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TMI Blog2019 (1) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 3rd July, 2018, passed by the Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, Kolkata, whereby and whereunder, the application preferred by the Respondent- 'State Bank of India' under Section 7 of the Insolvency and Bankruptcy Code, 2016 ('I&B Code' for short) has been admitted. 2. Learned counsel appearing on behalf of the Appellant submitted that the 'Banking Regulation Act, 1949' has been amended w.e.f. May, 2017, to empower Reserve Bank of India to issue directions to initiate insolvency resolution process in respect of a 'default' under the provisions of the 'I&B Code'. 3. It was submitted that Section 35AA of the 'Banking Regulation Act, 1949', empowers the Central Government to authorize Reserve Bank of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r viable resolution plan in terms of Clause 4. The details of such resolution framework was to be "released in the coming days" in terms of Clause 6. iii. On 12th February, 2018:- The revised framework for other non-performing accounts was published to substitute the existing guidelines with the harmonized and simplified generic framework for resolution of stressed assets. The timelines for large account to be referred under 'I&B Code' was also provided. Accounts with aggregate exposure at Rs. 20 billion and above dealt with timelines mentioned in clause 8 to 11. For other accounts with aggregate exposure below 20 billion and above 1 billion Reserve Bank of India intended to announce over a two-year period reference dates for implementing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18, and was required to wait for the publication of the revised framework in terms of Clause 6 thereof. Further, according to him, since pursuant to circular dated 12th February, 2018 two-years period have been provided for issuance of reference dates in respect of the category of the Appellant, the State Bank of India should have waited for two years. 8. According to learned counsel for the Appellant, as the State Bank of India was bound by the direction of the Reserve Bank of India and is required to follow the statutory mandate, the application under Section 7 as preferred by the State Bank of India was not maintainable which otherwise will defeat the guidelines issued by the Reserve Bank of India. 9. Learned counsel appearing on behal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ptcy Code, 2016. 35AB.− Power of Reserve Bank to issue directions in respect of stressed assets.− (1) Without prejudice to the provisions of section 35A, the Reserve Bank may, from time to time, issue directions to the banking companies for resolution of stressed assets. (2) The Reserve Bank may specify one or more authorities or committees with such members as the Reserve Bank may appoint or approve for appointment to advise banking companies on resolution of stresses assets." 13. On 22nd May, 2017, the 'Reserve Bank of India' outlined the action plan to implement the Banking Regulation (Amendment) Ordinance, 2017'. On promulgation of the Ordinance, the Reserve Bank of India issued a directive bringing the following cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication under Section 7 by the State Bank of India. Therefore, the said Circular is not applicable in the present case. 15. The directions of the Reserve Bank of India also suggest that the Reserve Bank of India never intended to interfere with the statutory remedy of resolution process under the 'I&B Code'. Those Circulars also cannot override the provisions of the 'I&B Code'. 16. The right of the Creditors under the 'I&B Code' for initiation of 'Corporate Insolvency Resolution Process' is a statutory right. The 'I&B Code' is a special enactment passed by the legislature and is a complete Code in itself. The Adjudicating Authority needs only to be satisfied of the existence of a debt and default if any. Once the Adjudicating Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X
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