Creditors - Pursuant to the approval of the Resolution
Plan by the Adjudicating Authority, each, of the Trade
Creditors and Government Creditors shall be deemed to
be bound by the following terms :-
The payments proposed to be made to the Trade
Creditors and Government Creditors in accordance with
this Resolution Plan, shall be treated as full and final
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
payment of all outstanding dues of the Corporate
Debtor to each of such Trade Creditors and Government
Creditors. Except as stated above, the Government
Creditors and Trade Creditors shall be deemed to have
no outstanding claims against the Corporate Debtor; and
As on the Plan Approval Date, the Government
Creditors and Trade Creditors shall be deemed to have
waived, until the Plan Approval Date, all termination
rights on account of payment defaults and rights to
payment of penalty, default payment or any payment of
like nature under any agreement or arrangement against
the Corporate Debtor."
"XIII. Other Terms of the Resolution Plan xxx xxx xxx
Extinguishment of Claims:
1. Notwithstanding anything contained under
ApplicableLaw or otherwise, the Claims pertaining to
the Corporate Debtor shall stand extinguished, settled,
abated and satisfied in the manner set out hereinafter:
a. Upon approval of the Resolution Plan by the
Adjudicating Authority, except for payments/settlements
under this Resolution Plan, no other payments or
settlements (of any kind) will have to be made to any
other Person in respect of the Claims filed under the
Resolution Process and all Claims (including, for the
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
avoidance of doubt, Rejected Claims Amount and
Verification Pending Amounts) against the Corporate
Debtor till or as of the Insolvency Commencement Date
along with any related Proceedings, including
Proceedings for enforcement of any security interest, to
the extent approved by the Adjudicating Authority,
(other than in respect of invocation of corporate
guarantees and personal guarantees issued for and on
behalf of the Corporate Debtor by the Existing Promoter
Group or their respective affiliates), shall stand
irrevocably and unconditionally abated, discharged,
settled and extinguished in perpetuity and if required,
the Resolution Applicant, Corporate Debtor and its
Stakeholders shall make necessary filings and take all
necessary steps for the same.
b. Upon approval of the Resolution Plan by the
Adjudicating Authority, the payments contemplated in
this Resolution Plan shall be the Corporate Debtor's full
and final performance, and satisfaction, of all Claims
(including Rejected Claims Amounts and Verification
Pending Amounts) against the Corporate Debtor till or
as of the Insolvency Commencement Date, shall stand
irrevocably and unconditionally settled and extinguished
in perpetuity.
Xxx xxx xxx
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
e. Other than as set out in this Resolution Plan, the
Resolution Applicant and the Corporate Debtor shall
have no responsibility or liability in respect of any
Claims (whether contingent or crystallized, known or
unknown, filed or not filed) against the Corporate
Debtor attributable to the period prior to the Insolvency
Commencement Date, including those relating to any
corporate guarantees, indemnities and all other forms of
credit support provided by the Corporate Debtor till or
as of the Insolvency Commencement Date shall stand
irrevocably and unconditionally abated, settled and
extinguished in perpetuity.
xx xxx xxx
1. No Person shall be entitled to initiate any
Proceedings to enforce any Claims or continue any
proceedings in relation to any Claims in so far as the
Claims relate to the period prior to the Plan Approval
Date.
xxx xx xxx
2. With respect to the matters stated in paragraph
1above, any liabilities and/ or Claims that arise till the
Effective Date shall stand waived, extinguished, abated,
discharged in perpetuity and provisions of paragraph 1
above shall mutatis mutandis apply."
11.4 The above referred portion of the aforesaid
judgment make it exceedingly clear that upon approval
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
of the Resolution Plan all claims including any existing
claim such as claim made with respect to water charges
which form the subject matter of present Special Civil
Application stand extinguished. The Resolution Plan
operates "in rem" and it disentitles anyone from
agitating any claims that existed prior to Resolution
period.
11.5 Pursuant to the approval of the terms of the
resolution plan an amount of Rs.10,65,02,083 was paid
by ESIL to the writ-applicant by way of demand draft
which was submitted by letter dated 6.12.2019 and the
same was accepted by the respondent No.2 on
17.12.2019 without any demurer or protest. The said
letter dated 6.12.2019 is produced thus;-
"December 16, 2019
To: Executive Engineer, Kakarapar Right Bank Canal
Division,
2nd Floor, City Mamlatdar Office,
Athwalines , Surat.
