Karnataka High Court
State Of Karnataka vs Tiffins Barytes Asbestos And Paints ... on 20 January, 2020
Bench: Chief Justice, Hemant Chandangoudar
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF JANUARY, 2020
PRESENT
THE HON'BLE MR. ABHAY S. OKA, CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE HEMANT CHANDANGOUDAR
WRIT PETITION NO. 41029/2019 (GM-MMS)
BETWEEN
1. STATE OF KARNATAKA
DEPARTMENT OF COMMERCE
AND INDUSTRIES (MSME AND MINES)
VIKASA SOUDHA, 1ST FLOOR
DR. AMBEDKAR ROAD
BANGALORE - 560 001
REP. BY ITS SECRETARY
2. DEPARTMENT OF MINES AND GEOLOGY
GOVERNMENT OF KARNATAKA
KHANIJA BHAVAN, 5TH FLOOR
RACE COURSE ROAD
BANGALORE - 560 001
REP. BY ITS DIRECTOR
3. UNDER SECRETARY
DEPARTMENT OF COMMERCE
AND INDUSTRIES (MINES)
VIKASA SOUDHA, 1ST FLOOR
DR. AMBEDKAR ROAD
BANGALORE 560 001
...PETITIONERS
(BY SRI R. SUBRAMANI, AAG A/W
SRI VIKRAM HUILGOL, HCGP)
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AND
1. TIFFIN'S BARYTES ASBESTOS AND PAINTS LTD.,
(A COMPANY UNDER CORPORATE INSOLVENCY
RESOLUTION PROCESS)
REP. BY ITS RESOLUTION PROFESSIONAL
SRI K. VASUDEVAN
NO.14 & 16 GOPALAKRISHNA STREET
T. NAGAR, CHENNAI-600 017
2 . THE COMMITTEE OF CREDITORS
M/S TIFFIN BARYTES ASBESTOS & PAINTS LIMITED
NO.14 & 16, GOPALAKRISHNAN ROAD (WEST)
T. NAGAR, CHENNAI-600 017
REP. BY M.POOBALAN
2(a). M. POOBALAN
S/O MUTHUSWAMY
AGED ABOUT 57 YEARS
NO.2, 2ND FLOOR, 3RD CROSS
1ST MAIN ROAD, DEVAPPA GARDEN
NAGASHETTIHALLI
RMV 2ND STAGE EXTENSION
BANGALORE-560094
2(b). MRS. P. POONGODI
W/O M POOBALAN
AGED NOT KNOWN TO THE PETITIONERS
NO.2, 2ND FLOOR, 3RD CROSS
1ST MAIN ROAD, DEVAPPA GARDEN
NAGASHETTIHALLI
RMV 2ND STAGE EXTENSION
BANGALORE-560094
2(c). M/S D. P. EXPORTS
A "PARTNERSHIP FIRM"
REGISTERED UNDER THE PARTNERSHIP ACT,
HAVING ITS OFFICE AT
NO.2, 2ND FLOOR, 3RD CROSS
1ST MAIN ROAD, DEVAPPA GARDEN
NAGASHETTIHALLI
RMV 2ND STAGE EXTENSION
3
BANGALORE-560094
REP. BY MRS. P. POONGODI
W/O M. POOBALAN
2(d). M/S D & D ENTERPRISES
A "PROPRIETARY CONCERN"
HAVING ITS OFFICE AT
NO.2, 2ND FLOOR, 3RD CROSS
1ST MAIN ROAD, DEVAPPA GARDEN
NAGASHETTIHALLI
RMV 2ND STAGE EXTENSION
BANGALORE-560094
REP. BY M. POOBALAN
S/O MUTHUSWAMY
AGED ABOUT 57 YEARS,
2(e). M/S ELITE EXPORTS
A "PARTNERSHIP FIRM"
REGISTERED UNDER THE PARTNERSHIP ACT,
HAVING ITS OFFICE AT
NO.2, 2ND FLOOR, 3RD CROSS
1ST MAIN ROAD, DEVAPPA GARDEN
NAGASHETTIHALLI
RMV 2ND STAGE EXTENSION
BANGALORE-560094
REPRESENTED BY M. POOBALAN
S/O MUTHUSWAMY
AGED ABOUT 57 YEARS
2(f). M/S P & D ENTERPRISES
A "PROPRIETARY CONCERN"
HAVING ITS OFFICE AT
NO.2, 2ND FLOOR, 3RD CROSS
1ST MAIN ROAD, DEVAPPA GARDEN
NAGASHETTIHALLI
RMV 2ND STAGE EXTENSION
BANGALORE-560094
REP. BY M. POOBALAN
S/O MUTHUSWAMY
