Back
2019 Supreme(Cal) 804
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
SABYASACHI BHATTACHARYYA, J.
Mackeil Ispat and Forging Limited – Petitioner
Versus
State Bank of India – Respondent
C.O. No. 3224 of 2019
Decided On : 20-11-2019
Advocate Appeared:
For the Petitioners: S.N. Mookherjee, Pradip Kr. Tarafder, Sambuddha Dutta.
For the Respondents: S.K. Kapur, Suhani Dwivedi, Dipan Sarkar, Deepanjan Dutta.
The refusal to grant leave for filing a supplementary affidavit was not an order appellable under Section 61(1) of the IBC. The court also clarified that Rule 55 of the NCLT Rules does not automatically apply to IBC matters and that the tribunal's refusal exhibited bias and a partisan approach.
Headnote:
Article 227 - Refusal of Leave to File Supplementary Affidavit - Insolvency and Bankruptcy Code, 2016 - Section 61(1), Section 60(5)(c), Rule 55 of NCLT Rules - The court held that the refusal to grant leave for filing a supplementary affidavit was not an order appellable under Section 61(1) of the IBC. The court also clarified that Rule 55 of the NCLT Rules does not automatically apply to IBC matters and that the tribunal's refusal exhibited bias and a partisan approach.
Fact of the Case:
The petitioner sought leave to file a supplementary affidavit, which was refused by the National Company Law Tribunal. The petitioner argued bias and lack of fair play in the tribunal's refusal.
Finding of the Court:
The court found that the refusal to grant leave for filing a supplementary affidavit was not an order appellable under Section 61(1) of the IBC. The court also held that the tribunal's refusal exhibited bias and a lack of fair play.
Issues: The main issue was the refusal of the tribunal to grant leave to file a supplementary affidavit and the maintainability of the application under Article 227 of the Constitution.
Ratio Decidendi: The court clarified that the refusal to grant leave for filing a supplementary affidavit was not an order appellable under Section 61(1) of the IBC. The court also held that Rule 55 of the NCLT Rules does not automatically apply to IBC matters and that the tribunal's refusal exhibited bias and a partisan approach.
Final Decision: The court allowed the petition, set aside the impugned order, and granted the petitioner leave to file the supplementary affidavit before the NCLT.
JUDGMENT :
SABYASACHI BHATTACHARYYA, J.
1. The present application under Article 227 of the Constitution of India has been preferred against an order passed by the National Company Law Tribunal, Kolkata Bench, refusing leave to the corporate debtor/petitioner the leave to file a supplementary affidavit.
2. Learned senior counsel appearing for the petitioner argues that although, by the same order, the financial creditor was permitted to file a rejoinder much beyond the time which was stipulated by the tribunal itself for filing of the same, bias was exhibited in the impugned order by refusing the petitioner to file its supplementary affidavit in the same breath.
3. Learned senior counsel for the petitioner argues that, by an order dated June 19, 2019, a photocopy of which has been handed over on behalf of the opposite party itself, the matter was fixed for further consideration on August 14, 2019 but only seven days was granted to the financial creditor to file rejoinder. However, the rejoinder was filed much thereafter. The corporate debtor, by the same order dated June 19, 2019, was granted time to file a reply within seven days as well.
4. In the impugned order, no reason was assigned as to why the belated rejoinder of the financial creditor was allowed to be filed as late as on August 14, 2019 but, in the same breath, the leave sought by the corporate debtor to file its supplementary affidavit was refused on the ground that no valid reasons were submitted.
5. This, according to the petitioner, exhibited a lack of impartial attitude on the part of the tribunal. It is argued that the cardinal rule of fair play was absent in such refusal on the part of the tribunal.
6. Learned senior counsel for the opposite party/financial creditor argues at the outset that an appeal lay under Section 61(1) of the Insolvency and Bankruptcy Code, 2016 (hereafter referred to as "the IBC"). As such, as settled by various High Courts and the Supreme Court, this court ought not to have entertained or to dispose of the present application under Article 227, since an equally efficacious alternative remedy is available under the IBC. By placing reliance on the preamble of the IBC, learned senior counsel for the opposite party argues that primacy was given to insolvency resolution in a time-bound manner for maximization of value of assets, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders. As such, it is argued, in the event this court entertains the present application under Article 227 of the Constitution of India despite the availability of an appeal, the entire scheme of the IBC and allied Acts would be frustrated, thereby thwarting the legislative scheme of early resolution of such matters and opening up a flood-gate of similar matters, which would overburden this court despite the availability of an appellate tribunal.
7. In this context, learned senior counsel for the opposite party places reliance on a judgment reported at Commissioner of Income Tax and Others vs. Chhabil Dass Agarwal, (2014) 1 SCC 603 for the proposition that the High Courts would not readily interfere in such matters under Article 226 or Article 227 of the Constitution of India in view of availability of an alternative remedy.
8. Learned senior counsel next argues that the filing of a further supplementary affidavit by the petitioner was, in any event, barred by Rule 55 of the National Company Law Tribunal Rules, 2016 (hereinafter referred to as "the NCLT Rules").
9. Rule 55 provides that no pleadings, subsequent to the reply, shall be presented except by the leave of the tribunal upon such terms as a tribunal may think fit.
10. It is next argued that the delay in filing the reply by the opposite party remained unchallenged and cannot be a justification for the delay in filing the supplementary affidavit.
11. It is next submitted on behalf of the opposite party, on the question of maintainability of the present revisional application,