Dear Sir/Madam:
Subject: Payment under the resolution plan for Essar
Steel India Limited
The Hon'ble Supreme Court of India, through its
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
judgment dated November 15, 2019 ("Supreme Court
Order"), has approved the resolution plan submitted by
ArcelorMittal India Private Limited (AMPIL") in respect
of the corporate insolvency resolution process of ESIL,
after considering the order of the Hon'ble National
Company Law Tribunal,Ahmedabad bench dated March
8, 2019 and the order of the Hon'ble National Company
Law Appellate Tribunal dated July 4, 2019 (the
resolution plan, as modified, amended and approved by
the Supreme Court Order, the "Resolution Plan").
In accordance with the terms of the Resolution Plan,
below are the details of the payment to you as an
operational creditor of ESIL:
1 Name of the EXECUTIVE ENGINEERS, KRBC
Operation SURAT, GOVERNMENT OF
Creditor GUJARAT.
2 Amount of Rs.1,06,502,083/- In words :
distribution Rs Ten Crores Sixty Five lacs
under the two thousand and eighty three
Resolution Plan only.
3 Details of DD No.: 626895 DD Date :
Demand Draft December 16,2019 DD Issuing
(DD) issued for Bank : State Bank of India
the eligible Issued in favour of : Executive
amount under Engineer KRBC Division
the Resolution Payable at : Surat
Plan
The Demand Draft mentioned above is enclosed with
this letter.
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
In accordance with the terms of the Resolution Plan
and the Supreme Court Order, please note that the
payment of the above amount shall be treated as full
and final payment of all outstanding claims/dues
(including any undecided claims) of ESIL to you, and
all such claims shall be fully extinguished. Neither ESIL
nor AMIPL shall be liable to pay any additional
amounts to you. Note that any outstanding advances
made by ESIL to you, if any, should not be offset
against any past unpaid claims or dues, and such
outstanding advances should be adjusted only against
future supply of goods and services, as applicable.
This letter is for your information. Handed over to Mr.
Mayank Kumar Desai - DL No. GJ05-19940099755
For and on behalf of Essar Steel India Limited
Name: M. Balajee Designation: DD Received
Vice President Finance
17.12.2019
For, Executive
Engineer K. R. B. C. Division
Surat"
11.6 In view of above, in view of this Court the present
special civil application arose prior to the
commencement of CIRP and the same stands
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
extinguished by virtue of the judgment delivered by the
Hon'ble Supreme Court in 2020 (8) SCC 531. The
proceedings under the Insolvency and Bankruptcy Code
2016 has acquired finality with the aforesaid judgment
passed by the Hon'ble Supreme Court in 2020 (8) SCC
531 which clearly shows discussion in detail of the
entire scheme of the provisions of the Code and vide
the aforesaid quoted paragraphs it clearly shows that
"undecided claim" of the operational creditors i.e.
stand extinguished by the said scheme of rehabilitation/
revival approved by the committee of the creditors
which came to be approved by the Hon'ble Supreme
Court.
12. Thus, in view of this Court the civil application in
the Special Civil Application No.8741 of 2008
ArcelorMittal Nippon Steel India Ltd., formerly known
as Essar Steel India Ltd., (ESIL) deserves to be allowed
and the Special Civil Application No.8741 of 2008 filed
by the Essar Steel India Ltd., (ESIL) against the
respondent No.2 stands allowed to the aforesaid
extent."
19. The appellant had relied on Note 21 at
page 308 of the Appellant's Convenience
Compilation, Volume-I that the claim of the
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
certain creditors according to Note 21 was
admitted at Rs.1/-. The value of Rs.1/- was
assigned to the appellant's claim whereas
according to the respondent, the
appellant's claim would be extinguished
once there is an approval of the Resolution
Plan. It cannot argue that its claims are
not extinguished in terms of the Resolution
Plan. If Note 21 as argued before us by the
respondent had the effect of survival of
appellant's claim and inclusion of the same
in the Resolution Plan, there would not
have been any requirement for the appellant
to file IA No.446 of 2018 by which it
prayed that Resolution Plan may not be
approved before because payment of DGVCL's
claim had not been provided for in the
plan. IA No.446 of 2018 was filed in
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
November 2018 whereas Note 21 is a part of
document file with the NCLT in June 2018.
