9911796707
TMI Blog2020 (6) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 dated 24.03.2020, this Tribunal confines itself only to a careful reading of the Notification and the provisions under which it has been issued, and find that the provision under which the Notification had been issued do not expressly confer any power on the delegate to issue the Notification making it retrospective in its operation nor any necessary intendment can also be gathered therefrom, however, laudable as sought to be given colour off by the Applicant/ Corporate Debtor. Thus, it is not necessary for this Tribunal to exercise itself upon the nature of right which had accrued i.e., 'vested' or 'conditional' in the absence of any express power granted which can be gathered from the statute itself, namely I B Code, 2016 to the delegate to make the Notification dated 24.03.2020 to be applied retrospectively. Pecuniary limit which is required to be applied in relation to the main C.P. - HELD THAT: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R Process) under Section 9 of the Insolvency and Bankruptcy code, 2016 (I B code, 2016). 2. The trigger for moving this Application to recall the Order passed by this Tribunal on 05.05.2020 in the main Company Petition IBA/1031/2019 seems to be a Notification dated 24.03.2020 issued by the Central Government under Section 4 of the I B Code, 2016, wherein the minimum threshold limit which hitherto (i.e) prior to 24.03.2020 was ₹ 1 Lakh for maintaining a Petition before this Tribunal has been increased to ₹ 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 ₹ 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, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... publication of notification by the Central Government on 24.03.2020 in the Gazette of India, this Tribunal should have desisted itself in passing the Order for admission on 05.05.2020, namely the date of pronouncement of Order as by then the Notification in relation to enhancement of the pecuniary limit has become applicable much prior to the date of Order. It is also projected by the Learned Counsel for the Applicant/ Corporate Debtor that no vested rights 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 Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ESTED RIGHT' IT CAN BE TAKEN AWAY EXPRESSLY OR BY NECESSARY IMPLICATION: Dahiben v. Vasanji Kevalbhai [(1995) Supp. (2) SCC 295 (IV) RELEVANT DATE FOR RECKONING THE PECUNIARY JURISDICTION IS THE DATE OF ADMISSION AND NOT FILING: CoC of Essar Steel Ltd v. Sathish Kumar Gupta, (2019) SCC Online SC 1478). 13. In opposition to the submissions made by the Learned Counsel for the Applicant/ Corporate Debtor, the Respondent/ Operational Creditor submits that at the time when the Company Petition was filed before this Tribunal, the threshold limit fixed under Section 4 of the I B Code, 2016 was to the extent of ₹ 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, suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the process of being sanctioned by an NBFC and states that in the event the same fructifies and the Operational Creditor is settled in full to the extent of ₹ 21,00,000/- the same would be brought to the notice of this Hon'ble Tribunal prior to any orders being passed. This Hon'ble Tribunal is pleased to reserve Orders in the above application 14. From the above list of dates and events which is pointed out by the Learned Counsel for the Respondent/ Operational Creditor it is seen that the matter was finally heard by this Tribunal on 04.03.2020 and was reserved for orders on the said date. However, the Notification which was issued by the Central Government was published in the official gazette by the Central Government through Ministry of Corporate Affairs only on 24.03.2020, much after the matter was heard and reserved. 15. 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 sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is available under the Statute for such an exercise by the delegate. 19. Parties have also filed Written Submissions along with list of citations on which they seek to rely. 20. This Application seeking for recall/review of the Order dated 05.05.2020 admitting the main CP and thereby initiating the CIR Process in relation to the Corporate Debtor is bound to fail as by now it has become trite by virtue of judicial pronouncements by this Tribunal as well as the Appellate Tribunal, both being creatures of statute, namely Companies Act, 2013 that unless the said statute specifically provides under which it was created for exercise of such a power, the power of review or recall of its own order is not available. 