NCLT/NCLAT can exercise jurisdiction under Section 60(6)(c) of IBC, 2016

By Editor4 Corporate Law Judiciary March 8, 2021

TaxGuru Citation: 2021 taxguru.in 475
Case Name: Gujarat Urja Vikas Nigam Limited Vs Amit Gupta & Ors. (Supreme Court of India)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Courts: Supreme Court of India

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Judgment¹ dated 8^th March, 2021 of the Hon’ble Supreme Court of India in the matter of Gujarat Urja Vikas Nigam Limited Vs. Mr. Amit Gupta & Ors. [Civil Appeal No. 9241 of 2019]

While holding that (i) The NCLT/NCLAT can exercise jurisdiction under section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 (Code) to stay termination of contracts solely on account of Corporate Insolvency Resolution Process (CIRP) being initiated against the Corporate Debtor (CD), and (ii) The NCLT/NCLAT correctly stayed the termination of the Power Purchase Agreement (PPA), since allowing it to terminate the same would certainly result in the corporate death of the CD, the Hon’ble Supreme Court in its order dated 8^th March, 2021 made some important observations in the context of insolvency proceedings as under:

Sl. No.

Issue / Theme

Observation / Ruling

Para /
Page No.

Objective of Code

(a) The primary focus of the Code is to ensure the revival and continuation of the CD. The interests of the CD have been bifurcated and separated from the interests of persons in management. The timelines which are prescribed in the Code are intended to ensure the resuscitation of the CD.

(b) The enactment of the Code is in significant senses a break from the past. While interpreting the provisions of the Code, care must be taken to ensure that the regime which Parliament found deficient and which was the basic reason for the enactment of the new legislation is not brought in through the backdoor by a process of disingenuous legal interpretation.

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