9911796707
Advanced Search 
TMI Blog2020 (6) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1 Lakh for maintaining a Petition before this Tribunal has been increased to Rs. 1 Crore on and from the said date. 3. The Applicant/ Corporate Debtor states that since the amount of claim as made by the Respondent/ Operational Creditor before this Tribunal seeking for initiation of CIR Process as against the Applicant/ Corporate Debtor based on which the Petition was admitted falls below the threshold limit of Rs. 1 Crore and in the said circumstance, this Tribunal is required to recall the order passed by this Tribunal admitting the Petition, and further, it also requires to dismiss the Petition as not maintainable as filed by the Respondent / Operational Creditor. 4. Upon notice being given to the Respondent /Operational Creditor, the Respondent / Operational Creditor entered appearance through its Counsel and also filed its Counter to the Application as filed by the Applicant/ Corporate Debtor. 5. The main contention which is projected by the Respondent/ Operational Creditor in its Counter is that this Tribunal does not have power either to recall or review the Order which was passed on merits. It is further contended by the Respondent/ Operational Creditor that neither ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accrues to the main Petitioner viz. Operational Creditor to maintain the Petition before this Tribunal, since the pecuniary jurisdiction as prescribed earlier and which got enhanced by virtue of Notification dated 24.03.2020 is to be made applicable retrospectively and in this connection the Learned Counsel for the Applicant/ Corporate Debtor points out the announcement made by the Hon'ble Finance Minister (FM) taking into account the extraordinary circumstance which cropped up in the country due to COVID-19 and consequent slow down in economy being the main intendment for the enhancement and which can be gathered therefrom. 9. Further, the Learned Counsel for the Applicant/ Corporate Debtor seeks to rely upon the Committee report submitted by Insolvency Law Committee dated 20.02.2020 to buttress his arguments that even though no specific date has been given as to when the Notification is applicable, however, in addition to the Hon'ble FM's speech the intendment of the Notification is that the same to be made applicable retrospectively. 10. Further, it is also argued that the material date to reckon the Pecuniary Jurisdiction to entertain the Petition is not the date of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before this Tribunal, the threshold limit fixed under Section 4 of the I&B Code, 2016 was to the extent of Rs. 1 Lakh and since the claim as made by the Respondent/ Operational Creditor was well above the said threshold limit, the maintainability of the Petition before this Tribunal cannot be questioned. Subsequent Notification as issued by the Central Government by virtue of powers delegated under the statute cannot be of a retrospective effect and be only prospective on and from the date of the said Notification. Even though the Central Government has been granted the power under Section 4 of the I&B Code, 2016 to specify the threshold limit, however, such Notification issued enhancing the pecuniary jurisdiction cannot seek to deprive the rights which have already accrued to the Respondent/ Operational Creditor when the proceedings were initiated before this Tribunal after due compliance with the conditions prevalent on the date of default and subsequently as laid down by the statute upon the Respondent/ Operational Creditor. It is further pointed out by the Learned Counsel for the Respondent/ Operational Creditor that the 'default' which is the issue before this Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Learned Counsel for the Respondent/ Operational Creditor seeks to rely on the following judgment in relation to lay emphasis on the point that where the power has been delegated to an Authority by the legislature and in exercise of such delegation, the delegate seeks to notify and under such circumstance the same can have effect only prospectively and not retrospectively. i) Dr. Indramani Pyarelal Gupta v. W.R. Nath (AIR 1963 SC274) ii) Bakul Cashew Co. vs. Sates Tax Officer Quilon (1986 2 SCC 365) 16. In addition, the Learned Counsel for the Respondent/ Operational Creditor also seeks to rely on the following judgments passed by the Hon'ble NCLAT as well as by this Tribunal from time to time holding that the power to review/ recall of the Order is not available under Section 420 of the Act and that a cursory reading of Section 420 of the Act shows that no such power as contemplated is available and hence this Tribunal under the circumstances cannot have jurisdiction to pass an order on the Application as filed by the Applicant/ Corporate Debtor. i) Hon'ble NCLAT - Amod Amladi v. Sayali Rane (Order dt. 30.11.2017 in Company Appeal 295 of 2017} ii) Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stice only in relation to the circumstances stated thereunder where, in the absence of any specific provision available in I&B Code, 2016 allowing the parties to settle and have the Petition withdrawn in case of Committee of Creditors (CoC) is yet to be constituted, under such exceptional circumstances, if an Application is made seeking for withdrawal, this Tribunal/ Appellate Tribunal can exercise the inherent powers available under Rule 11 of NCLT/NCLAT Rules, 2016, depending on the facts of each case. However, the said ratio laid down by the Hon'ble Supreme Court in relation to Rule 11 of NCLT Rules, 2016 cannot be made applicable to the instant case on hand, in the absence of any express power being vested on the Tribunal under the