TMI Blog2018 (1) TMI 953X X X X Extracts X X X X X X X X Extracts X X X X ..... ieved, where the NCLAT could be approached. In the latter class of cases, there is only one remedy i.e. to approach the NCLAT within a period of 90 days. To this, there could be no quarrel. The broad classification of cases where schemes are sanctioned and not sanctioned is intelligible as both would be governed by the Code including the implementation, supervision and appeals arising therefrom. Thus, there is no discrimination whatsoever. The second proposition that the Petitioner has a ‘legitimate expectation’ does not have any legal basis, inasmuch as the right of the Petitioner to approach the appropriate forum has not been taken away. The Petitioner was provided with the remedy to approach the NCLT within a period of 180 days. In law, there could not be a legitimate expectation to be governed by the repealed enactment when the manifest intention of the Legislature is to completely replace the said enactment with a new insolvency regime. By operation of law, the forum which the Petitioner can approach has been changed and a remedy was thus available to the Petitioner. On a query as to why the Petitioner chose not to approach the NCLT, the response was that the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner, it has settled and paid the restructured amounts of all of its 28 secured lenders, and had obtained no dues certificate from 27 secured lenders. A Draft Rehabilitation Scheme ( hereinafter DRS ) was also circulated by BIFR on 14th September, 2015. The DRS was pending before the BIFR, due to objections from the income tax authorities and some other authorities. On 30th November, 2016 all objections by other authorities were resolved by the BIFR. However, due to the reasons recorded in the BIFR s order dated 30th November, 2016, some further directions were issued and the scheme was not sanctioned. 8. With effect from 1st December, 2017, i.e., one day later, the Repeal Act was enforced, vide Notification dated 25th November, 2016. Due to the said notification, proceedings before the BIFR stood abated and the petitioner could only approach the National Company Law Tribunal ( hereinafter NCLT ) within a period of 180 days. Background of Insolvency and Bankruptcy Code, 2016 9. The Code was enacted in 2016 as Act 31 of 2016 and received Presidential assent on 28th May, 2016. The Repeal Act, 2003 had enacted Sections 4(b) and 5(1)(d). Though the Act wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nies (Special Provisions) Repeal Act, 2003 provides that any scheme sanctioned under sub-section (4) or any scheme under implementation under sub-section (12) of section 18 of the repealed enactment i.e., the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) shall be deemed to be a scheme under implementation under section 424D of the Companies Act, 1956, (1 of 1956) and shall be dealt with in accordance with the provisions contained in Part VIA of the Companies Act, 1956; And, whereas, section 424D of the Companies Act, 1956 provided for review or monitoring of schemes that are sanctioned or are under implementation; And, whereas the Companies Act, 1956 has been repealed are re-enacted as the Companies Act, 2013 (18 of 2013) which, inter alia, provides for scheme of revival and rehabilitation, sanction of scheme, scheme to be binding and for the implementation of scheme under section 261 to 264 of the Companies Act, 2013; And, whereas, sections 253 to 269 of the Companies Act, 2013 have been omitted by Eleventh Schedule to the Insolvency and Bankruptcy Code, 2016; And, whereas, clause (b) of section 4 of the Sick Industrial Companies (Spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expired as on the date of notification of this Act, an appeal against any such deemed approved resolution plan may be preferred by any person before National Company Law Appellate Tribunal within ninety days from the date of publication of this order. Thus, section 4(b), as it finally stands today has four provisos. Petitioner s submissions 11. The grievance of the petitioner is that its scheme, which was pending before BIFR, was at a very advanced stage and was almost on the verge of acceptance, a day prior to the notification of the Repeal Act. The petitioner had taken several steps throughout the lengthy process and had under gone several rounds of proceedings before the BIFR and the Appellate Authority for Industrial Financial Reconstruction (AAIFR), as also in writ petitions, prior to the matter reaching the final stage for approval of the scheme. However, unfortunately, on 30th November, 2016 the scheme was not approved by BIFR, which resulted in the scheme remaining pending and hence abating upon notification of the Repeal Act. 12. The petitioner vehemently urges that the abatement of proceedings, as the scheme was not sanctioned, would result in se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LT under the Code. 16. In Ashapura (supra) , this Court has also held that the differentiation between sick companies where draft schemes have been approved, which are treated as deemed approved resolution plans' under the Code, and such cases where draft schemes have not been approved, and are thus fully covered by the Code, does not fall foul of Article 14. This Court has further held that sick companies whose schemes have been sanctioned form a separate and distinct class and the differentiation made is a valid, germane and realistic classification. It has been further held in Ashapura (supra) that the fixing of the cut-off date as 1st December, 2016 cannot be held to be arbitrary, inasmuch as, for a legislation of this nature there would be a cut-off date and the date on which Eighth Schedule is incorporated into the Code is a valid cut-off date. Whenever a legislation is either repealed or a new enactment is brought into place, a cut-off date has to be prescribed. The mere fixing of the cut-off date does not make the same illegal or arbitrary. While reiterating the findings in Ashapura (supra) , we examine the additional submissions made by the Petitioner in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he view expressed in Nogendra Nath Bose v. Mon Mohan Singha Roy AIR 1931 Cal 100 , which also held that a right to appeal cannot be taken away in the absence of a express enactment . Moreover, as held in British Bank of India Vs. CIT [2004] (1) Mh.L.J.297 , there is no inherent right of appeal and it has to be specifically conferred by the statute. 20. A Constitution Bench of the Supreme Court in Garikapati Veeraya (supra) summarized the legal position as under:- From the decisions cited above the following principles clearly emerge : ( i) That the legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding. ( ii) The right of appeal is not a mere matter of procedure but is a substantive right. ( iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties there to till the rest of the carrier of the suit. ( iv) The right of appeal is a vested right and such a right to enter the superior Court accrues to the litigant and exists as on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l position on this issue has been settled by the Supreme Court in State of Rajasthan Vs. Mangilal Pindwal AIR 1996 SC 2181 wherein the Court quoted with approval the following passage on Craies on Statute Law' When an Act of Parliament is repealed, said Lord Tenterden in Surtees v. Ellison, it must be considered (except as to transactions past and closed) as if it had never existed. That is the general rule. Tindal C.J. stated the exception more widely. He said : The effect of repealing a statute is to obliterate it as completely from the records of the Parliament as if it had never been passed; and it must be considered as a law that never existed except for the purpose of those actions which were commenced, prosecuted and concluded whilst it was an existing law. It is the clear view of this Court that once a law is repealed and a new legislation has been put in its place, it is not open for anyone to contend that it should be continued to be governed by the old enactment, except where actions under the existing laws had concluded. The applicability of the repealed legislation is only to the extent as provided in the Savings clause and nothing more. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was provided with the remedy to approach the NCLT within a period of 180 days. In law, there could not be a legitimate expectation to be governed by the repealed enactment when the manifest intention of the Legislature is to completely replace the said enactment with a new insolvency regime. By operation of law, the forum which the Petitioner can approach has been changed and a remedy was thus available to the Petitioner. On a query as to why the Petitioner chose not to approach the NCLT, the response was that the Petitioner wanted to be governed by the repealed Act, i.e., SICA and not in accordance with the Code as provided for under Section 4(b). Such a submission lacks any legal basis and is liable to be rejected. 28. Insofar as Twenty First Century Steels (supra) is concerned, the same is an order recording the submissions of the parties and neither party has placed before us any document to show that any new remedy not contemplated under the Code was in fact provided to the Petitioner therein. In the absence of the same, the said order does not assist the Petitioner in any manner. 29. In these circumstances, the validity of Section 4(b) is upheld and the writ petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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