Therefore, according to the respondent, the
appellant had been barred by the principle
of res judicata to re-agitate these claims
under the appellant's suit and even the
cause of action does not survive any
longer. It is also emphatically pointed out
by the respondent that neither Note 21 is a
part of a Resolution Plan nor the
information memorandum. It is a part of
list of creditors prepared by the
Resolution Professional and forwarded to
the NCLT. In CIRP, which is a Resolution
Plan which decides how much payment is to
be made to each creditor toward full and
final satisfaction of its entirely, its
entire claim admitted by the Resolution
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
Professional.
19.1 Although, the appellant has
emphasized on the fact that Resolution
Professional was wrongly admitted the
appellant's huge claims to INR 1/- only on
the ground that the same is disputed. It
has urged that it should be allowed to
pursue such claims even after completion of
Essar Steel CIRP. Such submissions at first
glance will seem to be grossly misleading
and also against the settled law laid down
by the Apex Court as contended by the
respondent. It is not in dispute that the
decision of the Resolution Professional to
admit the claim of the appellant only to
the extent of Rs.1/- was upheld by the
Essar Steel's judgment. The appellant's
submission that despite the claim of the
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
appellant having been admitted in the
Resolution Plan to the extent of INR 1/-,
the respondent can be asked to pay a claim
beyond the terms of the Resolution Plan. In
the opinion of this Court, it would not be
contrary to the decision of the Apex Court
and to the objective of the Court.
20. It is true that under the Resolution
Plan, the appellant has not been found
entitled to receive any sum towards its
claim except INR 1/-. The Resolution
Professional had put the notional value to
the claim of the petitioner at INR 1/- and
of course, the Resolution Professional's
decision has been upheld by Apex Court in
Essar Steel's judgment as also in the
review order.
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
21. This Court is not in agreement with the
submissions of the respondent that the
Resolution Plan for erstwhile Essar Steel
since had been approved, the appellant's
claim would be extinguished in terms of
such plan. This Court is conscious of the
decisions of the Apex Court in case of
Ghanshyam Mishra (supra), this decision
provides that on approval of the Resolution
Plans all claims stand frozen. The
appellant's claim at Rs.1/- even if is
frozen, the rest of its claim of Rupees
Five Thousand and odd Crores may not stand
extinguished.
22. This Court needs to refer to the
appellant's claim and statutory dues.
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
Claim of statutory dues by the appellant.
22.1 The appellant has contended its
claim to be statutory dues and therefore,
not to be extinguished by the Resolution
Plan. As discussed above, the Resolution
Plan in the present case did not provide
for any payment towards the appellant's
statutory claim. The appellant, therefore,
has sought a permission to continue its
suit and to bolster these submissions the
appellant had relied on the decision of the
Apex Court in case of State Tax Officer
(1) vs. Rainbow Papers Limited, reported in
(2022) ibclaw.in 107 SC Civil Appeal
No.1661 of 2020 With Civil Appeal No.2568
of 2020 the judgment dated 06.09.2022.
23.1. The Court was considering whether
the State can pursuant to Section 48 of the
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
Gujarat Value Added Tax Act claim first
charge over the assets of corporate debtor
and whether in view of such a first charge,
a plan which waived of such dues can be
approved by the Committee of Creditors. and
whether claim filed before the Resolution
Professional after considerable delay can
be entertained. The Apex Court held that
the State Government was a secured creditor
as per Section 48 of the Value Added Tax
Act and there was no inconsistency between
Gujarat Value Added Tax Act and the Court.
It also held that the Resolution Plan which
does not provide for payment of statutory
dues ought to be rejected and the company
ought to be liquidated. The Government's
claim could not have been rejected on the
sole ground that there was a delay in
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
filing it. Accordingly, the Resolution Plan
approved by the Committee of Creditors was
set aside.
23.2 Of course, the facts of the
appellant differ this wise that the
appellant's claim was not rejected by the
Resolution Professional on the ground that
it was filed belatedly, but on the ground
that the disputes were pending with respect
to the claim before various authorities.