statute constituting it for a review/ recall of its own final order passed by it. Swiss Ribbons case, at the cost of repetition was not dealing with such a situation at all. 22. In relation to the other case cited across the Bar by Learned Counsel for the Applicant/ Corporate Debtor namely NUI Pulp and Paper Industries (supra), it has to be seen that the exercise of Rule 1 1 of the NCLT Rules, 2016 was called for to afford interim protection to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the present civil revision petition is not maintainable at this stage." Thus, the observations made by the Hon'ble High Court of Madras while holding that CRP SR No.40137/2020 as not maintainable, is that the issue of Notification dated 24.03.2020 enhancing the pecuniary limit by the Central Government through Ministry of Corporate Affairs has not been taken into consideration while passing the Order on 05.05.2020. The reason for not dealing with the Notification in the order dated 05.05.2020 passed by this Tribunal is firstly because in view of the well affirmed legal position by way of judicial pronouncements over the years by the Hon'ble Apex Court in several of its decisions, a few of which have also been cited before this Tribunal by the Counsel for Respondent/ Operational Creditor as given in the earlier portion of this Order in relation to the prospective effect of the applicability of a Notification issued by the delegatee (Central Government) under the Statute itself and secondly due to the reason that prior to the pronouncement of the impugned Order on 05.05.2020, no issue was ever raised questioning the jurisdiction of this Tribunal by any of the parties to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to that as available to the Central Government under Section 4 of the I&B Code, 2016 in relation to fixing the pecuniary limits was sought to be exercised by the Central Government through the Ministry of Finance (Department of Financial Services) by way of a Notification dated 06.09.2018 under Sub-section (4) of Section 1 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDB&FI Act for brevity) raising the threshold pecuniary limit therein of Rs. 10 Lakhs as was prevalent then to Rs. 20 Lakhs, for filing an Application for recovery of debts in the Debt Recovery Tribunal (DRT) by Banks and Financial Institutions and when a challenge was mounted to the said Notification dated 06.09.2018, it was held in the case of Kirti Kapoor v. Union of India in Civil Writ Petition No. 21860/2018 vide judgement dated 01.07.2019, by the Division Bench of High Court for Rajasthan, Bench at Jaipur, after considering the provisions of the relevant Sections under RDDB&FI Act, 1993 as well referring and considering several authorities in relation to the same, that the nature of power exercised by the Central Government pursuant to the power granted by the Legislature under Sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of 1993 to a given set of cases or to a given class of persons who are otherwise admittedly governed by the Act, viz., the recovery case in the segment of ten to twenty lakh rupees. When such a power by way of conditional legislation is to be exercised by the delegate a question may arise as to how the said power can be exercised. In such an eventuality if the satisfaction regarding the existence of condition precedent to the exercise of such power depends upon pure subjective satisfaction of the delegate. " 27. Thus, from the decision rendered by the Hon'ble High Court of Rajasthan, it can be discerned that the power (namely, enhancement of pecuniary jurisdiction) can be exercised in relation to a parent legislation which has already come into force and as to whether it is to be partially withdrawn from operation in a given area or in given cases so as not to be applicable to a given class of persons who are otherwise admittedly governed by the Act and further goes on to hold that the Government being the delegate under the RDDB&FI Act, 1993 was justified in enhancing the limit to Rs. 20 Lakh (Rupees Twenty Lakhs only) from the then existing limit of Rs. 10 Lakhs (Rupees Te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by all the DRTs. Thus by way of clarification issued by the Central Government through the concerned Ministry, it had clearly brought into focus that the Notification dated 06.09.2018 is to apply only prospectively and had gone further to the extent of saving the cases filed between 26.09.2018 to 30.06.2019 when a stay was granted in Kirti Kapoor's case in relation to the operation of the impugned Notification which was in vogue between the relevant dates. 29. Apropos to the case on hand, from a careful perusal of the Notification issued by the Central Government through Ministry of Corporate Affairs dated 24.03.2020 annexed with the typed set to the Application, the date from which the effect is to be given to the Notification has not been spelt out therein. In the absence of any date being specified in the Notification as to its applicability, Learned Counsel for the Applicant/ Corporate Debtor submits that the intention of the delegate can be ascertained from the report of ILC dated 20.02.2020 seeking an enhanced pecuniary limit as well as the press reports of the Hon'ble Finance Minister made in relation to COVID- 19 prompting the Central Government to notify the enha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed." 31. The judgments relied on by the Applicant it must be noted predominantly deals with the Legislative competence to enact a law having retrospective application as in the case of Essar Steel Limited (supra). Further in relation to Forech India Ltd (supra) upon which heavy reliance was placed in relation to quested right' and