21. The decision rendered by the Hon'ble Supreme Court in Swiss Ribbons (supra) as cited by the Applicant/ Corporate Debtor, may not have application to the instant case on hand, as it is limited to serve the ends of justice 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed by this Tribunal and the remedy if at all available to the Applicant/ Corporate Debtor is to approach the Appellate Tribunal under Section 61 of the I B Code, 2016. The Hon'ble High Court of Madras, being fully conscious of the position of law, had while holding the Civil Revision Petition filed before it by the Applicant in CRP SR No.40137/2020 as not maintainable, has observed the following at paragraph No.5 of the Order dated 13.05.2020: 5 In these circumstances, we are not inclined to entertain the present civil revision petition and we leave it free for the petitioner to approach the National Company Law Tribunal itself or the Appellate Tribunal, as the case may be, for raising the said issue. The amendment Notification dated 24.3.2020 depends upon the facts of the case and unless this issue is first adjudicated by the Tribunal below, this court cannot decide such abstract questions in writ jurisdiction. Therefore, we find that 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is presently concerned. Thus, if the argument of the Applicant of the retrospectivity/retroactivity is taken at face value, all the Applications filed under Sections 7, 9 and 10 of the I B Code, 2016 and which are pending before this Tribunal for adjudication from the date of inception of I B Code, 2016 namely 01.12.2016 till 24.03.2020 is required to be dismissed for lack of pecuniary jurisdiction, thereby effectively unsuiting the respective Petitioners/ Claimants whose claim amount falls within the range of ₹ 1 Lakh to an amount lesser than ₹ 1 Crore. In the absence of I B Code, 2016 granting such a power to the delegatee to make such a retrospective/ retroactive application, can the delegatee exercise such a power thereby virtually effacing at one stroke the hitherto filed Applications falling within the range of ₹ 1 Lakh and the now enhanced limit of ₹ 1 Crore? 26. Before answering the above issue, it is required to notice that a power similar 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 Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eventuality if the satisfaction regarding the existence of condition precedent to the exercise of such power depends upon pure subjective satisfaction of the delegate; and (3) the exercise of conditional legislation would depend upon satisfaction of the delegate on objective facts placed by one class of persons seeking benefit of such an exercise with a view to deprive the rival class of persons who otherwise might have already got statutory benefits under the Act and who are likely to lose the existing benefit because of exercise of such a power by the delegate It was held that in first two categories of cases hearing the parties is not obligatory, however, in cases falling in the third category opportunity must be given to other class of persons to submit their material in rebuttal thereof submitted by the first party. In our opinion, the facts of the present case would fall in the second categories of the above referred to, where power to partially withdraw the applicability of the Act 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1993, as the said power exercised thereof being similar to the one granted to Central Government under the proviso to Section 4 of the I B Code, 2016 and exercised presently. However, in this connection, it is pertinent to note that Government of India through Ministry of Finance (Department of Financial Services) after the decision of Kirti Kapoor's case, had issued a subsequent clarification dated 01.08.2019 about its applicability referring to the above cited judgement of Hon'ble High Court of Rajasthan rendered in Kirti Kapoor's case taking note of the same, at paragraph 4, of the clarification as follows: 4. It is hereby clarified that the cases having suit value between ₹ 10 Lakh and ₹ 20 Lakhs, which have been filed before the DRTs during the stay period (i.e.) from 26.09.2018 to 30.06.2019 may continue in DRTs till conclusion so that no prejudice shall be caused to parties who have filed such suits in good faith. Cases filed on or after 01.07.2019, may be transferred to the civil courts 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, Article 246 of the Constitution confers a plenary power of legislation subject to the limitations mentioned therein and in other provisions of the Constitution in respect of appropriate entries in the Seventh Schedule. This Court, in Union of India v. Madan Gopal Kabra held that the legislature can always legislate retrospectively, unless there is any prohibition under the Constitution which has created it. But the same rule cannot obviously be applied to the Central Government exercising delegated legislative power, for the scope of their power is not coextensive with that of Parliament. This distinction is clearly brought out by the learned Judges of the Allahabad High Court in Modi Food Products Ltd. v. Commissioner of Sales Tax, U.P. wherein the learned Judges observed: A legislature can certainly give retrospective effect to pieces of legislation passed by it but an executive Government exercising subordinate and delegated legislative powers, cannot make legislation retrospective in effect unless that power is expressly conferred. 