Chandra Prakash Mehra Vs Union of India and Ors. — Insolvency and Bankruptcy | Calcutta HC (2024)

Chandra Prakash Mehra Vs Union of India and Ors. — Insolvency and Bankruptcy | Calcutta HC (2024)

What the court decided

AI extract

Outcome

CAN 1 of 2024 and CAN 2 of 2024 allowed; writ petition WPA No. 15709 of 2022 disposed of; parties granted liberty to proceed in connection with the CIRP; interim order granted earlier vacated; no order as to costs.

Issue for consideration

Whether Sections 94 to 100 (specifically Sections 95 to 100) of the Insolvency and Bankruptcy Code, 2016 are intra vires, as challenged in the writ petition. +1 more

Court's answer

In view of the judgment of the Supreme Court, which came in the meantime, the relevant provisions of the Code of 2016 have been held to be intra vires, as a perusal of the documents annexed to CAN 1 of 2024 and CAN 2 of 2024 clearly shows.

Ratio / Principle

There is no impediment for the applicants of CAN 1 of 2024 and CAN 2 of 2024 to proceed before the concerned NCLT in connection with the Corporate Insolvency Resolution Process (CIRP) on the self-same issues as involved in the present writ petition.

Key takeaways

CAN 1 of 2024 and CAN 2 of 2024 are allowed, thereby disposing of the writ petition bearing WPA No. 15709 of 2022, granting the parties liberty to proceed in connection with the CIRP.ratio¶21
The interim order granted earlier in connection with the writ petition stands vacated.ratio¶22

Detailed headnote1 paragraphs

Writ petition WPA No. 15709 of 2022 (Sri Chandra Prakash Mehra Vs. Union of India and others), challenging the vires of Sections 94 to 100 of the Insolvency and Bankruptcy Code, 2016, was disposed of on March 1, 2024 after the Supreme Court had held the relevant provisions (Sections 95 to 100) intra vires. Applications CAN 1 of 2024 and CAN 2 of 2024 of the Resolution Professional and the Bank (SBI) were allowed; the parties were granted liberty to proceed with the CIRP before the NCLT; the interim order granted earlier was vacated; no order as to costs. Single-judge order of Sabyasachi Bhattacharyya, J. Counsel for the Bank had observed that the additional challenge to Section 94 was not germane as the NCLT application was not at the instance of the corporate debtor.

D/L. 19. March 1, 2024. MNS.

WPA No. 15709 of 2022 + CAN 1 of 2024 + CAN 2 of 2024

Sri Chandra Prakash Mehra Vs. Union of India and others

Ms. Rashmi Bothra

…for the Union of India.

Mr. Om Narayan Rai, Mr. J. Choradia, Ms. S. Indoria, Mr. D. Tiwari

…for the respondent no. 2/SBI.

Mr. M. S. Tiwari, Mr. S. K. Tiwari

…for the respondent no. 3/RP.

Affidavits-of-service filed by the applicants in

Court today be kept on record.

Although the respondents/applicants are represented through counsel, none appears for the writ petitioner at the time of call.

The writ petition had been preferred inter alia challenging the vires of Sections 94 to 100 of the Insolvency and Bankruptcy Code, 2016 (in short “the Code of 2016”). In the meantime, the vires of Sections 95 to 100 of the Code of

2

2016 were challenged before the Supreme Court unsuccessfully.

Learned counsel appearing in support of both the applications, being the Resolution Professional, who has been appointed in the meantime, and the Bank, place reliance on the judgment of the Supreme Court, where the said provisions were held to be intra vires .

Learned counsel for the Bank points out that although an additional challenge to Section 94 was also incorporated in the reliefs sought in the writ petition, the same is not germane in the present case, since the application before the National Company Law Tribunal (NCLT) was not at the instance of the corporate debtor.

A perusal of the documents annexed to CAN 1 of 2024 and CAN 2 of 2024 clearly shows that in view of the judgement of the Supreme Court, which has come in the meantime, the relevant provisions have been held to be intra vires .

As such, there is no impediment for the applicants of CAN 1 of 2024 and CAN 2 of 2024 to proceed before the concerned NCLT in connection with the Corporate Insolvency Resolution Process (CIRP) on the self-same issues as involved in the present writ petition.

3

In such view of the matter, CAN 1 of 2024 and CAN 2 of 2024 are allowed, thereby disposing of the writ petition, bearing WPA No. 15709 of 2022, granting the parties liberty to proceed in connection with the CIRP.

The interim order granted earlier in connection with the writ petition stands vacated accordingly.

There will be no order as to costs.

Urgent photostat certified copies of this order, if applied for, be made available to the parties upon compliance with the requisite formalities.

(Sabyasachi Bhattacharyya, J.)