AGED ABOUT 57 YEARS
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2(g). M/S UDHYAMAN INVESTMENTS PRIVATE LIMITED
(GROUP COMPANY OF EMBASSY GROUP)
1ST FLOOR, EMBASSY POINT
NO.150, INFANTRY ROAD
BANGALORE-560001
REP. BY ITS AUTHORISZED SIGNATORY
M. POOBALAN
NO.2, 2ND FLOOR, 3RD CROSS
1ST MAIN ROAD, DEVAPPA GARDEN
NAGASHETTIHALLI, RMV 2ND STAGE EXTENSION
BANGALORE-560094
2(h). JSW STEELS LTD.
VIJAYANAGAR WORKS AT
PO VIDYANGAR
BELLARY DISTRICT-583 275
REP. BY ITS GENERAL MANAGER
3. M/S EMBASSY PROPERTY DEVELOPMENTS PVT LTD.
FIRST FLOOR, EMBASSY POINT, 150
INFANTRY ROAD
BANGALORE-560001
REP. BY ITS GENERAL MANAGER
...RESPONDENTS
(BY SRI K.N. PHANINDRA, SR. ADVOCATE FOR
SMT. VAISHALI HEGDE, ADVOCATE FOR R1 AND R2;
SRI ADARSH GANGAL, ADVOCATE FOR R2(A);
SRI MANJUNATH SREEDHAR HEGDE, ADVOCATE
FOR R2(B TO E);
SRI K.C.E. MANJUNATH FOR R2(F);
SRI SRIKANTH PATIL K, ADVOCATE FOR R2(G);
SRI SWAMINI G. MOHANAMBAL, ADVOCATE FOR R2(H);
SRI B. R. SRIVATSA, ADVOCATE FOR R3)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE
THE ORDER DATED 3RD MAY 2019 IN M.A.NO.632/2018 IN
CP/39/2018 OF THE NATIONAL COMPANY LAW TRIBUNAL,
CHENNAI AS BEING ONE WITHOUT JURISDICTION AND
ATTENDED BY FRAUD VIDE ANNEXURE-A AND ETC.
THIS WRIT PETITION COMING ON FOR DISPOSAL THIS
DAY, CHIEF JUSTICE MADE THE FOLLOWING:
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ORDER
Heard the learned Additional Government Advocate appearing for the Petitioners and the learned Senior Counsel appearing for the first respondent. The first Petitioner is the State of Karnataka and the other two Petitioners are the officers of the State Government.
2. The following order was passed by the State of Karnataka on 26th September 2018:
"The proposal of deemed extension of ML No.2293 of M/s. Tiffin's Barytes Asbestos and Paints Limited, is rejected."
3. Tiffin's Barytes Asbestos and Paints Limited is the first respondent herein. What is challenged in this petition under Article 226 of the Constitution of India is the order of the National Company Law Tribunal (for short 'NCLT') dated 3rd May 2019 (Annexure-A). The petitioners are aggrieved by the directions contained in paragraph 31 of the order which reads thus:
"31. In the light of the observations made above, the Respondent Nos. 1 to 3 are directed to execute Supplement Deeds in favour of the Corporate Debtor/Applicant extending the period of the Mining Lease bearing ML No.2293 up to 31.03.2020, in accordance with Sec. 8 A (6) of the M.M.D.R Act, 1957 as amended under the Mines and Minerals (Development and Regulation) Amendment Act, 2015, within a period of two weeks from the date of the receipt of the certified copy of this Order."