Therefore, the amount of claim admitted was
the notional amount of INR 1/- to ensure
the participation in the CIRP.
24. Here, of course, there was a refusal to
approve the Resolution Plan, whereas in the
present case the Resolution Plan has
already been approved not just by the NCLT,
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
but by the Apex Court and yet the claim
being the statutory dues of the appellant
even when a Resolution Plan has been
approved, it is not a case of a hydra-heads
as held in case of Committee of Creditors
of Essar Steel India Limited vs. Satish
Kumar Gupta (supra).
25. We notice from Appellant's Convenience
Compilation that the total amount of claim
made under Regulation 7 of the Insolvency
and Bankruptcy Board of India was 5882.28
Crore as on 02.08.2017. The bifurcation of
the same also has been given this wise:
Nos. Particulars
4 Total Amount of Claim as on 02.08.2017 Rs.5882.28 crores
(including any interest as at the insolvency (Rupees Five Thousand
commencement date) Eight Hundred Eighty
Two Crores and Twenty
Eight Lacs Only)
1. Cross subsidy
Surcharge-Rs.1136.08
Crores
2. Additional Surcharge-
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
Rs.665.92 Crores.
3. Breach of Minutes of
Meeting dated
01.02.2010-Rs.4047.01
crores
4. Electricity Duty on
demand charges-
Rs.33.27 Crires
Note:Electricity Duty is a
levy by the Government
of Gujarat under the
Bombay Electricity Duty
Act as applicable in the
State of Gujarat. DGVCL
as a licensee haas the
obligation tocollect the
duty from the assesses.
The utilization and
appropriation of the
amount collected is as
per the decision of the
Government of Gujarat.
There was a cross subsidy surcharge,
additional surcharge,the detail of the
dispute also has been mentioned and there
is a reference that Essar Steel India
Limited challenged the amount under Section
127 of the Electricity Act wherein the
issue was decided under Section 126 of the
Electricity Act as unauthorized use of
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
electricity. This was challenged by DGVCL
before the High Court of Gujarat and the
Court vide its order dated 17.07.2015 held
that the case is not covered by Sections
126 and 127 of the Electricity Act,2003 and
therefore, the limitation of liability
under Section 126 of the Act would not
apply. Essar Steel India Limited had
challenged the same before the Hon'ble
Supreme Court being Special Leave Petition
Nos.27920 and 27921 of 2015. It also has a
reference of DGVCL having filed a Civil
Suit before Surat District Court being
Special Civil Suit No.373 of 2016 for
amount of Rs.3683.38 Crore (rounded off).
There is a reference of the payment of
Rs.192.59 Crore (rounded off) out of
Rs.2311.02 Crore (rounded off) by Essar
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
Steel India Limited. The balance due is
Rs.2118.44 Crore (rounded off) (Principal +
Interest).
26. The State on the affidavit the details
of the claims and some of the documents
which are sought to be relied upon have
been provided.
27. A communication dated 25.10.2017 from
I.P.Essar Steel provides that on
verification of the claim dated 11.08.2017
against the Essar Steel, the status of the
claim filed under Regulation 7 of the
Insolvency and Bankruptcy Board of India
(Insolvency Resolution Process of Four
Corporate Persons) Regulations, 2016
provides thus:
"This is to inform you upon verification ofyour claim Form-B
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
dated 11 August 2017 against Essar Steel India Limited, the
following is the status of your claim filed under regulation 7
of the Insolvency and Bankruptcy Board of India (Insolvency
Resolution Process of Corporate Persons) Regulations, 2016:
Amount of Claim INR 5882,28,00,000 Amount of Claim
submitted submitted
Amount of Claim Notional amount of Amount of Claim
admitted INR 1 (Indian Rupee admitted
One Only) to ensure
your participation in
the corporate
insolvency resolution
process
Reason for non- The remaining Reason for non-
admission of entire amount is not admission of entire
claim amount admitted because of claim amount
pending disputes with
respect to this claim
before various
authorities.
You may take your own independent advice in this matter
keepingin view the provisions of the Insolvency and
Bankruptcy Code, 2016 and rule/regulations made under the
said Code.
