TMI Blog2021 (12) TMI 1488X X X X Extracts X X X X X X X X Extracts X X X X ..... this Adjudicating Authority for consideration. This Adjudicating Authority had given the above advisory without considering the law laid down by the Hon'ble Supreme Court as it was not brought to the notice of the Adjudicating Authority. So, this order of the Adjudicating Authority cannot be relied on - The sanctioned scheme of rehabilitation dated 07.01.2005 cannot be termed as the Resolution Plan within the meaning of Section 5(26) of the IBC, 2016 - the issue answered in negative. Maintainability of application under Section 33(4) of the IBC, 2016 - HELD THAT:- The sanctioned scheme of rehabilitation is not the Resolution Plan within the meaning of Section 5(26) of the IBC, 2016 - there is no question of the Respondent committing the breach of implementing any of such plan, hence, this application under Section 33(4) of the IBC, 2016 is not maintainable. Even otherwise, the sanctioned scheme under Sick Industrial Companies (Special Provisions) Repeal Act, 2003 cannot be considered as Resolution Plan because the said scheme had not been approved by the Committee of Creditors in terms of sub-section (4) of Section 30 of IBC, 2016 which is the mandate of law - Since the approve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at ....(b) On such date as may be notified by the Central Government in this behalf, any appeal preferred to the Appellate Authority or any reference made or inquiry pending to or before the Board or any proceeding of whatever nature pending before the Appellate Authority or the Board under the Sick Industrial Companies (Special Provisions) Act, 1985 shall stand abated: Provided that a company in respect of which such appeal or reference or inquiry stands abated under this clause may make reference to the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016 within one hundred and eighty days from the commencement of the Insolvency and Bankruptcy Code, 2016 in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016: Provided further that no fees shall be payable for making such reference under Insolvency and Bankruptcy Code, 2016 by a company whose appeal or reference or inquiry stands abated under this clause, . [(Provided also that any scheme sanctioned under sub-section (4) or any scheme under implementation under sub-section (12) of section 18 of the Sick Industrial Companies (Special Provisions) Act, 1985 shall be deemed to be an appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the order of Liquidation of the Respondent, hence, this application is maintainable. 6. As against this, the Learned Senior Counsel Mr. Navin Pahwa for the Respondent submitted that Hon'ble NCLAT in the case of Pr. Director General of Income-tax (Admn. TPS) VS. Spartek Ceramics India Ltd. Anr. in Company Appeal (AT) (Insolvency) Nos. 160 of 2017 has held that the Notification dated 24.05.2017 is not valid, and hence, the amendment carried pursuant to that notification declaring the sanctioned scheme under SICA, 1985 as to be the Resolution Plan does not stand in the Statute Book. Learned Senior Counsel further submitted that the above order of the Hon'ble NCLAT was challenged before the Hon'ble Supreme Court in Civil Appeal Nos. 7291-7292 of 2018 and the Hon'ble Supreme Court approved the findings of the Hon'ble NCLAT that the scheme cannot be the Resolution Plan within the IBC, 2016. 7. Learned Senior Counsel further submitted that since the notification dated 24.05.2017 declared to be void and, hence, the amendment in Section 4 of the SICA, 1985 goes away from the Statute Book, and hence, the scheme under Section 4(b) of Sick Industrial Companies (Special P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - No. II. Whether it can be held that the Respondent has committed the breach of the sanctioned rehabilitation scheme and, hence, liable for order of liquidation under Section 33(4) of the IBC, 2016? Findings - No. Reasons: Point No. 1 10. On 07.01.2005, the AAIFR approved and sanctioned the implementation of DRS dated 08.12.2003. The Respondent did not controvert this fact in clear terms. However, we do not wish to go into any such controversy whether the sanctioned scheme was put for implementation and whether there is a breach of implementation of the scheme? We have only to consider whether the sanctioned scheme can be treated as the Resolution Plan within the meaning of Section 5(26) of the IBC, 2016. Section 5(26) of the IBC, 2016 defines the Resolution Plan as: (26) resolution plan means a plan proposed by[resolution applicant] for insolvency resolution of the corporate debtor as a going concern in accordance with Part II; [Explanation.-For removal of doubts, it is hereby clarified that a resolution plan may include provisions for the restructuring of the corporate debtor, including by way of merger, amalgamation and demerger;] Above definition of the Resolution Plan in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Government invoking its power under Section 242 of the IBC, 2016 can amend Section 4 of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 by issuing notification dated 24.05.2017? The Hon'ble NCLAT has held that ....37. in absence of any ground shown for removing any difficulty in giving effect to the provisions of the 'I B Code' and as the Central Government cannot exercise powers conferred under Section 242 of the 'I B Code' for removing the difficulties arisen due to 'SICA Repeal Act, 2003' or omission of provisions of the 'Companies Act, 2013,' this Appellate Tribunal cannot act pursuant to impugned Notification S.O. 1683 (E) dated 24th may, 2017 to entertain the appeal. The Hon'ble NCLAT further held that ....45. in view of the aforesaid discussion, we find that the grounds shown by the Central Government in Notification S.O. 1683 (E) dated 24th May, 2017 for exercising powers conferred under Section 242 are in conflict with the amended sub-clause (b) of Section 4 of the 'SICA Repeal Act, 2003'. 12. The Hon'ble NCLAT has recorded the above findings after considering the judgment of Hon'ble Delhi H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatute Book. 15. Learned Counsel for the Petitioner submitted that this Adjudicating Authority in its order dated 05.04.2021 in IA No. 115 of 2020 has already held that the Scheme is the Resolution Plan and granted liberty to the Applicant in that proceeding to initiate action under Section 33(4) of the IBC, 2016 against the Respondent herein. However, it is difficult for us to accept the submissions of Learned Counsel for the Petitioner. This Adjudicating Authority had never considered the point whether the notification dated 24.05.2017 is valid or not. The judgment of the Hon'ble NCLAT in the case of Pr. Director General of Income Tax (Admn. TPS) Vs. M/s. Spartek Ceramics India Ltd. Anr. in Company Appeal (AT) (Insolvency) No. 160 of 2017 and further the judgment of the Hon'ble Supreme Court in the case of M/s. Spartek Ceramics India Ltd. Vs. Union of India in Civil Appeal Nos. 7291-7292 of 2018 were never placed before this Adjudicating Authority for consideration. This Adjudicating Authority had given the above advisory without considering the law laid down by the Hon'ble Supreme Court as it was not brought to the notice of the Adjudicating Authority. So, this order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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