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TMI Blog2022 (12) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... s binding on all under Article 141 of the Constitution of India. The judgment of the Adjudicating Authority impugned in the present Appeal follows the judgment of the Hon ble Supreme Court in M/s Spartek Ceramics India Ltd. vs. Union of India Ors. [ 2018 (10) TMI 1660 - SUPREME COURT ] When the Notification dated 24.05.2017, is not a valid Notification, there is no occasion to accept the submission that approved Rehabilitation Scheme dated 07.01.2005, which is foundation of the Application filed by the Appellant under Sections 33 read with Section 34 can be treated as a Resolution Plan within the meaning of IB Code. The very foundation of the Application filed by the Appellant under Sections 33 and 34 having been knocked out, the Application was rightly rejected by the Adjudicating Authority. No error has been committed by the Adjudicating Authority in rejecting Application filed by the Appellant under Sections 33 and 34. There is no merit in the Appeal. - Company Appeal (AT) (Insolvency) No. 312 of 2022 - - - Dated:- 12-12-2022 - [ Justice Ashok Bhushan ] Chairperson , [ Dr. Alok Srivastava ] Member ( Technical ) And [ Barun Mitra ] Member ( Technical ) For t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding No. II. Whether it can be held that the Respondent has committed the breach of the sanctioned rehabilitation scheme and, hence, liable for order of liquidation under Section 33(4) of the IBC, 2016? Findings-No. (iv) After hearing the parties, Adjudicating Authority vide its order dated 22.12.2021 rejected the Application filed by the Appellant under Section 33. The Adjudicating Authority came to the conclusion that Sanctioned Scheme of Rehabilitation dated 07.01.2005 cannot be termed as Resolution Plan within the meaning of Section 5(26) of the IB Code. It was further held that Rehabilitation Scheme not being Resolution Plan, there is no question of Respondent committing breach of implementation of the Plan, hence, Application under Section 33 of the IB Code is not a maintainable. (v) Aggrieved by the order dated 22.12.2021, this Appeal has been filed by the Appellant. 3. Shri Pankaj Jain, learned Counsel appearing for the Appellant challenging the impugned order submits that the (Removal of Difficulties) Order, 2017 dated 25.11.2016 could not have been set aside by National Company Law Tribunal nor actually it has been set aside by National Company Law Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that Notification dated 24.05.2017 travels beyond the scope of the removal of difficulties provisions, which finding has been approved by the Hon ble Supreme Court in its judgment dated 25.10.2018. Hence, the reliance on the said Notification for holding approved Rehabilitation Scheme as Resolution Plan is wholly erroneous and no Application on the basis of approved Rehabilitation Scheme can be filed under Sections 33 and 34 and Adjudicating Authority further considering all aspect of the matter and after hearing the parties has rightly rejected the Application field by the Appellant. The learned Counsel for the Respondent further submits that this Tribunal in its judgment dated 29.01.2019 in Company Appeal (AT) (Insolvency) no.294 of 2018 Gail (India) Ltd. vs. M/s. Neycer India Ltd. had already taken a view relying on judgment of the Hon ble Supreme Court in M/s. Spartek Ceramics India Ltd. that Notification dated 24.05.2017 is illegal and travels beyond the scope of removal of difficulties order. It is further submitted that the rehabilitation scheme has been fully implemented and for implementation of the scheme Rajasthan High Court has appointed Justice N.N. Mathur, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trial Companies (Special Provisions) Act, 1985 shall be deemed to be an approved resolution plan under sub-section (1) of section 31 of the Insolvency and Bankruptcy Code, 2016 and the same shall be dealt with, in accordance with the provisions of Part II of the said Code: Provided also that in case, the statutory period within which an appeal was allowed under the Sick Industrial Companies (Special Provisions) Act, 1985 against an order of the Board had not expired as on the date of notification of this Act, an appeal against any such deemed approved resolution plan may be preferred by any person before National Company Law Appellate Tribunal within ninety days from the date of publication of this order. 