Ideal Surgicals vs National Company Law Tribunal
2021 Latest Caselaw 13683 Ker

         IN THE HIGH COURT OF KERALA AT ERNAKULAM
                         PRESENT
            THE HONOURABLE MR.JUSTICE V.G.ARUN
   FRIDAY, THE 2ND DAY OF JULY 2021 / 11TH ASHADHA, 1943
                  WP(C) NO. 8257 OF 2021
PETITIONER/S:

         IDEAL SURGICALS
         NJARACKAL HOUSE, PRIYADARSHINI NAGAR,
         KONTHURUTHY, THEVARA-682 013, REPRESENTED BY ITS
         MANAGING PARTNER ABIN ANTU MATHEW.
         BY ADVS.
         G.HARIKUMAR (GOPINATHAN NAIR)
         SHRI.AKHIL SURESH


RESPONDENT/S:

    1    NATIONAL COMPANY LAW TRIBUNAL
         COMPANY LAW BHAVAN BMC ROAD, THRIKKAKARA P.S.
         KAKKANAD, KOCHI-682 021, REPRESENTED BY ASSISTANT
         REGISTRAR.
    2    BIJOY PRABHAKARAN PULIPRA,
         RESOLUTION PROFESSIONAL PVS MEMORIAL HOSPITAL
         PRIVATE LIMITED, GROUND FLOOR, TC 11/798(1),
         VAYAL ROAD, NANDANCODE, KOWDIAR P.O.,
         THIRUVANANTHAPURAM.
    3    LISSIE MEDICAL INSTITUTIONS
         LISSIE HOSPITAL, ERNAKULAM-682 018, REPRESENTED
         BY ITS MANAGING DIRECTOR.

    4    PVS MEMORIAL HOSPITAL,
         BANERJI ROAD, OPP.GOKULAM PARK, KALOOR,
         ERNAKULAM, KERALA-682 017, REPRESENTED BY ITS
         MANAGING DIRECTOR.

    5    ADDL.R5 LIC HOUSING FINANCE LIMITED,
         HAVING ITS BACK OFFICE AT 9TH FLOOR, JEEVAN
         PRAKASH BUILDING, M.G. ROAD, ERNAKULAM-682011,
         REPRESENTED BY ITS AUTHORIZED SIGNATORY AND AREA
         MANAGER, MR. ANEESH PANIKKASSERY, S/O.
         CHANDRASEKHARAN P.K., AGED 42 YEARS, RESIDING AT
         FLAT NO.A1, YASORAM PRASEEDA APARTMENTS, GANDHI
         NAGAR, KADAVANTHRA ROAD, ERNAKULAM-682020.
  W.P.(C) No.8257/2021 & con.cases
                             2




         (ADDITIONAL R5 IS IMPLEADED AS PER ORDER DATED
         31/05/2021 IN IA NO.1/2021)

         BY ADVS.
         SHRI.P.VIJAYAKUMAR, ASG OF INDIA
         K.LATHA
         PRADEEP JOY
         S.SREEKUMAR (SR.)
         MILLU DANDAPANI
         P.MARTIN JOSE
         P.PRIJITH
         THOMAS P.KURUVILLA
         ANNA LINDA V.J
         AJAY BEN JOSE
         MANJUNATH MENON
         R.GITHESH
         P.H.ARVINDH PANDIAN (SR.)
OTHER PRESENT:

         ASG-SRI.P.VIJAYAKUMAR

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON

16.06.2021 ALONG WITH WPC 11233 & 12125/2021, THE COURT ON

02.07.2021 DELIVERED THE FOLLOWING:
  W.P.(C) No.8257/2021 & con.cases
                             3




         IN THE HIGH COURT OF KERALA AT ERNAKULAM
                          PRESENT
            THE HONOURABLE MR.JUSTICE V.G.ARUN
   FRIDAY, THE 2ND DAY OF JULY 2021 / 11TH ASHADHA, 1943
                  WP(C) NO. 11233 OF 2021
PETITIONER/S:

         PACE BIOMEDICAL
         35/735 A, PALARIVATTOM P.O., KOCHI 682 025, REP.
         BY ITS PROPRIETOR MATHEW THOMAS
         BY ADV G.HARIKUMAR (GOPINATHAN NAIR)


RESPONDENT/S:

