Case Law Details
State Bank of India Vs Assistant Commissioner (Madras High Court)
Introduction: In a recent ruling, the Madras High Court has issued directions to the State Bank of India (SBI) concerning the pursuit of relief under the Insolvency and Bankruptcy Code, 2016 (IBC). The court’s decision is driven by the involvement of corporate insolvency in the matter and the need for resolution through the National Company Law Tribunal (NCLT).
1. Background of the Case
This case involves State Bank of India (SBI) and an attachment order related to corporate insolvency. The court’s directives stem from the complexities of the matter and the legal framework under the Insolvency and Bankruptcy Code, 2016 (IBC).
2. Legal Framework: IBC of 2016
The court refers to the Insolvency and Bankruptcy Code, 2016 (IBC), which provides the legal framework for addressing insolvency and bankruptcy issues concerning corporate entities, including corporate debtors and personal guarantors. The IBC establishes the National Company Law Tribunal (NCLT) as the adjudicating authority for these matters.
3. Parties Involved
The court acknowledges the representation of the petitioner (SBI), the first respondent, and the government advocate for the second respondent. The presence of legal counsel from all parties underscores the significance of the case.
4. Role of NCLT in IBC Matters
The court emphasizes that when an application is filed under Section 95 of the IBC, the adjudicating authority must take action. Section 60 of the IBC designates the NCLT as the competent authority for insolvency resolution and liquidation concerning corporate entities, including corporate debtors.
5. Court’s Directive and Disposal of Writ Petition
Given the involvement of corporate insolvency and the NCLT’s jurisdiction, the Madras High Court directs the petitioner (SBI) to pursue appropriate steps before the National Company Law Tribunal. The court’s decision effectively disposes of the writ petition while leaving all contentions of the parties open for consideration before the NCLT.
6. Impact on Interim Order
As a result of the writ petition’s disposal, any interim orders previously granted no longer hold significance in this context.
7. Conclusion and Costs
The court concludes its decision by highlighting that there will be no order regarding costs in this matter. It signals the end of the legal proceedings related to this writ petition, providing clarity on the course of action to be taken in the context of corporate insolvency under the IBC. The Madras High Court’s directive to the State Bank of India (SBI) to pursue relief under the Insolvency and Bankruptcy Code, 2016 (IBC), through the National Company Law Tribunal (NCLT) underscores the importance of adhering to the legal framework for corporate insolvency matters. This decision provides clarity and guidance on the appropriate forum and procedure for resolving complex issues related to corporate insolvency and bankruptcy.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
Heard Mr.B.Raghavulu Naidu, learned counsel for the petitioner, Mr.M.Santhanaraman, learned counsel for the first respondent and Mr.Karthik Jagannath, learned Government Advocate for the second respondent.
2. It is not disputed that the matter under Insolvency and Bankruptcy Code, 2016 (for brevity, hereinafter referred to as, “the IBC of 2016”) is pending before the National Company Law Tribunal against the corporate debtor.
3. It is submitted by learned counsel for the first respondent that once an application under Section 95 of the IBC of 2016 is filed, the adjudicating authority has to act on it. It is further submitted that Section 60 of the IBC of 2016 provides that the adjudicating authority, with regard to insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors, is the National Company Law Tribunal.
4. Learned counsel for the petitioner and learned counsel for the first respondent are ad idem that the matter will have to be dealt with by the National Company Law Tribunal.
5. In the light of that, the writ petition stands disposed of. The petitioner may take steps before the National Company Law Tribunal, as may be permissible in law. In that event, all the contentions of the respective parties are kept open.
6. In view of the disposal of the present writ petition, the interim order, granted earlier, does not survive.
7. There will be no order as to costs. Consequently, W.M.P.No.2031 of 2021 is closed.
