Disposed

Paradeep Phosphates v. State

Orissa HC7 Dec 2021WP(C)/20338/2014

Case brief

AI extract

What is this about?

In this writ petition challenging a state order rejecting a tax concession representation based on a BIFR scheme, the High Court observed the petitioner had already sought relief before the BIFR/NCLT. The Court remitted the dispute to the NCLT to proceed with the pending application and directed the continuation of an existing interim protection against coercive action.

What did the court decide?

Writ petition disposed of; national company law tribunal directed to proceed with pending application; existing interim stay extended.

Paradeep Phosphates Vs State — Company and Corporate | Orissa HC (2021)

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IN THE HIGH COURT OF ORISSA AT CUTTACK

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W.P.(C) No.20338 of 2014

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M/s. Paradeep Phosphates Ltd., …. Petitioner Bhubaneswar

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Mr. Bibekananda Mohanti, Senior Advocate assisted by Mr. Adhiraj Mohanty, Advocate -versus-

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State of Odisha and others

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…. Opposite Parties

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Mr. S. S. Padhy, Additional Standing Counsel for Revenue Department and Mr. P. K. Muduli, Additional Government Advocate

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CORAM: THE CHIEF JUSTICE JUSTICE A. K. MOHAPATRA

ORDER 07.12.2021

Order No.

The present writ petition by M/s. Paradeep Phosphates Ltd. (PPL) challenges an order dated 11^th April, 2014 passed by the Additional Chief Secretary to the Government, Finance Department rejecting PPL’s representation seeking tax concession/relief pursuant to the order of the Board for Industrial and Financial Reconstruction (BIFR) in Case No.238 of 2003.

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This is the second round of litigation in this Court at the instance of the Petitioner.

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Earlier the PPL had filed W.P.(C) Nos.27858 and 27859 of 2013 in which this Court passed the following order on 15^th January, 2014:

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“We are of the view that in view of the law laid down by the Hon’ble Supreme Court in the case of State of Karnataka v. Vishwabharathi House Building Co-op. Society & Ors., AIR 2003 SC 1043, the remedy of the petitioner is to approach the Board/Tribunal itself for implementation of its order.

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However, since the prayer of the petitioner at this stage is only limited to give a direction to take a decision on the representation of the petitioner, we direct that decision on the representation of the petitioner be taken by Opp. Party Nos.1 and 2 in accordance with law within two months from the date of receipt of copy of this order.”

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As can be seen that there were two observations in this Court’s previous order: one was that the Petitioner’s remedy against the disinclination of the Opposite Parties-State Authorities to act on the Scheme prepared and sanctioned by the BIFR under Section 15(1) of the Sick Industrial Companies Act (SICA) was to go before the BIFR itself. Essentially, this was in relation to the grievance made by the Petitioner that the Sales Tax concessions which was owing to PPL under the approved Scheme was not being given effect to. The second direction was to the Opposite Parties to decide the Petitioner’s representation. It is the second direction that has resulted in the impugned order of the Additional Chief Secretary, which has been impugned in the present petition.

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This Court has heard the submissions of Mr. Bibekananda Mohanti, learned Senior Counsel for the Petitioner, Mr. S. S. Padhy, learned Additional Standing Counsel for the Sales Tax Department and Mr. P. K. Muduli, learned Additional Government Advocate, for

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Opposite Party No.1-the Additional Chief Secretary to Government, Finance Department.

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It appears that pursuant to the first direction of this Court in the aforementioned order dated 15^th January, 2014, the Petitioner in fact has filed an application before the BIFR, on 18^th June, 2014 and the BIFR had issued a notice on 8^th January, 2015. The said application is at present pending before the National Company Law Tribunal (NCLT), Cuttack Bench, Cuttack.

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The Court is informed that on 31^st August, 2021, the NCLT had passed an order to the effect that in view of the pendency of the present writ petition, it would prefer awaiting the outcome of the present petition before passing further orders in the said application.

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Another development which appears to have taken place is that since the year 2011 the net-worth of PPL turned positive and it asked that it be discharged from the purview of the Scheme. This is reflected in an order dated 6^th September, 2011 passed by the BIFR. In para 13.4 of the said order dated 6^th September, 2011, the BIFR noted that the PPL had ceased to be a sick industrial undertaking within the meaning of Section 3(1)(o) of the SICA and discharged the PPL from the purview of Scheme under the SICA. The BIFR issued further directions including discharging the Special Director appointed by the BIFR on PPL’s Board of Directors.

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Since this Court had already taken a view in the order dated 15^th January, 2014 that PPL should go before the BIFR for all incidental or ancillary reliefs it was seeking in respect of the Scheme from

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which it stands discharged by virtue of the above order dated 6^th September, 2011, the Court considers it appropriate to reiterate that observation and direct that the NCLT, before whom the application filed by PPL on 18^th June, 2014 is currently pending, should proceed with the hearing of the said application in accordance with law. The Court therefore refrains from issuing any direction or making any observation on the plea urged by PPL in the present petition and leaves it open to the PPL to urge all the pleas raised here vis-à-vis the sanctioned Scheme passed in BIFR Case No.238 of 2003 before the NCLT. Likewise, the contention of the Opposite Parties vis-à-vis such plea of the PPL is also left to be urged before the NCLT in accordance with law.

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It must be noted here that in the present case, on 18^th December, 2019, an interim order was passed to the effect that no coercive action would be taken against the Petitioner pursuant to the notice of assessment which had been permitted to be proceeded with by the Court on 8^th December, 2014 with the direction that no final order would be passed in those proceedings. The net effect is that there is an interim protection in favour of the Petitioner preventing any coercive action being taken against it.

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In view of the above directions, whereby the Court has directed that NCLT should proceed with the application pending before it, this Court further directs that the aforementioned interim order dated 18^th December, 2019 will continue till such time the NCLT issues

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appropriate interim directions in the matter at the request of any of the parties.

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With the above directions and observations, the writ petition is disposed of.

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Copy of this order be produced before the NCLT with a request for the matter to be taken up by the NCLT at the earliest.

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An urgent certified copy of this order be issued as per rules.

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M. Panda

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(Dr. S. Muralidhar)
Chief Justice
(A. K. Mohapatra)
Judge

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Paradeep Phosphates v. State

Case brief

What is this about?

What did the court decide?

Paradeep Phosphates v. State

Case brief

What is this about?

What did the court decide?

What the court decided

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