AI Structured Summary
Not yet generated for this judgment
Judgment
Arindam Sinha, J
W.P.(C) No.8090 of 2019 and I.A. no.6769 of 2019
Mr. Mohanty, learned senior advocate appears on behalf of petitioner and in continuation of his submissions recorded in order dated 21st March, 2023, demonstrates from his client’s I.A. no.2813 of 2023 that opposite party no.2 (supplier) was operational creditor and its position considered in the resolution plan (RP) approved by the National Company Law Tribunal (NCLT) on its judgment dated 5th September, 2019. He demonstrates from paragraph 5 of the application that pursuant to said judgment, on opposite party no.2 having had a claim of Rs.26,79,70,808.27/- the RP accepted Rs.22,01,84,363/-. Consequently, his client having stepped into shoes of the management of the buyer, paid 47.70 % of the accepted amount, being Rs.10,50,27,941/-. He submits the payment was made on 24th March, 2022 vide Unit Transaction Reference (UTR) no. SBIN 422083896125. The judgment of NCLT has become final on no challenge mounted against it. The supplier having been paid the money in terms of the plan, there was no relevance of any dispute referred under Micro, Small and Medium Enterprises Development Act, 2006. Impugned award dated 20th February, 2019, though precedes judgment dated 5th September, 2019 of the NCLT, but is required to be interfered with on judicial review by reason of participation of opposite party no.2 in the resolution process and having had accepted the payment. He relies on sections 31, 60(5) and 238 in Insolvency and Bankruptcy Code, 2016 to submit, interference is necessary.
With regard to requirement under section 19 in the 2006 Act, on pre-deposit, he relies on judgments of the Supreme Court in;
(i) L. Chandra Kumar v. Union of India, reported in AIR 1997 SC 1125, paragraphs 78 and 79 for declaration of law that judicial superintendence over decisions of all Courts and Tribunals within respective jurisdiction of the High Court is also part of the basic structure of the Constitution and can never be ousted or excluded; and
(ii) Whirlpool Corporation v. Registrar of Trade Marks, Mumbai reported in AIR 1999 SC 22, paragraphs 14 and 15. He submits, his client’s contention in the writ petition squarely falls under the 3rd contingency stated in paragraph 15, on the order or proceeding being wholly without jurisdiction.
Mr. Das, learned senior advocate appears on behalf of opposite party no.2 (supplier). He submits, he is not questioning the power of judicial review vested with the High Courts. His reliance is on section 19 mandating a requirement of pre-deposit to be made before invoking the jurisdiction. He submits, section 19 includes the High Court, in use of the word Court, to mandate that there shall not be entertained any application unless the appellant (not being a supplier) has pre-deposited. He relies on judgment dated 8th October, 2021 of the Supreme Court in Civil Appeal no.6252 of 2021 (Gujarat State Disaster Management Authority v. M/s. Aska Equipments Limited) paragraphs 9, 10 and 11.
Mr. Das submits further, he needs to obtain instruction regarding whether there is case pending before the Supreme Court in respect of judgment of the NCLT /the approved RP.
Parties will also consider the position emerging from operation of the 2016 Act having provision for its overriding effect against the 2006 Act, also having similar provision.
List for final hearing and disposal on 26th April, 2023. Interim order to continue till next date of hearing.
……………………………..