    1    NATIONAL COMPANY LAW TRIBUNAL
         COMPANY LAW BHAVAN BMC ROAD, THRIKKAKARA P.S.
         KAKKANAD, KOCHI 682 021
         REP. BY ASSISTANT REGITRAR
    2    BIJOY PRABHAKARAN PULIPRA
         RESOLUTION PROFESSIONAL PVS MEMORAIAL HOSPITAL,
         PRIVATE LIMITED, GROUND FLOOR, TC 11/798(1),
         VAYAL ROAD, NANDANCODE, KOWDIAR P.O.,
         THIRUVANANTHAPURAM 695 004.
    3    LISSIE MEDICAL INSTITUTIONS
         LISSIE HOSPITAL, ERNAKULAM 682 018
         REP. BY ITS MANAGING DIRECTOR
    4    PVS MEMORIAL HOSPITAL
         BANERJI RD, OPP GOKULAM PARK, KALOOR, ERNAKULAM-
         KERALA 682 017
         REP. BY ITS MANAGING DIRECTOR.
    5    ADDL. R5 LIC HOUSING FINANCE LIMITED
         HAVING ITS BACK OFFICE AT 9TH FLOOR, JEEVAN
         PRAKASH BUILDING, M.G.ROAD, ERNAKULAM-682 011.
         REPRESENTED BY ITS AUTHORIZED SIGNATORY AND AREA
  W.P.(C) No.8257/2021 & con.cases
                             4



         MANAGER, MR. ANEESH PANIKKASSERY, S/O
         CHANDRASEKHARAN P.K, AGED 42 YEARS, RESIDING AT
         FLAT NO A1, YASORAM PRASEEDA APARTMENTS, GANDHI
         NAGAR, KADAVANTHRA ROAD, ERNAKULAM-682 020 (IS
         IMPLEADED AS ADDITIONAL 5TH RESPONDENT AS PER
         ORDER DATED 31.5.21 IN IA NO. 1/21 IN WPC
         NO.11233/21)

         BY ADVS.
         K.LATHA
         PRADEEP JOY
         S.SREEKUMAR (SR.)
         MILLU DANDAPANI
         P.MARTIN JOSE
         P.PRIJITH
         THOMAS P.KURUVILLA
         R.GITHESH
         AJAY BEN JOSE
         ANNA LINDA V.J
         MANJUNATH MENON
         P.H.ARVINDH PANDIAN (SR.)

THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON

16.06.2021 ALONG WITH WPC 8257 & 12125/2021, THE COURT ON

02.07.2021 DELIVERED THE FOLLOWING:
  W.P.(C) No.8257/2021 & con.cases
                             5




         IN THE HIGH COURT OF KERALA AT ERNAKULAM
                          PRESENT
            THE HONOURABLE MR.JUSTICE V.G.ARUN
   FRIDAY, THE 2ND DAY OF JULY 2021 / 11TH ASHADHA, 1943
                  WP(C) NO. 12125 OF 2021
PETITIONER/S:

    1    M/S. ORLEM PHARMA PVT. LTD
         REPRESENTED BY ITS DIRECTOR, MR.SIMON JOHN, DOOR
         NO.37/64, DD MILESTONE, KADAVANTHRA, COCHIN - 682
         020.
    2    ST.ANTONYS MEDICAL DISTRIBUTORS
         REPRESENTED BY ITS PROPRIETOR, MRS.SNEHA ABRAHAM,
         DOOR NO.64/162A, NEAR LISSIE HOSPITAL, KALOOR,
         COCHIN - 682 018.
         BY ADV P.JINISH PAUL


RESPONDENT/S:

    1    NATIONAL COMPANY LAW TRIBUNAL
         COMPANY LAW BHAVAN, BMC ROAD, KAKKANAD, KOCHI -
         682 021, REP. BY ITS ASSISTANT REGISTRAR.
    2    LISSIE MEDICAL INSTITUTIONS
         LISSUE HOSPITAL, ERNAKULAM - 682 018, REP. BY ITS
         MANAGING DIRECTOR.
    3    PVS MEMORIAL HOSPITAL PVT.LTD.
         NO.XXIV/1484, KALOOR, ERNAKULAM, KERALA - 682
         017, REP. BY ITS MANAGING DIRECTOR.
         BY ADVS.
         S.KRISHNAN
         K.LATHA
         PRADEEP JOY
         S.SREEKUMAR (SR.)
         MILLU DANDAPANI
         P.MARTIN JOSE
  W.P.(C) No.8257/2021 & con.cases
                             6



          P.PRIJITH
          THOMAS P.KURUVILLA
          R.GITHESH
          AJAY BEN JOSE
          ANNA LINDA V.J
          MANJUNATH MENON
          P.H.ARVINDH PANDIAN (SR.)
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON

16.06.2021 ALONG WITH WPC 11233 & 8257/2021, THE COURT ON

02.07.2021 DELIVERED THE FOLLOWING:
 W.P.(C) No.8257/2021 & con.cases
                            7



                           JUDGMENT

Dated this the 2nd day of July, 2021

[W.P.(C) Nos. 8257, 11233 & 12125 of 2021]