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
This is further to inform you that as per the provisions of the
Code, it is my duty to take controlof all the assets of the
Company including those subject to the determination of
ownership by a court or authority. Therefore, you are
directed, within seven days from receipt of this letter, to
return INR 313,23,33,244 paid by the Company pending
various disputes as such amounts are shown by the Company
as its asset. For this purpose, you can send an account payee
cheque or demand draft in name of the Company, viz., Essar
Steel India Limited.
You would appreciate that above refund of moneyis essential
for revival of the Company in accordance with the code
discharge of my duties under the Code."
27.1 It further has said that the
appellant may take its own independent
advise in this matter keeping in view of
the provision of IBC, 2016 and the Rules
and Regulations made under the Code. It
further informs that since it was his duty
to take control of all assets of the
company including those subjects to the
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
determination of the ownership by a Court
or Authority. The INR 313,23,33,244/- paid
by the Company pending various disputes of
such amount are shown by the company as its
assets and directed the demand draft in the
name of the company. This refund of money
was essential, according to this
communication, for revival of the company.
shows that its claims are subject to
disputes pending before various authorities
and have been admitted with a notional
amount of INR 1/-. The below mentioned are
the claimed amounts of these seven
creditors which have been classified as
amount admitted, amount rejected, amount
verification on going as these amounts are
subject to disputes pending before various
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
authorities.
"Note 21: Operational creditor claims are subject to disputes
pending before various authorities and have been admitted
with a notional amount of INR 1(Indian Rupee One Only).
Below mentioned are the claim amounts of these 7 creditors
which have not been classified as "Amount Admitted",
Amount Rejected" or Amount-Verification Ongoing" as these
amounts are subject to disputes pending before various
authorities.
Sr.NO Operating Creditor Amount (in INR)
1 A.H.Khadawala, State 5,449,844,724
Tax Officer, Surat
2 Commissioner of 42,230,647
Customs, Custom
House, Port Area,
Vishakhapatnam
3 Dakshin Gujarat Vij 58,822,7999,999
Company Limited
4 Gujarat Energy 8,271,812,868
Transmission
Corporation Limited
5 Indian Oil Corporation 37,625,874,503
Limited
6 Shree Karani Transport 1,719,407
7 TVS Logistics Services 4,667,858
Limited (Drive India
Enterprise Service Ltd.)
8 Total 110,218,950,006
28. This Court cannot be oblivious of the
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
fact that the legislative intent of making
Resolution Plan binding as held by the Apex
Court in case of Ghanshyam Mishra (supra)
on all the stakeholders after it gets a
seal of approval from the adjudicating
authority is that the Resolution Plan
approved by the Committee of Creditors meet
the requirement as referred to in sub-
section (2) of Section 30 and that after
the approval of Resolution Plan, no
surprise claim should be plunged on the
successful Resolution Applicant. Since the
dominant purpose is that he should start
with the fresh slate on the basis of the
Resolution Plan approved. In the Essar
Steel also the Court had said the
successful Resolution Applicant cannot
suddenly be faced with undecided claims
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
after Resolution Plan submitted by him has
been accepted as that would amount to a
hydra-heads popping up which would throw
into uncertainty amounts payable by a
prospective Resolution Applicant would
successfully take over the business of the
corporate debtors. All claims must be
submitted to and decided by the Resolution
Professional so that a prospective
Resolution Applicant knows exactly what has
to be paid in order that it may then take
over and run the business of the corporate
debtor.
29. Here is not a case that after the
Resolution Plan is approved, there is a
surprise claim flung on the successful
Resolution Applicant. The Apex Court has
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
held that the predominantly the object is
for the Resolution Applicant to start with
the fresh slate on the basis of the
Resolution Plan approved and not allow the
hydra-heads to pop-up, the claim which has
been made by the appellant is a part of the
claim made to the Resolution Professional
and the Note of the Operational Creditor
makes it abundantly clear that while
finalizing the Resolution Plan the
concerned authority was conscious that
operation creditor had made the claim
subject to the disputes pending before
various authorities and therefore, only
they had not classified the amount as
either amount admitted or amount rejected
for that matter amount verification
ongoing. In that view of the matter, the
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
notional amount of INR 1/- cannot simply
extinguish the remaining amount which is a
statutory dues to the tune of Rs. 5882.28
Crore (rounded off).
