Siddhi Vinayak Logistics Limited Through Its Liquidator Mr. Dushyant Dave vs The Deputy Director Directorate Of Enforcement & Ors.

ORDER

(a)

Quash/Set aside the impugned letter reference No. ECIR/MBZO/10/2016/735 and similar other letters all dated 24.04.2017 issued by the Respondent No. 1 to the 5 | P a g e debtors of the Corporate Debtor including Respondents No. 2 to 5;

(b)

Issue appropriate directions to Respondent No. 2 to 5 to pay/clear the admitted outstanding amount/debt to the Corporate Debtor in a time bound manner;

(i)

Withdraw the provisional attachment order with immediate effect for the sake of continuing the liquidation process which shall benefit the creditors as well as other stakeholders of the Corporate Debtor;

(ii)

Remit the amount of Rs. 2,29,10,131.06 which was withdrawn/transferred from the account of the Corporate Debtor to the Enforcement Directorate on 2nd August 2018 into the Liquidation Account of the Corporate Debtor;

“….37. From a combined reading of sub-section (4) and sub-section (2) of Section 60 with Section 179, it is clear that none of them hold the key to the question as to whether NCLT would have jurisdiction over a decision taken by the government under the provisions of MMDR Act, 1957 and the Rules issued thereunder. The only provision which can probably throw light on this question would be sub-section (5) of Section 60, as it speaks about the jurisdiction of the NCLT. Clause (c) of sub--section (5) of Section 60 is very broad in its sweep, in that it speaks about any question of law or fact, arising out of or in relation to insolvency resolution. But a decision taken by the government or a statutory authority in relation to a matter which is in the realm of public law, cannot, by any stretch of imagination, be brought within the fold of the phrase “arising out of or in relation to the insolvency resolution” appearing in Clause (c) of sub-section (5). Let us take for instance a case where a corporate debtor had suffered an order at the hands of the Income Tax Appellate Tribunal, at the time of initiation of CIRP. If Section 60(5)(c) of IBC is interpreted to include all questions of law or facts under the sky, an Interim Resolution Professional/Resolution Professional will then claim a right to challenge the order of the Income Tax Appellate Tribunal before the NCLT, instead of moving a statutory appeal under Section 260-A of the Income Tax Act, 1961. Therefore the jurisdiction of the NCLT delineated in Section 60(5) cannot be stretched so far as to bring absurd results. [It will be a different matter, if proceedings under statutes like Income Tax Act had attained finality, fastening a liability upon the corporate debtor, since, in such cases, the dues payable to the Government would come within the meaning of the expression “operational debt” under Section 5(21), making the Government an “operational creditor” in terms of Section 5(20). The moment the dues to the Government are crystalised and what remains is only payment, the claim of the Government will have to be adjudicated and paid only in a manner prescribed in the resolution plan as approved by the Adjudicating Authority, namely, the NCLT.]…”.

“….173. Although various provisions of the IBC indicate that the objective of the statute is to ensure that the corporate debtor remains a “going concern”, there must be a specific textual hook for the NCLT to exercise its jurisdiction. NCLT cannot derive its powers from the “spirit” or “object” of the IBC. Section 60(5)(c) of the IBC vests the NCLT with wide powers since it can entertain and dispose of any question of fact or law arising out or in relation to the insolvency resolution process. We hasten to add, however, that the NCLT’s residuary jurisdiction, though wide, is nonetheless defined by the text of the IBC. Specifically, the NCLT cannot do what the IBC consciously did not provide it the power to do….”