The NCLT lacks jurisdiction to direct the renewal of an excise license or waive statutory renewal fees, as these are sovereign functions of the State governed by specific state laws and the Constitution, and cannot be overridden by the provisions of the Insolvency and Bankruptcy Code.

ORDER

(Hybrid Mode)

Under List 2 of VIIth Schedule of the Constitution of India, the Excise is falling under the domain of State List under Article 246 of the Constitution of India. Since, being a "duty", a monetary extraction of liability imposted on sale, transport, storage, manufacture of liquor, etc., it takes a shape of having an effect of restrictive application of dues to be remitted by the license holder or its consumers to regulate the trade of liquor, which falls within the domain of the Excise Act.

2. The issue involved herein for consideration, before us would be very limited in its context, as regards to the principles flowing from the judgment of M/s. Embassy Property Developments Pvt. Ltd. v. State of Karnataka , as reported in 2020 Vol 13 SCC Page 308. The issue therein, that was decided was, as to what would be the ambit of exercise of powers under the provisions contained under Section 60 (5) of the Code, for the purposes of seeking mandatory direction for renewal of license, which is otherwise under law is a sovereign functioning of the State, with regards to the Excise / Distillery License and that too after waiving out of the statutory pre-requisites, which falls to be within a statutory domain of the excise of powers by the regulatory bodies and such other authorities, which cannot be permitted to be overriden by the provisions of the I&B Code. The aforesaid principle was laid down by the Hon'ble Apex Court in the matters of M/s. Embassy Property Developments Pvt. Ltd. v. State of Karnataka , 2020 Vol 13 SCC Page 308.

The relevant part is extracted here under:

27. Though in Thressiamma Jacob v. Deptt. of Mining & Geology this Court held that the mineral wealth in the sub-soil would go along with the ownership of the land, the question of entitlement of the Government to charge royalty was left open, as it was pending reference to the Constitution Bench. But in the case on hand, the land which formed the subject-matter of mining lease, belongs to the State of Karnataka. The liberties and privileges granted to the corporate debtor by the Government of Karnataka under the mining lease, are delineated in Part IV of the mining lease. The mining lease was issued in accordance with the statutory rules, namely, Mineral Concession Rules, 1960. Therefore the relationship between the corporate debtor and the Government of Karnataka under the mining lease is not just contractual but also statutorily governed.

28. As we have indicated elsewhere, the MMDR Act, 1957 is a Parliamentary enactment traceable to Entry 54 in List I of the Seventh Schedule. This Entry 54 speaks about regulation of mines and development of minerals to the extent to which such regulation and development under the control of the Union, is declared by Parliament by law to be expedient in public interest. In fact the expression "public interest" is used only in 3 out of 97 entries in List I, one of which is Entry 54, the other two being Entries 52 and 56. Interestingly, Entry 23 in List II does not use the expression "public interest", though it also deals with regulation of mines and mineral development, subject to the provisions of List I. It is this element of "public interest" that finds a place in Section 2 of the MMDR Act, 1957, in the form of a declaration. Section 2 of the MMDR Act, 1957 reads as follows:

"2. Declaration as to the expediency of Union control.- It is hereby declared that it is expedient in the public interest that the Union should take under its control the regulation of mines and the development of mi