30. Yet another aspect which would assume
importance is the procedural requirement
prescribed under the law and availing an
opportunity to the appellant, the request
of the appellant is for remand of the
present proceedings on the ground of non-
compliance of Order XIII A of the Code of
Civil Procedure. Had it been a case where
the amount of the claim submitted by the
appellant was finally adjudicated to be of
INR 1/- instead of the same being a
notional amount and the reason for non-
admission was only because of the pendency
of the dispute with respect to the claims
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
before various authorities. The successful
Resolution Applicant would surely be aware
of the possibility of this disputed amount
being finalized as the amount of claim for
the appellant. Had it been a case of
throwing the Resolution Applicant into the
uncertainty as a result of its conduct the
same could be termed as the hydra-head
popping up.
31. Yet another angle that must not be left
sight of is the judgment of the Apex Court
in case of State of Gujarat vs. Arcelor
Mittal Nippon Steel India Limited, reported
in (2022) 6 SCC 459 where a pre CIRP claim
was adjudicated on merit after the approval
of the Resolution Plan, the said decision
where the issue of extinguishment of the
claim was not decided.
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
32. Yet another angle which needs to be
borne in mind is that the Apex Court in
case of Civil Appeal Nos.2444 and 2445 of
2019 challenging the judgment of the
Division Bench of this Court dated
17.07.2015 referred to the determination of
the issue of maintainability of the appeal
filed by the appellant before the
designated appellate authority. The Court
noted the filing of the suit for additional
demand and the developments thereafter. The
Court suggested that the appropriate cause
would be to avoid the judgment of the
Division Bench of the High Court as either
affected parties would file an appeal and
then that Special Leave Petitions and the
present appeals before the Apex Court can
be taken up together. This order will be
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
required to be reproduced:
"The impugned judgment emanates from the
judgment of the Division Bench of the Gujarat High
Court dated 17.07.2015 seeking to determine the issue
of maintainability of an appeal filed by the appellant
before the Designated Appellate Authority. There have
been subsequent developments:
1) The respondent filed a suit for additional demands
on 03.08.2016 and the appellant challenged the legality
of the demands. The suit was still pending when the
issue of a Resolution Plan to revive the appellant
company received the imprimatur of this Court and
came to be implemented in pursuance to the judgment
dated 15.11.2019. In the suit proceedings, a view was
taken that the observations in the Resolution Plan
giving a notional value to the demand of the
respondent of Rs.1 would stand in the way of the
respondent in prosecuting the suit. The suit was
accordingly dismissed on 28.09.2021 and the respondent
has preferred an appeal before the Division Bench being
First Appeal No.3659/2021 admitted on 18.12.2021
which is now listed on 05.04.2022.
2) Learned counsel for the appellant also seeks to raise
in these proceedings the issue of the effect of the
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
judgment of this Court qua Resolution Plan dated
15.11.2019. To that extent, the issue is common
between the appeal pending before the High Court and
as now sought to be raised by the appellant as a
subsequent development/fact.
The other issue we have already mentioned
aforesaid i.e. the maintainability of the appeal. These
are the two aspects to be examined in the present case
and it is thus, suggested that appropriate course of
action would be to await the judgment of the Division
Bench of the High Court as either of the affected
parties would file an appeal and then that Special Leave
Petition and the present appeals can be taken up
together.
The appellants have already deposited the amount
as demanded with interest in the present proceedings
though learned counsel for the respondent submits that
according to them the amount should have been higher
and in order to save limitation, they have filed the suit
referred to aforesaid.
To that extent, there is no great urgency in the
present proceedings as the suit has been dismissed of
the respondent and thus, that is not a demand pending
today as it will depend on the success of the appeal
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
filed by the respondent.
We are thus, of the view that it would be
appropriate to await the decision in First Appeal
No.3659/2021 before the Division Bench of the High
Court before taking up this matter or rather
simultaneously taking up this matter when the
aggrieved parties come before this Court against
whatever view the Division Bench takes.
It is not for us to direct the High Court how soon
they can bestow consideration on the appeal referred to
aforesaid but suffice for us to say that we would await
their view before taking up this matter and naturally,
they will consider the matter as expeditiously as
possible.
