2022/DHC/00524

$~19

*

IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of decision: 28^th November, 2022

+

W.P.(C) 10189/2018 & CM APPL. 39715/2018

INSOLVENCY AND BANKRUPTCY BOARD OF

INDIA

..... Petitioner

Through:

Mr. Vikas Mehta, Advocate.

versus

STATE BANK OF INDIA & ORS

..... Respondents

Through:

Mr. Akshit Kapur & Mr. Tushar

Bagga, Advocates for R-1/SBI (M-

7982535712)

CORAM:

JUSTICE PRATHIBA M. SINGH

Prathiba M. Singh, J. (Oral)

1. This hearing has been done through hybrid mode.

2. The present writ petition has been filed by the Petitioner - Insolvency

and Bankruptcy Board of India (hereinafter, “IBBI”) challenging the

impugned order dated 5^th September, 2018 passed by the NCLT in CA-

809(PB)/2018titledState Bank of India v. Su Kam Power Systems Ltd.

Vide the said impugned order, the NCLT has held that Regulation 36A of

the Insolvency and Bankruptcy Board of India (Insolvency Resolution

Process for Corporate Persons) Regulations, 2016 (“Regulation 36A”) is

ultra vires Section 240(1) of the Insolvency and Bankruptcy Code, 2016

(“IBC”). The said provision reads:

Digitally Signed

By:DEVANSHU JOSHI

Signing Date:02.12.2022

11:53:55

Signature Not Verified

2022/DHC/00524

Section 25(2)h of the IBC, 2016

(a) to (g)………

persons to put forward resolution plans;”

Digitally Signed

By:DEVANSHU JOSHI

Signing Date:02.12.2022

11:53:55

Signature Not Verified

2022/DHC/00524

3. The matter came to the NCLT by way of an application filed under

Section 12(2) of the IBC by the Respondent No. 1 - State Bank of India

(SBI) where extension was sought for the completion of the Corporate

Insolvency Resolution Process (CIRP) by a further period of 90 days.

During the course of hearing this application, the NCLT noticed that an

expression of interest was floated however, no resolution plans were filed in

response to the same.

4. This splitting of the CIRP into inviting expression of interest and then

seeking resolution plans as provided in Regulation 36A became the subject

matter of the impugned order. The NCLT then held Regulation 36A¹ to be

ultra vires of Section 240(1) of the IBC, despite there being no specific

challenge to the said Regulation. The reason given by the NCLT was that it

was contrary to the speedy disposal of the Resolution Process. The operative

portion of the impugned order reads as under:

1Inserted vide Insolvency Bankruptcy Board of India (Insolvency Resolution Process for Corporate

Digitally Signed

By:DEVANSHU JOSHI

Signing Date:02.12.2022

11:53:55

Signature Not Verified

2022/DHC/00524

aspect.”

5. The Petitioner has challenged the said impugned order before this

Court on several grounds including on the ground that the NCLT does not

have the jurisdiction and power to decide upon the validity and legality of

Regulations.

6. Vide previous order dated 26th September, 2018, this court directed

that the impugned order passed by the NCLT shall not come in the way of

the matters where ‘Expression of Interest’ has already been issued. The

relevant part of the said order is as follows:

Digitally Signed

By:DEVANSHU JOSHI

Signing Date:02.12.2022

11:53:55

Signature Not Verified

2022/DHC/00524

7. An appeal was preferred by the IBBI, challenging the said order being

LPA No.566/2018 titled Insolvency & Bankruptcy Board of India v. State

Bank of India & Ors. Vide order dated 5^th October, 2018, the ld. Division

Bench granted an interim order in the following terms:

8. Thereafter, vide order dated 4^th May, 2022, the Appeal being LPA

No.566/2018 was disposed of in the following terms:

Digitally Signed

By:DEVANSHU JOSHI

Signing Date:02.12.2022

11:53:55

Signature Not Verified

2022/DHC/00524

short “RP”], to progress further.

3.1. In effect, Regulation 36A of the Insolvency and

Bankruptcy Board of India (Insolvency Resolution

Process for Corporate Persons) Regulations, 2016

continues to operate.

Digitally Signed

By:DEVANSHU JOSHI

Signing Date:02.12.2022

11:53:5