Gujarat High Court
Rare Asset Reconstruction Company vs Vivek Vijay Gupta, on 5 December, 2018
Author: Anant S. Dave
Bench: Anant S. Dave, Biren Vaishnav
C/SCA/1541/2018 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 1541 of 2018
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RARE ASSET RECONSTRUCTION COMPANY
Versus
VIVEK VIJAY GUPTA,
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Appearance:
MR.CHIRAG B UPADHYAY(6735) for the PETITIONER(s) No. 1
MR JAYESH A KOTECHA(5293) for the RESPONDENT(s) No. 3
MR. JAIMIN R DAVE(7022) for the RESPONDENT(s) No. 6
MR.VISHAL J DAVE(6515) for the RESPONDENT(s) No. 4
NIPUN SINGHVI(9653) for the RESPONDENT(s) No. 4
NOTICE SERVED(4) for the RESPONDENT(s) No. 1,2,5,7
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CORAM: HONOURABLE THE ACTING CHIEF JUSTICE ANANT S. DAVE
and
HONOURABLE MR.JUSTICE BIREN VAISHNAV
Date : 05/12/2018
ORAL ORDER
(PER : HONOURABLE THE ACTING CHIEF JUSTICE ANANT S. DAVE) When the matter is called out, a request is made that either the matter be passed over or be taken at 2:30 in view of the difficulty on the part of learned Senior Counsel who appears in this case.
Today, the Board of various matters consists of more than 325 matters and to accede to the request to pass-over or to be taken at 2:30 is not possible.
Page 1 of 7 C/SCA/1541/2018 ORDER
This writ petition under Articles 226 and 227 of the Constitution of India has been preferred by the petitioners with the following prayers:
(A) This Hon'ble Court be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other writ quashing and setting aside the impugned order dated 15.01.2018 made by respondent No.7 in I.A. No.9 of 2018 in CP(IB) No.5 of 2017;
(B) This Hon'ble Court be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other writ directing the Respondent No.4 to place the Resolution Plan submitted by the present petitioner, before the Committee of Creditors for its reconsideration in accordance with law;
(C) This Hon'ble Court be pleased to stay the implementation, operation and execution of the impugned order dated 15.01.2018 passed by the learned Tribunal in IA No.9 of 2018, in CP (IB) No.5 of 2017 and further be pleased to stay further proceedings before the National Company Law Tribunal, Ahmedabad Bench in relation to the respondent No.1 Company, pending final disposal of the present Special Civil Application;Page 2 of 7 C/SCA/1541/2018 ORDER
At the outset, reference may be made to Paragraphs 81, 82 and 83 of the judgment dated 04.10.2018 rendered by Hon'ble Supreme Court in the case of Arcelormittal India Private Limited v. Satish Kumar Gupta & Ors. - Civil Appeal Nos.9402-9405 of 2018, which read as under:
"81. If, on the other hand, a resolution plan has been approved by the Committee of Creditors, and has passed muster before the Adjudicating Authority, this determination can be challenged before the Appellate Authority under Section 61, and may further be challenged before the Supreme Court under Section 62, if there is a question of law arising out of such order, within the time specified in Section 62. Section 64 also makes it clear that the timelines that are to be adhered to by the NCLT and NCLAT are of great importance, and that reasons must be recorded by either the NCLT or NCLAT if the matter is not disposed of within the time limit specified. Section 60(5), when it speaks of the NCLT having jurisdiction to entertain or dispose of any application or proceeding by or against the corporate debtor or corporate person, does not invest the NCLT with the jurisdiction to interfere at an applicants behest at a stage before the quasi-judicial determination made by the Adjudicating Authority. The non-obstante clause in Section 60(5) is designed for a different purpose: to ensure that the NCLT alone has jurisdiction when it Page 3 of 7 C/SCA/1541/2018 ORDER comes to applications and proceedings by or against a corporate debtor covered by the Code, making it clear that no other forum has jurisdiction to entertain or dispose of such applications or proceedings.
82. One thing that must be made clear at this stage is that when Section 33 speaks of the "Adjudicating Authority" in sub-section (1), it is referring to both the Adjudicating Authority as well as the Appellate Authority. An Adjudicating Authority may decide in favour of a resolution plan, which order may then be set aside by the Appellate Authority. This order of the Appellate Authority, setting aside the order of the Adjudicating Authority, would then be the order which rejects the resolution plan for the purposes of Section 33. The same would apply to an ultimate order of rejection by the Supreme Court under Section 62. This is on the principle that, as stated in Lachmeshwar Prasad Shukul & Ors. v. Keshwar Lal Chaudhuri & Ors. AIR 1941 FC 5 and followed in a number of our judgments, an appeal is a continuation of the original proceedings.
83. Given the fact that both the NCLT and NCLAT are to decide matters arising under the Code as soon as possible, we cannot shut our eyes to the fact that a large volume of litigation has now to be handled by both the aforesaid Tribunals. What happens in a case where the NCLT or the NCLAT decide a matter arising out of Section 31 of the Page 4 of 7 C/SCA/1541/2018 ORDER Code beyond the time limit of 180 days or the extended time limit of 270 days? Actus curiae neminem gravabit • the act of the Court shall harm no man - is a maxim firmly rooted in our jurisprudence (see Jang Singh v. Brijlal & Ors. [1964] 2 S.C.R. 146 at page 149, and A.S. Antulay v. R.S. Nayak & Ors. [1988] Supp. 1 S.C.R. 1 at page
71). It is also true that the time taken by a Tribunal should not set at naught the time limits within which the corporate insolvency resolution process must take place. However, we cannot forget that the consequence of the chopper falling is corporate death. The only reasonable construction of the Code is the balance to be maintained between timely completion of the corporate insolvency resolution process, and the corporate debtor otherwise being put into liquidation. We must not forget that the corporate debtor consists of several employees and workmen whose daily bread is dependent on the outcome of the corporate insolvency resolution process. If there is a resolution applicant who can continue to run the corporate debtor as a going concern, every effort must be made to try and see that this is made possible. A reasonable and balanced construction of this statute would therefore lead to the result that, where a resolution plan is upheld by the Appellate Authority, either by way of allowing or dismissing an appeal before it, the period of time taken in litigation ought to be excluded. This is not to say that the NCLT and NCLAT will be tardy in decision Page 5 of 7 C/SCA/1541/2018 ORDER making. This is only to say that in the event of the NCLT, or the NCLAT, or this Court taking time to decide an application beyond the period of 270 days, the time taken in legal proceedings to decide the matter cannot possibly be excluded, as otherwise a good resolution plan may have to be shelved, resulting in corporate death, and the consequent displacement of employees and workers."
In view of the above, considering the availability of alternative efficacious inbuilt remedy under Section 61 of the Insolvency and Bankruptcy Code, 2016, the petitioner has to approach the appellate authority - National Company Law Appellate Tribunal against the order impugned passed by the National Company Law Tribunal.
In view of the above position, this petition is disposed of by relegating the petitioner to avail the alternative efficacious remedy under the law.
It is made clear that in view of the availability of alternative efficacious inbuilt remedy under Section 61 of the Insolvency and Bankruptcy Code, 2016, we have not entered into merits of the contentions raised in the petition. Page 6 of 7 C/SCA/1541/2018 ORDER
Notice is discharged. Interim relief, granted earlier, stands vacated.
(ANANT S. DAVE, ACJ) (BIREN VAISHNAV, J) sunil Page 7 of 7