Needless for us to say that the parties before us
will not seek adjournments in the appeal pending before
the High Court if the Bench is inclined to take up."
Thus, being conscious of the decision
rendered by the Apex Court in Essar Steel,
where the Apex Court had not chosen to
dismiss the appeal in limie instead it had
suggested that the appropriate course would
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
be to await the judgment of the Division
Bench in First Appeal No.3659 of 2021.
Being conscious of the decision of Essar
Steel SC judgment and of Ghanshyam Mishra
(supra) the Court could have dismissed the
Civil Appeals pending before it however,
that course has not been found acceptable
by the Apex Court.
33. Without being deterred by the magnitude
of the appellant's claim and the merits
thereof, when the issue raised by the
respondent whether the claim is
extinguished, the answer shall need to be
given in negation.
34. Even if, the rainbow papers cannot
become a basis for reopening the resolution
plans which were approved and implemented
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
prior to the date of the decision and even
though the plan which has been approved by
ESIL SC's judgment and in effect from
16.12.2019. The submission that the said
plan can be altered as suggested by the
applicant by relying on the rainbow papers
would have a basis. In ordinary
circumstance, such an argument would lead
to an absurdity and as rightly pointed out
by the respondent may open a pandora's box
of the litigation. However, DGVCL had made
a claim clearly stating that INR
5882,28,00000 being the amount of the claim
and yet the notional amount of INR 1/- was
given to ensure the participation in the
corporate insolvency resolution process.
The Note 21 is extremely important where
operational creditors claims are subject to
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
disputes pending before various authorities
and therefore, they have been admitted with
a notional amount of INR 1/-. The claims
amount to seven creditors mentioned which
have not been classified as amount admitted
or amount rejected or amount verification
ongoing. As these are the subject to
dispute pending before various authorities.
The thrust of arguments before the Apex
Court in the decision of ESIC SC judgment
when the Court frowned upon any new demands
to be made after once the Resolution Plan
is finalized is on the ground that once
the company is taken over by anyone, it
cannot be taken by a surprise and
therefore, anything which has not been
considered by in the Resolution Plan, the
same cannot be later on made the basis to
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
upturn the final plan.
35. The appellant has relied on the
decision of Tata Steel BSL Limited vs.
Varsa, reported in 2019 6 MLR 682 (Bombay)
to contend that the CIRP does not put an
end to everything and a suit in respect of
pre CIRP claim can be allowed to continue
after approval of Resolution Plan. It is
true that the said judgment of Tata Steel
was of 28.03.2019 much prior to the ESIL SC
judgment (15.11.2019) and Ghanshyam Mishra
is of 13.04.2021. Special Leave Petition
Diary No.36520/2019 has been filed against
the judgment in Tata Steel BSL Limited
(Supra) where the Court vide order dated
20.01.2020 issued the notice and imposed
the stay on the operation of this decision.
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
Even without any reference to the Tata
Steel BSL Limited decision, the fact
remains that the suit in respect of pre
CIRP claim had already been brought to the
notice of Resolution Professional.
36. Before the NCLT, the claim had been
made and that the same had been taken note
of. It was also specifically noted that at
the time of finalizing all the claims that
the operational creditors' claims were
subject to dispute pending before the
authorities. Giving of INR 1/- was for the
purpose of permitting the appellant to
participate in the very process of
corporate insolvency resolution. The
notional amount of INR 1/- was thus meant
for ensuring of participation and not for
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
adjudicating any amount, it was neither
admitted nor denied and therefore, to say
that the appellant could not have continued
the suit in respect of the pre-CIRP claim
is not an acceptable proposition.
37. The question therefore, would be that
whether the judgment which is under
challenge passed by the Commercial Court
under Order XIII A of the Code of Civil
Procedure to avoid the lengthy trial on the
ground that the claimant had no real
prospect of succeeding on the claim and
there was no other compelling reason why
the claim disposed of before recording of
oral evidence is justifiable. At the first
glance, the appellant's claim appeared to
be extinguished upon the approval of the
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
Resolution Plan filed by the AMIPL in the
CIRP of erstwhile ESIL. At the same time,
the Court was required to follow the
procedure which is also sacrosanct.
Application preferred by the respondent
seeking dismissal of the appellant's suit
was an application for direction and it was
not an application for summary judgment and
Order XIII A of the Civil Procedure Code.