31. The judgments relied on by the Applicant it must be noted predominantly deals with the Legislative competence to enact a law having ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with by the Tribunal as an application for initiation of corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 Provided further that only such proceedings relating to cases other than winding up, for which orders [or allowing or otherwise of the proceedings are not reserved by the High Courts shall be transferred to the Tribunal: Provided also that - (i) all proceedings under the Companies Act, 1956 other than the cases relating to winding up of companies that are reserved for orders for allowing or otherwise such proceedings; or ii the proceedings relating to winding up of companies which have not been transferred from the High Courts; shall be dealt with in accordance with provisions of the Companies Act, 1956 and the Companies (Court) Provided also that proceedings relating to cases of voluntary winding up of a company where notice of the resolution by advertisement has been given under sub-section (1) of section 485 of the Companies Act, 1956 but the company has not been dissolved before the 1st April, 2017 shall continue to be dealt with in accordance with provisions of the Companies Act, 1956 and the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.l Crore. Enhancement of pecuniary limits in order to entertain Suits by Civil Courts by virtue of the power granted to the State has been exercised from time to time by the Executive keeping in mind the existing state of affairs prevalent in the State including economical. In the matter of Ramamirtham, Sole Proprietor v. Rama Film Service AIR 1951 Mad 93, (1951) 11MLJ 121, in the year 1950 rendered by the Hon ble High Court of Madras while dealing with the law to be applied to pending proceedings before courts has stated as follows at paragraph 16 of the said judgement which is extracted as under: 16. It was also argued that a suitor had a vested right to have the suit validly instituted in a competent jurisdiction, to have it tried disposed of in that Ct. that any subsequent legislation or notification issued in pursuance of a power conferred by a statute could not defeat that right nor take away the jurisdiction of that Ct. to try dispose of the suits. No exception can be taken to the proposition authority in support of it is to be found in the judgment of the F. C. in Venugopala u Krishnaswami, A.I.R. (80) 1943 F. C. 24 : (1. L. R. (1943) Kar. p. c 21) particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iah Choudhry and Ors. [13], wherein it was held thus: '23...(iv) The right of appeal is a vested right and such a right to enter the superior court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. (v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise. 25. In construing the articles of the Constitution we must bear in mind certain cardinal rules of construction. It has been said in Hough v. Windus [1884] 12 Q.B.D. 224, that statutes should be interpreted, if possible, so as to respect vested right. The golden rule of construction is that, in the absence of anything in the enactment to show that it is to have retrospective operation, it cannot be so constructed as to have the effect of altering the law applicable to a claim in litigation at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by necessary implication. 27. In K.S. Paripooman vs. State of Kerala others AIR 1995 SC 1012, this Court while considering the effect of amendment in the Land Acquisition Act in pending proceedings held thus: 67. In the instant case we are concerned with the application of the provisions of sub-section 1 (1-A) of S. 23 as introduced by the Amending Act to acquisition proceedings which were pending on the date of commencement of the Amending Act. In relation to pending proceedings, the approach of the courts in England is that the same are unaffected by the changers in the law so far as they relate to the determination of the substantive rights and in the absence of a clear indication of a contrary intention in an amending enactment, the substantive rights of the parties to an action fall to be determined by the law as it existed when the action was commenced and this is so whether the law is change before the hearing of the case at the first instance or while an appeal is pending (See Halsbury s Laws of England, 4th Edn., Vol. 44, para 922). 28. From the aforesaid decisions the legal position that emerges is that when a repeal of an enactment is followed by a f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