the power of the Central Government to transfer the winding up petitions in particular, apart from other Petitions as specified under Section 434 of the Companies Act, 2013, it is required to be noted that the Legislature had chosen to grant to the delegate, namely the Central Government to transfer even the pending proceedings before the High Courts to this Tribunal and by virtue of the express power granted, winding up petitions as well other petitions stated there under, namely Section 434 of the Companies Act, 2013 and by virtue of Notifications issued thereunder have been transferred. However, even in relation to the same, namely Petitions that are to be transferred, it is required to be noticed that an exception has been carved out in as much as in relation to those winding up Petitions or even in relation to other matters in which orders have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all continue to be dealt with in accordance with provisions of the Companies Act, 1956 and the Companies (Court) Rules, 1959 32. Thus by virtue of the exercise of power under Section 434 of the said Act, even though the Petitioners who had filed winding up Petitions and whose cases are to be transferred in accordance with the said provision as well as Notification by the Central Government thereunder, are still left with a forum, namely NCLT to proceed with their claim and while delegating the power to the Central Government, the Legislature had seen to that, those Petitioners thereunder have not been left high and dry, which will be the case in the present instance, if the argument of the Applicant is taken at face value that the Notification dated 24.03.2020 is to be applied retrospectively and to be given a retroactive effect. 33. In view of the stated position of law by the Hon'ble Apex Court as extracted above and since this Tribunal being a creature of statute, does not have the power of judicial review in relation to scrutiny of enactments or even the Rules and Regulations framed thereunder including the Notification as the present one issued by the Central Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la u Krishnaswami, A.I.R. (80) 1943 F. C. 24 : (1. L. R. (1943) Kar. p. c 21) particularly in the judgment of Varadachariar J.--See also C P. Banerjee B. S. Irani, A. 1. R. (36) 1949 Born. 182 : (51 Born. L. R. 122). It is also settled law that when a suit is instituted, it carries with it the implications that the rights of appeal then in force are preserved to it throughout its career unaffected by a subsequent alteration unless the Legislature has expressly abolished the Ct. to which an appeal then lay or has, expressly or by necessary implication, made the legislation retrospective in effect..........." 36. Reiterating the above position of law, the Hon'ble Supreme Court in the matter of Karnai Kaur V. State of Punjab, (2015) 3 SCC 206 at paragraphs 24 to 26 of the said judgement while considering the law which is to be applied when the matters stood reserved for orders has observed as follows after quoting several of its own judgements previously rendered : 24. We have noticed the Gazette of India published by the Ministry of Law and Justice in respect of the "Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect of altering the law applicable to a claim in litigation at the time when the Act was passed [Leeds and County Bank Ltd. v. Walker (1883) 11 Q.B.D. 84; Moon v. Durden (1848) 2 Ex. 22; 76 R.R. 479. The following observation of Rankin C.J. in Sadar Ali v. Dalimuddin (supra) at page 520 is also apposite and helpful : "Unless the contrary can be shown the provision which takes away the jurisdiction is itself subject to the implied saving of the litigant's right. " In Janardan Reddy v. The State [1950] 1 SCR 940 Kania C.J. in deliver in the judgment of the Court observed that our Constitution is generallu speaking prospective in its operation and is not to have retroactive operation in the absence of any express provision to that effect. The same principle was reiterated in Keshavan Madhava Menon V. The State Bombay 1951 CriLJ 680 and finally in Dajisaheb Mane and Others v. Shankar Rao Vithal Rao [1955] 2 SCR 872 to which reference will be made in greater detail hereafter." (emphasis supplied) 26. Further in the case of Shyam Sunder v. Ram Kumar & Anr.[14], the Constitution Bench of this Court held thus: "26. In Hitendra Vishnu Tahkur & ors. vs. State of Maharashtra & oRs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f an enactment is followed by a fresh legislation such legislation does not effect the substantive rights of the parties on the date of suit or adjudication of suit unless such a legislation is retrospective and a court of appeal cannot take into consideration a new law brought into existence after the judgment appealed from has been rendered because the rights of the parties in an appeal are determined under the law in force on the date of suit. However, the position in law would be different in the matters which relate to procedural law but so far as substantive rights of parties are concerned they remain unaffected by the amendment in the enactment. We are, therefore, of the view that where a repeal of provisions of an enactment is followed by fresh legislation by an amending Act such legislation is prospective in operation and does not effect substantive or vested rights of the parties unless made retrospective either expressly or by necessary intendment. We are further of the view that there is a presumption against the retrospective operation of a statue and further a statute is not to be construed to have a greater retrospective operation than its language renders necessary, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