It is also not a case where there was a
substance and style was missing as an
application for summary judgment would need
to the application for summary judgment
under Order XIII A of the Code of Civil
Procedure whether would validate the
judgment.
38. Apt would be to refer to the decision
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
in case of Monsanto Technology Llc Thru
The Authorised Representative Ms. Natalia
Voruz & Others Vs. Nuziveedu Seeds Ltd.
Thru The Director & Others, reported in
(2019) 3 SCC 381 where the Apex Court has
held that there should be strict compliance
with the provision of Commercial Courts
Act, 2015. Appellant's reliance is with a
view to point out that there were complex
issues of the law and fact and the findings
of the Apex Court are that rendering of a
summary judgment in such a situation was
not desirable.
39. Of course, here was not a case of any
oral evidence led alone the expert evidence
to decide the issue of extinguishment and
yet the fact remains that no procedure as
contemplated under the Commercial Courts
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
Act was followed. Even if, the substance is
looked at and it is construed to be a
substantive compliance with the procedure
prescribed under Order XIII A of the Code
of Civil Procedure. It cannot be denied
that it was an application for direction
and there was no sufficient opportunity to
contest the application for direction filed
by the respondent. The application for
direction was given on 02.12.2020 of course
it took about six months' time for the
Commercial Court to adjudicate the issue
and to pass the judgment which is impugned
and even when it is thrown out on the
ground of the real prospect of succeeding
on the claim was missing, there ought to
have been sufficient opportunities to
object to the reliefs sought by the
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
respondent.
40. Undoubtedly, the powers are there to
pass the summary judgment as contained in
Order XIII A of the Code of Civil Procedure
and even if the Court can exercise the
severe view of the extinguishment of the
claim, the judgment can still be assailed
if the Court is of the opinion that no
sufficient opportunity was made available.
41. We need to also refer to the decision
of Ambalal Sarabhai Enterprise vs. K.S.
Infrastructure, reported in 2020 15 SCC
585 which requires for strict compliance of
the provision of the 2015 Act. The issue,
of course, was whether the question was a
commercial dispute as per 2015 Act, this
related to the immovable property. It
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
provided that the dispute relating to the
immovable property would be termed as
commercial dispute only when the property
is used in trade or commerce. While holding
that there was no material to show the
property in question was used exclusively
for trade or commerce, the Court held that
as a special procedure has been prescribed
under the 2015 Act. It is essential to
ensure that only the disputes answering to
definition of commercial dispute is
subjected to that procedure. The Court also
has observed that the intention of
legislature in enacting 2015 Act is to
ensure that expeditious disposal of the
commercial disputes can be achieved and
also to create a positive environment for
investment and development. At the same
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
time, the requirement for following special
procedure prescribed cannot be undermined.
42.For the foregoing reasons, the present
first appeal is allowed. The judgment and
order dated 28.09.2021 passed by the
learned 2nd Additional Senior Civil Judge,
Surat in Commercial Civil Suit No.4 of 2020
(Old Special Civil Suit No.373 of 2016) is
hereby quashed and set aside and the matter
is remitted back to the concerned Trial
Court for re-hearing on merits. The Trial
Court is directed to hear the suit on
merits and in accordance with law and the
same shall decide and dispose of as
expeditiously as possible. The Commercial
Civil Suit No.4 of 2020 (Old Special Civil
Suit No.373 of 2016) is restored to its
original file.
(SONIA GOKANI, CJ)
(HEMANT M. PRACHCHHAK,J)
C/FA/3659/2021 CAV JUDGMENT DATED: 24/02/2023
At this stage, the learned senior
advocate, Mr.Pahwa seeks the stay of
implementation of this judgment and order.
What all the Court has said is of restoring
the suit, which in its original status was
at the stage of framing of the issues,
recognizing the fact that it is a
Commercial Court which will need to be
expedited rather than staying the matter,
we would request the learned Presiding
Officer of the Commercial Court to initiate
the recordance of the evidence, which shall
be a step after once the issues are framed
after about six weeks.
Request is accordingly dealt with.
(SONIA GOKANI, CJ)
(HEMANT M. PRACHCHHAK,J)
M.M.MIRZA
