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2019 (1) TMI 2002 - AT - Insolvency and BankruptcySanctioned Modified Draft Revival Scheme for the Respondent Company - matter remained pending on abolition of BIFR by Sick Industrial Companies (Special Provisions) Repeal Act, 2003 - HELD THAT - The Notification dated 24th May, 2017 issued by the Central Government was referred before this Appellate Tribunal in M/s. Spartek Ceramics India Ltd. Vs. Union of India Ors 2018 (6) TMI 350 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI wherein this Appellate Tribunal held that the case before the Adjudicating Authority was not maintainable and the Notification dated 24th May, 2017 was illegal as it travels beyond the scope of the removal of difficulties provisions under the Insolvency Bankruptcy Code. The decision of this Appellate Tribunal in M/s. Spartek Ceramics India Ltd. was challenged before the Hon ble Supreme Court in Civil Appeal Nos.7291-7292 of 2018 2018 (10) TMI 1660 - SUPREME COURT . The Hon ble Supreme Court upheld the decision of this Appellate Tribunal and held that the Notification dated 24th May, 2017 was illegal as it travels beyond the scope of the removal of difficulties provisions under the Insolvency Bankruptcy Code. The impugned order is set aside - application not maintainable.
Issues:
1. Validity of the Modified Draft Revival Scheme sanctioned by BIFR. 2. Impact of the repeal of Sick Industrial Companies (Special Provisions) Act, 1985 on pending matters. 3. Interpretation of the Insolvency and Bankruptcy Code in relation to schemes sanctioned under the repealed Act. 4. Maintainability of the application before the Adjudicating Authority. 5. Legal implications of the Notification dated 24th May, 2017. 6. Jurisdiction of the Appellate Tribunal in light of previous judgments. Issue 1: Validity of the Modified Draft Revival Scheme: The Respondent company filed a petition before BIFR, which sanctioned the 'Modified Draft Revival Scheme.' However, subsequent developments due to the repeal of the Sick Industrial Companies Act led to legal challenges and uncertainties regarding the scheme's validity. Issue 2: Impact of Act Repeal: The repeal of the Sick Industrial Companies Act left matters pending, causing confusion regarding the legal status of schemes sanctioned under the old Act. The Central Government's Notification dated 24th May, 2017, aimed to address these difficulties by deeming such schemes as approved resolution plans under the Insolvency and Bankruptcy Code. Issue 3: Interpretation of Insolvency Code: The Notification of 2017 raised questions about the application of the Insolvency and Bankruptcy Code to schemes approved under the previous legislation. The Appellate Tribunal's decision in a related case clarified that the Notification exceeded the Code's scope, leading to legal challenges and subsequent rulings by higher courts. Issue 4: Maintainability of Application: The Appellant contested the maintainability of the application before the Adjudicating Authority, arguing that it was not valid under the new legal framework. The Authority's decision was challenged, leading to a review by the Appellate Tribunal. Issue 5: Legal Implications of Notification: The Notification's legal implications were scrutinized in light of the Insolvency and Bankruptcy Code, with the Appellate Tribunal and subsequently the Supreme Court ruling on its validity and scope. The decisions provided clarity on the legal standing of schemes sanctioned under the previous legislation. Issue 6: Jurisdiction of the Appellate Tribunal: Based on previous judgments and legal precedents, the Appellate Tribunal set aside the Adjudicating Authority's order, citing lack of jurisdiction. The Tribunal emphasized that the Respondent could seek appropriate relief from the relevant forum unaffected by its decision. Overall, the judgment addressed complex legal issues arising from the transition between old and new legislation, providing clarity on the status of schemes sanctioned under the repealed Act and the applicability of the Insolvency and Bankruptcy Code. The rulings underscored the importance of legal precision and adherence to procedural requirements in such transitional scenarios.
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