TMI Blog2021 (2) TMI 1256X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt finds the legal position unassailable that the property dues of KMC carry a statutory flavour and therefore being in the nature of crown debts also do not take precedence over the dues of other classes of secured creditors - application dismissed. - FMA 459 of 2021 With IA No. CAN 1 of 2021 - - - Dated:- 4-2-2021 - HON BLE JUSTICE SUBRATA TALUKDAR AND HON BLE JUSTICE KESANG DOMA BHUTIA For the Appellants : Mr. Ashok Kumar Banerjee Mr. Rajdip Roy Mr. Anindya Sundar Chatterjee For the Respondent No.3 : Mr. Jishnu Chowdhury Mr. Dilwar Khan For the Respondent No.4 : Mr. Rishav Banerjee Mr. Pranay Agarwal Ms. Ankita Baid Subrata Talukdar, J: This appeal arises out of the Judgement and Order dated 29th January 2021 of the Hon ble Single Bench in the writ petition. The appellants are the Kolkata Municipal Corporation (KMC) and its Commissioner. The effective contesting respondents are the Respondent No. 3, Axis Bank Ltd (for short Axis Bank only) and the Respondent No.4, the Resolution Professional (for short RP) representing one M/s. Maximum Agency Private Ltd. (hereinafter referred to as the Corporate Debtor) presently under a Corporate Insolvency Reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngful exercise of available jurisdiction would not be sufficient to invoke the High Court s jurisdiction under Article 226 of the Constitution, the ground of absence of jurisdiction could trigger such invocation. Hence, in view of the nature of challenge involved in the present writ petition, the same is maintainable in law. It is submitted that the Hon ble Single Bench was of the view, as reflected in Paragraph -38 (supra), that the NCLT lacked jurisdiction to pass the Order dated 17th December, 2019 directing the RP to take physical possession of the said immovable asset. It is argued that since NCLT, Kolkata Bench lacked jurisdiction, the writ petition was held to be maintainable by the Hon ble Single Bench and to this aforesaid extent KMC had succeeded in establishing that any action to be taken by the RP apropo the said immovable asset can be the subject matter of challenge in a writ petition. In support of his arguments, Learned Senior Counsel relies heavily upon the Judgement and Order of the Hon ble Apex Court in Civil Appeal (CA) No. 9170 of 2019, In Re: M/s. Embassy Property Developments Private Ltd. Versus State of Karnataka Ors. It is submitted that NCLT h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. Section 231 of the IBC bars the jurisdiction of civil courts in respect of any matter in which the Adjudicating Authority i.e. the NCLT or the NCLAT is empowered by the Code to pass any Order. Section 231 is set out hereinbelow for ready reference : 231. Bar of jurisdiction. No civil court shall have jurisdiction in respect of any matter in which the Adjudicating Authority or the Board is empowered by, or under, this Code to pass any order and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any order passed by such Adjudicating Authority or the Board under this Code. 11. In view of the provisions of the IBC, the High Court ought not to have proceeded with the auction of the property of the Corporate Debtor Respondent No. 4 herein, once the proceedings under the IBC had commenced, and an Order declaring moratorium was passed by the NCLT. The High Court passed the impugned Interim Orders dated 14.08.2019 and 05.09.2019 after the CIRP had commenced in this case. Also relying on the authority of In Re: A Navinchandra Steels Private Ltd. Versus Srei Equipment Finance Ltd. and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particular stage of a winding up proceeding. 14.4. Therefore, what follows as a matter of law is that even post admission of a winding up petition, and after the appointment of a Company Liquidator to take over the assets of a company sought to be wound up, discretion is vested in the Company Court to transfer such petition to the NCLT. The question that arises before us in this case is how is such discretion to be exercised? 25. Given the aforesaid scheme of winding up under Chapter XX of the Companies Act, 2013, it is clear that several stages are contemplated, with the Tribunal retaining the power to control the proceedings in a winding up petition even after it is admitted. Thus, in a winding up proceeding where the petition has not been served in terms of Rule 26 of the Companies (Court) Rules, 1959 at a pre-admission stage, given the beneficial result of the application of the Code, such winding up proceeding is compulsorily transferable to the NCLT to be resolved under the Code. Even post issue of notice and pre admission, the same result would ensue. However, post admission of a winding up petition and after the assets of the company sought to be wound up become ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in recovery of its statutory claims against the debtor, can be the subject matter of a Corporate Resolution Process under the Insolvency and Bankruptcy Code, 2016. It is plainly understandable that while discussing the answer to its second question at Paragraph 32 (supra), the Hon ble Single Bench was pleased to uphold the primacy of the IBC in a Corporate Resolution Process and hence underscored the jurisdiction of the NCLT to direct the RP to take over the said immovable asset of the Corporate Debtor. This Court further finds that apropo the dictum laid down In Re: Action Ispat and Power reported in 2021) 2 SCC 641 as also noticed In Re: A Navinchandra Steels Private Ltd. reported in 2021) 4 SCC 435 (supra) , the appellants have been unable to make out a case that an irreversible position has been carved out by operation of law which would bar the NCLT from taking the Resolution Process forward under the IBC. Last, but not the least, this Court finds the legal position unassailable that the property dues of KMC carry a statutory flavour and therefore being in the nature of crown debts also do not take precedence over the dues of other classes of secured creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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