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2024 Supreme(Online)(KAR) 1444
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF JUNE, 2024 BEFORE THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR WRIT PETITION NO. 56412 OF 2017 (GM-DRT)
BETWEEN:
SRI. M. JAYA S/O M. HANUMANTHAPPA, AGED ABOUT 48 YEARS, R/O KAGGAL VILLAGE-583 116 BALLARI TALUK AND DISTRICT.
…PETITIONER (BY SRI. A. MAHAMAD TAHIR, ADVOCATE)
AND:
1. UNION OF INDIA DEPARTMENT OF LEGAL AFFAIRS, MINISTRY OF LAW AND JUSTICE, 4TH FLOOR, A-WING, SHASTRI BHAWAN, NEW DELHI-110 001 REPRESENTED BY ITS SECRETARY.
Digitally signed by R HEMALATHA Location: HIGH 2. DEBTS RECOVERY TRIBUNAL COURT OF KARNATAKA NO.4, SHANKAR NAG ROAD, SHANTHALA NAGAR, RICHMOND TOWN, BENGALURU-560 025 REPRESENTED BY ITS REGISTRAR.
3. THE MINISTRY OF CORPORATE AFFAIRS KENDRIYA SADAN, KORMANGALA, BANGALORE-34 REPRESENTED BY ITS REGIONAL SECRETARY.
(R-3 AMENDED VIDE COURT ORDER DATED
15.02.2023)
…RESPONDENTS (BY SRI. H. SHANTI BHUSHAN, DSGI FOR R1 & R3;
R2 SERVED)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND
227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT THE R- 1 TO ISSUE NOTIFICATION AS REQUIRED UNDER SECTION 3[1A] OF THE RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL INSTITUTIONS ACT, 1993. DIRECT THE R-2 TO REGISTER PETITIONER'S INSOLVENCY PETITION UNDER SECTION 80 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016.
THIS PETITION, COMING ON FOR FINAL HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
The petitioner filed a petition under Sections 10, 11, 12, and
13 of the Provincial Insolvency Act, 1920, seeking to be declared insolvent.
2. A preliminary objection was raised regarding the maintainability of the petition. After hearing the petitioner, the learned District and Sessions Judge issued an order stating that due to the commencement of the Insolvency and Bankruptcy Code, 2016, the Provincial Insolvency Act, 1920, stands repealed. Therefore, the petition was deemed not maintainable, as an efficacious remedy is provided under Section 179(1) of the Insolvency and Bankruptcy Code, 2016.
3. Counsel for the petitioner argued that no notification has been issued to enforce the provisions contained in Chapter 6 of the Insolvency and Bankruptcy Code, 2016. Thus, the learned District Judge had jurisdiction to consider the petition for adjudication of the petitioner as insolvent.
4. Sri H. Shanthi Bhushan, learned Additional Solicitor General of India for respondents No.1 and 3, submitted that no notification has been issued to give effect to the provisions of Chapter 6 of the Insolvency and Bankruptcy Code, 2016. 5. After considering the submissions from both sides.
6. Section 1 of the Insolvency and Bankruptcy Code, 2016, applies to the whole of India, and sub-clause 3 states that it shall come into force on such date as the Central Government may appoint by notification in the Official Gazette.
7. In this case, the Central Government has not issued any notification to enforce the provisions contained in Chapter 6 of the Insolvency and Bankruptcy Code, 2016. Therefore, since Chapter 6 has not been enforced, the learned District and Sessions Judge retains jurisdiction to adjudicate on the petition filed by the petitioner seeking insolvency under the Provincial Insolvency Act, 1920.
8. The learned District and Sessions Judge did not exercise the jurisdiction vested in him, and accordingly, the impugned order needs to be set aside.
9. In light of the above considerations, the petition is allowed.
10. The impugned order dated 21.7.2017 passed by the II Additional District and Sessions Judge, Ballari in I.C.No.5/2017 dismissing the petition for want of jurisdiction is hereby quashed.
11. The learned District Judge to consider the petition filed by the petitioner under the provisions of the Provisional Insolvency Act, 1920, and to pass an appropriate order in accordance with law after notifying the parties.
