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TMI Blog2019 (9) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 16.08.2018 - It is clear from the bank s letter dated 23.08.2018 that this proceeding under section 7 of I B Code is initiated against the corporate debtor because there were clear guidelines from the RBI and those contained in its circular dated 12.02.2018. The Hon ble Supreme Court in DHARANI SUGARS AND CHEMICALS LTD. VERSUS UNION OF INDIA ORS. [ 2019 (4) TMI 230 - SUPREME COURT] held RBI circular dated 12.02.2018 to be bad in law and ultra vires. The Apex Court also declared that all proceedings initiated on the basis of that circular are bad in law and non est. As per the case at hand is concerned, it is seen from the evidence on record that this proceeding is also initiated by the bank against the corporate debtor on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2 Notice of this application is duly served. The corporate debtor appeared through one Mr. Samir Mukherjee, Manager (Legal). He filed affidavit-in-reply. Corporate Debtor challenged this proceeding on four grounds: (i) Mr. Bishwatosh Misra, Assistant General Manager Head Office, SBI is not properly authorised to initiate this proceeding under section 7 of I B Code, 2016. (ii) This proceeding is filed on the basis of Reserve Bank of India s circular dated 12.02.2018. Hon ble Supreme Court in case of Dharani Sugars Chemicals Ltd. -v-s-. Union of India Ors held the circular to be bad in law and declared that proceedings under I B Code on the basis of that circular are non est. They are to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the bank. 6. Ld. Sr. Counsel submitted that this proceeding is filed by the State Bank of India on the basis of circular dated 12.02.2018 issued by the RBI. In case of Dharani Sugars Chemicals Ltd. (supra), the Hon ble Apex Court held that the said circular to be ultra vires. Consequently, all actions taken under that circular including this proceeding under I B Code held to be bad in law and non est. 7. As against this, the Ld. Sr. Counsel, Mr. Joy Saha submitted that Corporate Debtor did not really dispute that they are under default in paying huge sum of money through bank towards repayment of their debt. The defences raised by the corporate debtor are not all tenable under law and on facts. He point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be non est. 9. The real point in dispute appears to be whether SBI initiated this proceeding on the basis of RBI circular dated 12.02.2018 or it is independent proceeding. 10. SBI, at their own, did not state anywhere in the application that proceeding is initiated on the basis of and as per the guidelines issued by the RBI in its circular dated 12.02.2018. But the corporate debtor produced on record SBI letter dated 23.08.2018 giving reference of corporate debtor s proposal of resolution of bad debt dated 16.08.2018. While rejecting that proposal, SBI made it clear in para 6 of that letter the following: 6. Further, RFTL s financials do not support any restructuring and no request of rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been proceeded against by financial creditors under section 7 of the Insolvency Code, only because of the operation of the impugned circular will be proceedings which, being faulted at the very inception, are declared to be non est. 13. The Hon ble Supreme Court held RBI circular dated 12.02.2018 to be bad in law and ultra vires. The Apex Court also declared that all proceedings initiated on the basis of that circular are bad in law and non est. As per the case at hand is concerned, it is seen from the evidence on record that this proceeding is also initiated by the bank against the corporate debtor on the basis of RBI Circular dated 12.02.2018. It is held to be not maintainable. I proceed to pass the following order. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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