2018 Supreme(All) 886

ALLAHABAD HIGH COURT
BEFORE : DILIP B. BHOSALE, C.J. AND YASHWANT VARMA, J.
INDEPENDENT POWER PRODUCERS ASSOCIATION OF INDIA ....Petitioner
Versus
UNION OF INDIA AND OTHERS ....Respondents
(Civil Misc. Writ Petition Nos. 18170, 23181 and 23183 of 2018, decided on 27th August, 2018)

Headnote:(A) Constitution of India, 1950 – Article 226 – Insolvency and Bankruptcy Code, 2016 – Section 12 – Banking Regulation Act, 1949 – Sections 35AA, 35AB – Interim relief – Insolvency resolution process – Power generating companies – Petitioner has been a NPA – Its case for restructuring was duly considered and ultimately found unviable – Its second plan of restructuring has already been turned down by creditors in their meeting – Almost 90% of its shareholding which stood pledged with its lenders has already been invoked – Its outstanding dues and recoverable owed to lenders stands at Rs. 9997 Crores – Held RBI’ action that resolution process in respect of this corporate debtor cannot be delayed beyond time frame stipulated by it and must be addressed with expedition cannot be illegal – Further moneys due and recoverable from petitioner is public debt – No relief in interim can be granted to petitioner. [Para 115]

       (B) Insolvency and Bankruptcy Code, 2016 – Section 12 – Banking Regulation Act, 1949 – Sections 35AA, 35AB – Interim relief – Insolvency resolution process – Petitioners are association of power generating companies – Petitions neither carrying nor disclosing financial status or outstanding of any individual member – None of lender banks arrayed as party respondents – Court unable to consider views of lenders in respect of prayer for interim relief as claimed – Petitions not carrying details of any individual restructuring plans which may be jeopardized – Petitioners not entitled to interim relief. [Para 116]

       (C) Insolvency and Bankruptcy Code, 2016 – Section 12 – Insolvency resolution – Time limit – Completing corporate insolvency resolution process within a period of 180 days – Once corporate insolvency resolution process initiated, it either ends with approval of a Resolution Plan or ends with dissolution of corporate debtor – It cannot be interrupted – It must get resolved within 180 days plus 90 days i.e. 270 days. [Para 23]

       (D) Banking Regulation Act, 1949 – Sections 35AA, 35AB – Powers – RBI to issue direction/guidelines – Under purview of Section 35AA RBI can issue directions to any banking company or banking companies to effectively use provisions of Insolvency and Bankruptcy Code, 2016 for timely resolution of stressed assets – Thus urgent measures are required for their speedy resolution to improve financial health of banking companies for proper economic growth of country – And for that purpose provisions of IBC can be effectively used for resolution of stressed assets by empowering banking regulator to issue direction in specific cases. [Paras 22.1 and 22.7]

       (E) Evidence Act, 1872 – Sections 54(A) and 74 – Standing Committee reports – Whether and to what extent Court can place reliance upon – Held Court can take judicial notice of Parliamentary Standing Committee report under Section 57(4) of Evidence Act and it is admissible under Section 74 of aforesaid Act – Court can take such a report on record or note of as existence of a historical fact – Such report can also be taken aid of for purpose of interpretation of a statutory provision wherever it is so necessary – Fact that Standing Committee on Energy gone into issues faced by power sector in general and commented upon merits of directions issued by RBI – Held these findings alone cannot be read as overriding view taken and adopted by RBI. [Paras 19 and 103]

       (F) Banking Regulation Act, 1949 – Sections 35-AA and 35-AB – Writ Petition – Maintainability of – Locus/Standai – Challenge to validity of directives issued under Section 35AA and Section 35AB of Banking Regulation Act, 1949 by Independent Power Producers Association – Directive is about to affect adversely power sector as a whole and its members collectively – Relevant Bye laws/Articles of IPPA empowering associations to initiate litigation in Courts – Any decision rendered on their writ petition would bind all its members – Writ petition maintainable. [Paras 62 and 63]

       Result: Order Accordingly.