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2021 (9) TMI 89 - HC - Insolvency and BankruptcyConstitutional validity of some of the provisions of the Insolvency and Bankruptcy Code, 2016 - Government companies to be equated with State or not - Applicability of provisions of the Insolvency Code as not applicable for Government Companies - HELD THAT:- Not only was there a challenge to the constitutional validity of Section 87 of the Arbitration and Conciliation Act, 1996 but a challenge was also there to various provisions of the Insolvency Code. Therefore, the contention of the learned senior counsel for the petitioners that the matter relating to the Insolvency Code was not before the Court, is not correct. The petitioners then argued that Government Bodies other than Government Companies are exempted from the Insolvency Code as they are statutory authorities of the Government Department and, therefore, they cannot be taken before the adjudicating body under the Insolvency Code. On the other hand, the petitioners, who also owes large amount of dues to its Operational Creditors can be taken to the adjudicating authority under the Insolvency Code. Therefore, apart from a challenge to Section 87 of the Arbitration and Conciliation Act, 1996, there was also constitutional challenge to the Insolvency Code. It is not an arm of the State. It is usually performing a commercial or/and business functions. A Government Company cannot be equated with a State authority, like National Highway Authority of India (NHAI), which is performing statutory functions or like other Departments, like Postal, Telegraph or the Railways or Public Works Department. This distinction has been clearly made by the Hon’ble Apex Court in the case of Hindustan Construction Company Limited, [2019 (12) TMI 5 - SUPREME COURT] which is binding upon this Court. Petition dismissed.
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