(underline supplied) 6 The petitioners are also aggrieved by the finding recorded in paragraph 26 of the said order (Annexure-A) which holds that the order dated 26th September 2018 is null and void and stands set aside.
4. By the order dated 12th August 2018, Corporate Insolvency Resolution Process (CIRP) was initiated against the first respondent (Corporate Debtor) and Interim Resolution Professional (IRP) was appointed. The impugned order has been passed on the application made by Resolution Professional before NCLT wherein, he claimed a declaration that the order dated 26th September 2018 is null and void.
5. When this petition came up for consideration on 12th September 2019, this Court stayed the operation of the direction contained in paragraph 31 of the impugned order. Being aggrieved by the said order, the first respondent and others filed Civil Appeal Nos.9170, 9171, 9172 of 2019 before the Apex Court. By the judgment and order dated 3rd December 2019, the said appeals have dismissed. Our attention is invited to paragraph 45 of the said judgment and order whereby, the Apex Court has answered the first question formulated by it. Paragraph 45 reads thus:
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"45. Therefore, in fine, our answer to the first question would be that NCLT did not have jurisdiction to entertain an application against the Government of Karnataka for a direction to execute Supplemental Lease Deeds for the extension of the mining lease. Since NCLT chose to exercise a jurisdiction not vested in it in law, the High Court of Karnataka was justified in entertaining the writ petition, on the basis that NCLT was coram non judice."
(underline supplied)
6. The conclusion drawn by the Apex Court is in paragraph 52 of the said judgment and order which reads thus:
"52. The upshot of the above discussion is that though NCLT and NCLAT would have jurisdiction to enquire into questions of fraud, they would not have jurisdiction to adjudicate upon disputes such as those arising under MMDR Act, 1957 and the rules issued thereunder, especially when the disputes revolve around decisions of statutory or quasi-judicial authorities, which can be corrected only by way of judicial review of administrative action. Hence, the High Court was justified in entertaining the writ petition and we see no reason to interfere with the decision of the High Court. Therefore, the appeals are dismissed. There will be no order as to costs."
(underline supplied)
7. In view of the binding judgment and order dated 3rd December 2019 of the Apex Court, the finding recorded by NCLT in paragraph 26 of the impugned judgment and order that the order dated 26th September 2018 passed by the petitioners is null and void and stands set aside, cannot be sustained and the said finding will have to be set aside. In view of the findings rendered by the Apex Court which we have reproduced above, the direction 8 issued by NCLT under the impugned order will have to be held as illegal and the impugned order will have to be set aside.
8. The learned Senior Counsel appearing for the first respondent states that in view of the above decision and as a result of setting aside the impugned order, the order dated 26th September 2018 will stand revived and therefore, the remedy of the first respondent to challenge the said order be kept open.
9. In view of the findings recorded by the Apex Court and in view of what we have held above, the order dated 26th September 2018 (Annexure-B) will stand revived. However, we make it clear that the first respondent can always challenge the said order by taking recourse to the remedies which are available in law.
10. Accordingly, we pass the following order:
(i) The impugned judgment and order dated 3rd May 2019 passed by NCLT (Annexure-A) on Misc.
Application No.632/2018 is hereby quashed and set aside and Misc. Application No.632/2018 stands dismissed accordingly;
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(ii) As a result of the aforesaid order, the Government order dated 26th September 2018 stands revived. As observed earlier, it will be open for the first respondent to challenge the said order by taking recourse to the remedies available in law;
(iii) The writ petition is allowed on above terms.
Sd/-
CHIEF JUSTICE Sd/-
JUDGE SN