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2022 Supreme(Tri) 248
HIGH COURT OF TRIPURA AGARTALA
Indrajit Mahanty, CJ., S.G. Chattopadhyay, J.
Kalpataru Properties Private Limited - Appellant
Versus
Subhankar Bhowmik & Ors. - Respondents
Review Pet. No. 26/2022
Decided On : 21-09-2022
Mr. Kamaldeep Dayal, Advocate, Mr. Kousik Roy, Advocate, Mr. Sunil Mittal, Advocate, Ms. Anu Tewari, Advocate, Ms. Nidhi Malhotra, Advocate, Ms. Namrata Shah, Advocate., for the Petitioner(s); Mr. Biswanath Majumder, CGC, Ms. Rumela Guha, Advocate, Mr. J. Borah, Advocate., for the Respondent(s)
The rights of decree holders are recognized within the IBC framework, particularly regarding property held in trust, requiring judicial balance between creditor rights and moratorium provisions.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 3(10), 14, and 18 - The review petition concerns the interpretation of 'decree holders' within the insolvency framework and their rights regarding enforcement of decrees as creditors in CIRP. (Paras 8-15)
(B) Legal standing - The petitioner, although not a party to the original proceedings, successfully argued that the impugned judgement adversely affects its ongoing litigation, demonstrating a right to seek review despite prior non-involvement.
(C) Balancing of interests - The court highlighted the need to balance the rights of decree holders and the moratorium on execution under the Code, ultimately concluding that property in question held by the corporate debtor was properly subject to prior court orders protecting those rights.
(D) Judicial recognition - The court recognized the need to protect the interests of the Review Petitioner while maintaining the integrity of the insolvency process. Findings indicate that the NCLT's treatment of the property as held in trust for the Review Petitioner aligns with the statutory framework. (E) Result - Review petition allowed, modifying the original judgement to affirm the Review Petitioner’s rights. (Paras 11, 12, 14, 15)
| Table of Content |
|---|
| 1. review petition context and background. (Para 1 , 2) |
| 2. overview of initial petition details. (Para 3) |
| 3. evidence concerning the review petitioner's past arbitration. (Para 6) |
| 4. nclt's recognition of review petitioner's rights. (Para 7 , 10 , 11) |
| 5. supreme court judgments on decree holders. (Para 13 , 14) |
| 6. final judgment of the review petition. (Para 15 , 16) |
JUDGMENT
Indrajit Mahanty; CJ. - This review petition is filed by one Kalpataru Properties Pvt. Ltd. seeking, inter alia, directions for 'review of the observations & conclusions as contained in the Judgement and Order dated 14.03.2022 (Annexure-18 supra), more particularly, those observations & conclusions as contained in Paragraphs 8 to 15 thereof, passed in Writ Petition(C)(PIL) No.4 of 2022 (Sri Shubhankar Bhowmik Versus Union of India & Others)....'
2. At the outset, it has been fairly pointed out by the Learned Counsel for the Review Petitioner that the Review Petitioner was not a party to the original PIL proceedings. However, it is stated that the observations contained in the paragraphs 8 to 15 of the judgement dated 14.03.2022 passed in the Writ Petition(C)(PIL) No.4 of 2022 ('Impugned Judgement'), prejudicially and adversely affect the Review Petitioner in an on-going highly contested litigation in which it is a party.
3. Before going into the contentions of the parties, the facts may be noted in brief :
3.1 WP(C)(PIL) No.4 of 2022 was filed by the petitioner therein, with, inter alia, the following prayers:
'1. Issue an appropriate Writ, Order or Direction more particularly in the nature of WRIT OF CERTIORARI or any other appropriate writ declaring the provisions of Section 3 (10) of the Insolvency and Bankruptcy Code , 2016 read with Regulations 9A as ultra vires inasmuch as it fails to define the terms 'other creditors' and accordingly, to strike them down on the vice of Article 14 of the Constitution of India, or the impugned provisions may be interpreted harmoniously to include the words 'decree holder' as existing in Section 3 (10) to be at par with 'financial creditors' under Regulation 9(a), to save them from unconstitutionality;
2. Issue an appropriate Writ, Order or Direction more particularly in the nature of WRIT OF CERTIORARI or any other appropriate writ declaring that claims filed under a CIRP by 'decree holder' under Regulation 9(a) of the CIRP Regulations, be considered at par with claims filed by 'financial creditors' and be amenable to all consequential rights available to financial creditors; and/or.....'
3.2 When the PIL was heard, the PIL Petitioner had argued that he is a shareholder of public listed companies, who are either creditors and/or corporate debtors in terms Insolvency and Bankruptcy Code , 2016 ('IBC') and he was therefore interested in the petition to that extent. It was further his contention that the issues raised had a wide ranging effect as they would be germane to almost all corporate insolvency resolutions under the IBC. Principally, the issues raised in the PIL dealt with the treatment of 'decree holders' who hold decrees against a Corporate Debtor under the insolvency resolution process. To sum it up the contention was that though the IBC includes 'decree holders' in the definition of 'creditors', it does not prescribe the class of creditors to which the term 'decree holder' belongs, and therefore there exists a need to iron out the creases by this Hon'ble Court. It was argued that without such prescription in the IBC, the class of 'decree holders' falls into the residual class of 'other creditors', which it is stated manifestly arbitrary and therefore violates Article 14.
3.3 In the aforesaid context, we thought it fit to first examine the provisions of law being referred to by the counsel for the PIL Petitioner to see whether even a prima facie case for entertaining the PIL was made out. We therefore heard the counsel for the PIL Petitioner at length before passing the Impugned Order.
3.4 After considering
