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2019 (8) TMI 530 - Tri - Insolvency and BankruptcyMaintainability of CIRP application against the Government company - difference of opinion. As per the member judicial:- The Respondent is a Government Company as defined under section 2 (45) of the Companies Act, 2013, wherein 100% of its shares are being held by the President of India. Therefore, if upon filing of an Application under Sections 7, 8 and 9, and the same were to be admitted, recovery proceedings then would be said to have been initiated against the President of India, which cannot be allowed under the procedure of IBC. The State has either tried treating Financially Sick Companies or made sure that dues of the all its Creditors are duly paid.In a Welfare State like India, allowing Insolvency proceedings against an Agency of the Stateis like proceeding against the state itself and the same will set out a wrong precedent - petition dismissed. As per member technical:- If the contentions raised by the Ld. Senior Counsel on behalf of the Corporate Debtor is accepted, it tantamount to the situation where the Public Sector Companies can borrow money left, right and centre or create liabilities and the creditors have to be left in lurch compelling them to approach the civil courts or the writ court for getting relief, where the system is already suffering from docket explosion, which will ultimately hurt the economic interest of the nation and the ease of doing business. The code is a major economic reform undertaken by the Government to overcome the bottleneck in the economic development of the country and the present situation is that the economic activity awaits at the doorsteps of the NCLTs, and hence the spirit of the Code shall not be spoiled by diluting and tinkering the Code. - Application admitted.
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