The challenge in these original petitions is

against the proceedings of the National Company

Law Tribunal (NCLT), Kochi Bench. The essential

facts are as under; For the sake of convenience,

the parties and the Exhibits are referred to, as

described in W.P.(C) No.8257 of 2021;

The proceedings under challenge pertains to

the Corporate Insolvency Resolution Process

initiated under the Insolvency and Bankruptcy

Code, 2016 ('the Code' for short) with respect to

the 4th respondent; Corporate Debtor. The

proceedings commenced at the instance of two

Operational Creditors. Ext.P1 order was issued by

the NCLT appointing the second respondent as W.P.(C) No.8257/2021 & con.cases

Interim Resolution Professional(IRP). The IRP was

reappointed as the Resolution Professional (RP) by

the members of the Committee of Creditors. In

accordance with the procedure prescribed by the

Code, application under Sections 30(6) and 31(1)

was filed by the RP, seeking approval of the

Resolution Plan submitted by the third respondent;

Resolution Applicant. By Ext.P2 order dated

22.02.2021, the NCLT approved the Resolution Plan

and made it effective from the date of order.

Being aggrieved by Ext.P2 order, the petitioners,

who are Operational Creditors, preferred appeals

before the National Company Law Appellate Tribunal

(NCLAT). These writ petitions are filed on the

premise that the appeals and stay petitions are

not being taken up by the NCLAT. While admitting

the writ petition, this Court granted an interim

stay of further proceedings pursuant to Ext.P2 W.P.(C) No.8257/2021 & con.cases

order.

2. The third respondent and the additional 5th

respondent has challenged the very maintainability

of the writ petition.

3. I heard Advocates Akhil Suresh and Jinish

Paul appearing for the petitioners, Senior

Advocates Sri.P.H.Arvindh Pandian, Sri.S.Sreekumar

appearing for the contesting respondents,

Sri.Millu Dandapani for the Corporate Debtor,

Smt.K.Latha for the Resolution Professional and

Smt.S.Krishna, learned Counsel representing the

ASG.

4. The maintainability of the writ petitions

is challenged on the ground that the petitioners

have an effective alternative remedy of appeal

under Section 61 of the Code. In support of this

contention, reliance is placed on the Division

Bench decision of this Court in Sulochana Gupta W.P.(C) No.8257/2021 & con.cases

and others v. RBG Enterprises Pvt. Ltd and others

(judgment in W.A.No.1083 of 2020). The averment in

the writ petitions that the appeals are not being

taken up, as the NCLAT is on leave, is refuted.

According to the learned Senior Counsel, the

appeals are defective and will be taken up only

after the defects are cured. It is pointed out

that the NCLAT is functioning and the appeals

filed by other Operational Creditors against

Ext.P2 order had come up for admission. However,

no stay or even status quo order was granted. It

is contended that interference by the High Court,

in exercise of jurisdiction under Article 226 of

the Constitution, will defeat the very objective

of the Code, which has been enacted with a view to

consolidate and amend the law relating to

insolvency resolution. Attention is drawn to the

observations of the Honourable Supreme Court in W.P.(C) No.8257/2021 & con.cases

Swiss Ribbons Pvt.Ltd and another v. Union of

India and others [(2019) 4 SCC 17] and Ghanashyam

Mishra and Sons Private Ltd v. Edelweiss Asset

Reconstruction Company [2021 SCC Online SC 313] to

contend that the IBC, 2016 being a self contained

Code, the High Courts should refrain from

interfering with the resolution process.

5. Learned Counsel for the petitioners

submitted that their appeals have been accepted by

the NCLAT, but are yet to be numbered and posted

for admission. In the meanwhile, if the resolution

process is continued in accordance with Ext.P2

order, the appeals will be rendered infructuous.

In such circumstances, the High Court can, in the

interest of justice, exercise its jurisdiction

under Article 226 to safeguard the interest of the

petitioners, till the appeals are taken up for

consideration. Ext.P3 is pointed out to be an W.P.(C) No.8257/2021 & con.cases

interim order granted by this Court under similar

circumstances.

6. Learned Counsel for the 4th respondent

supported the submissions made on behalf of the

petitioners and contended that Ext.P2 order is

patently illegal. That, hasty steps are being

taken to give effect to the order before the

appeals are taken up for hearing and that,

implementation of the Resolution Plan will cause

serious prejudice to the Corporate Debtor and its

creditors.

7. As observed by the Apex Court in M/s.

Innoventive Industries Ltd v. ICICI Bank [AIR 2017

SC 4084], the IBC, 2016 is a Single Unified

Umbrella Code, covering the entire gamut of the

law relating to insolvency resolution of corporate

persons and others in a time bound manner. The

code provides a three-tier mechanism namely, (i) W.P.(C) No.8257/2021 & con.cases

the NCLT, which is the adjudicating authority (ii)

the NCLAT, which is the appellate authority (iii)

the Supreme Court, which is the final authority,

for dealing with all issues that may arise in

relation to the re-organisation and insolvency

resolution of corporate persons. An order passed

by the NCLT is appealable to the NCLAT under

Section 61 of the Code and the orders of the NCLAT

are amenable to the appellate jurisdiction of the

Supreme Court under Section 62.