7. Section 242 of the IB Code empowers the Central Government to remove any difficulty arises in giving effect to the provisions of the Code. Section 242 is as follows: 242. Power to remove difficulties. - (1) If any difficulty arises in giving effect to the provisions of this Code, the Central Government may, by order, published in the Official Gazette, make such provisions not inconsistent with the provisions of this Code as may appear to be necessary for removing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for removing the difficulties arisen due to SICA Repeal Act, 2003 or omission of provisions of the Companies Act, 2013 , this Appellate Tribunal cannot act pursuant to impugned Notification S.O. 1683(E) dated 24th May, 2017 to entertain the appeal. 9. It was held that order dated 24.05.2017 does not relate to removal of any difficulties arises in giving effect to the provisions of the IB Code. In paragraph 57, following observations have been made by this Appellate Tribunal: 57. To maintain the judicial decorum, though we have noticed the conflict in the order passed by the Hon ble High Court of Delhi and the Notification S.O. 1683(E) dated 24th May, 2017, we refrain from giving any specific declaration about the same. In spite of observations as made above, the next question requires consideration is that if otherwise the appeals are maintainable the impugned Scheme is legal or not. 10. The order passed by the Appellate Tribunal was challenged before the Hon ble Supreme Court by M/s Spartek Ceramics India Ltd. by filing Civil Appeal Nos.7291-7292 of 2018, which Appeals were disposed of by order dated 25.10.2018. It is useful to extract the entire order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls are disposed of. 7) Pending applications shall stand disposed of. 11. The submission of the learned Counsel for the Appellant in respect of the above judgment of the Hon ble Supreme Court dated 25.10.2018 is that the judgment is only an obitor and judgment of this Appellate Tribunal dated 28.05.2018 cannot be read to mean that Notification dated 24.05.2017 is set aside. It is submitted that the Hon ble Supreme Court has also incorrectly noticed that judgment dated 28.05.2018 has set aside the Notification, whereas the NCLAT has not set aside the Notification, but only made an observation that Notification was in excess of power vested in the Central Government. 12. The Hon ble Supreme Court in paragraph 2 clearly noticed the view of the Appellate Tribunal that Notification dated 24.05.2017 travels beyond the scope of removal of difficulties provisions, which observation was approved. The judgment of the Appellate Tribunal has been upheld. Thus, the judgment of the Hon ble Supreme Court clearly lays down that Notification dated 24.05.2017 travels beyond the scope of removal of difficulties order. The Hon ble Supreme Court has also noticed the orders of the Delhi High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 dated 28th May, 2018 in M/s. Spartek Ceramics India Ltd. (Supra) was challenged before the Hon ble Supreme Court in Civil Appeal Nos.7291-7292 of 2018. The Hon ble Supreme Court vide its order dated 25th October, 2018 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. 6. The case of the Appellant being covered by Spartek Ceramics India Ltd. Vs. Union of India Ors. (Supra), we set aside the impugned order dated 13th April, 2018 passed by the Adjudicating Authority, Single Bench, Chennai, being without jurisdiction. The application is not maintainable. However, it will be open to the Respondent to move before the appropriate forum for appropriate relief which may decide the same uninfluenced by the decision of this Appellate Tribunal. 15. The learned Counsel for the Appellant ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th by us in preceding paragraph of this judgment. The judgment of the NCLT Mumbai Bench dated 13.10.2017 in S.M. Dyechem Ltd., in which judgment NCLT had no occasion to notice the judgment of the Hon ble Supreme Court in M/s. Spartek Ceramics India Ltd., hence, cannot be treated as any binding precedent. 19. We are of the view that judgment of the Hon ble Supreme Court in M/s Spartek Ceramics India Ltd. is a law declared by the Hon ble Supreme Court, where Hon ble Supreme Court has specifically approved the view of this Appellate Tribunal that Notification dated 24.05.2017 travels beyond the scope of removal of difficulties provisions. We have already extracted the provisions of Section 242 of the IB Code in preceding paragraphs of this judgment, where as per sub-section (1) of Section 242, Central Government is empowered to issue an order, if any difficulty arises in giving effect to provisions of this Code. The power under Section 242 is thus confine to the powers of Central Government in removing difficulties arising in giving effect to the provisions of the IB Code. The powers cannot be exercised by Central Government to remove any difficulty regarding review or monitoring o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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