8. In Swiss Ribbons Pvt.Ltd (supra), the

Honourable Supreme Court, while rejecting the

challenge against certain provisions of the code

held as under:

"The Insolvency Code is a legislation which deals with economic matters and, in the larger sense, deals with the economy of the country as a whole. Earlier experiments, as we have seen, in terms of legislations having failed, 'trial' having led to repeated 'errors', ultimately led to the enactment of the Code. The experiment contained in the Code, judged by the generality of its provisions and not by so-called crudities W.P.(C) No.8257/2021 & con.cases

and inequities that have been pointed out by the petitioners, passes constitutional muster."

9. One of the issues that arose for

consideration before the Division Bench in

Sulochana Gupta, was the maintainability of the

writ petition under Article 226 against an order

of the NCLT. The Division Bench, after elaborate

survey of precedents, answered the issue by

holding that the writ petition to be not

maintainable.

In view of the exposition of the Honourable

Supreme Court regarding the objective of the Code

and the authoritative pronouncement of the

Division Bench, with which I am in respectful

agreement, the writ petitions are dismissed.

Sd/-

V.G.ARUN JUDGE Scl/ W.P.(C) No.8257/2021 & con.cases

APPENDIX OF WP(C) 8257/2021

PETITIONER ANNEXURE EXHIBIT P1 A TRUE COPY OF THE ORDER DATED 16.10.2019 IN TIBA/11/KOB/2019 IBA/28/KOB/2019.

EXHIBIT P2 A TRUE COPY OF THE ORDER OF THE NATIONAL COMPANY LAW TRIBUNAL DATED 22.02.2021.

EXHIBIT P3 A TRUE COPY OF THE ORDER OF THIS HON'BLE COURT IN WP(C) NO.6476/2021 DATED 15.03.2021.

RESPONDENT'S EXHBITS ANNEXURE A TRUE COPY OF MINUTES OF THE 27TH CoC Meeting held on 26.12.2020

ANNEXURE B TRUE COPY OF ORDER No.IA(IBC)/61/KOB/2021 IN IA(IBC)/61/KOB/2021 IN IA(IBC/13/KOB/2021 IN TIBA/11/KOB/2019 DATED 16.03.2021 OF NCLT W.P.(C) No.8257/2021 & con.cases

APPENDIX OF WP(C) 11233/2021

PETITIONER ANNEXURE EXHIBIT P1 A TRUE COPY OF THE ORDER DATED 16.10.2019 IN TIBA/11/KOB/2019 AND IBA/28/KOB/2019.

Exhibit P2 A TRUE COPY OF THE ORDER OF THE NATIONAL COMPANY LAW TRIBUNAL DATED 22.2.2021 Exhibit P3 A TRUE COPY OF THE ORDER OF THIS HONBLE COURT IN WPC NO 6476/2021 DATED 15.3.2021 Exhibit P4 A TRUE COPY OF THE ORDER OF THIS HONBLE COURT IN WPC NO 8257/2021 DATED 30.3.2021 RESPONDENTS EXHIBITS

ANNEXURE A TRUE COPY OF MINUTES OF THE 27TH COC MEETING HELD ON 26.12.2020

ANNEXURE B TRUE COPY OF ORDER No.IA(IBC)/61/KOB/2021 IN IA(IBC)/61/KOB/2021 IN IA(IBC/13/KOB/2021 IN TIBA/11/KOB/2019 DATED 16.03.2021 OF NCLT W.P.(C) No.8257/2021 & con.cases

APPENDIX OF WP(C) 12125/2021

PETITIONER ANNEXURE Exhibit P1 THE TRUE COPY OF THE ORDER DATED 22/02/2021 PASSED BY THE 1ST RESPONDENT.

Exhibit P2 THE TRUE COPY OF THE ONLINE FILING RECEIPT AND DOCKET OF APPEAL SHOWING THE ENTRY OF DIARY NUMBER TO THE APPEAL FILED BY THE 1ST PETITIONER.

Exhibit P3 THE TRUE COPY OF THE ONLINE FILING RECEIPT AND DOCKET OF APPEAL SHOWING THE ENTRY OF DIARY NUMBER TO THE APPEAL FILED BY THE 2ND PETITIONER.

Exhibit P4 THE TRUE COPY OF THE ORDER DATED 30/03/2021 IN WPC.8257/2021 ON THE FILES OF THIS HONBLE COURT.