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Guidelines Sundaresh Bhatt, Liquidator of ABG Shipyard Vs. Central Board of
Indirect Taxes and Customs [Civil Appeal No. 7667 of 2021]
Amendments to Online Delivery of Educational Course and
The SC observed that the Customs Act, 1962 (Customs Act) and the Code
Continuing Professional Education Guidelines DFW LQ WKHLU RZQ VSKHUHV ,Q FDVH RI DQ\ FRQÁLFW WKH &RGH RYHUULGHV WKH
The Insolvency and Bankruptcy Board of India (Online Delivery of Customs Act. The Customs Act and the Code can be read in a harmonious
Educational Course and Continuing Professional Education by Insolvency manner wherein authorities under the Customs Act have a limited
Professional Agencies and Registered Valuers Organisations) (Amendment) jurisdiction to determine the quantum of operational debt. The Code would
*XLGHOLQHV ZHUH QRWLÀHG RQ 6HSWHPEHU 7KH DPHQGPHQW prevail over the Customs Act, to the extent that moratorium is imposed
VSHFLÀHV WKDW WKH QXPEHU RI SDUWLFLSDQWV WR EH HQUROOHG WKURXJK RQOLQH PRGH in terms of sections 14 or 33(5) of the Code. Post assessment of tax, the
by an Insolvency Professional Agency (IPA) / Registered Valuer Organisation customs authority has to submit its claims timely (concerning customs dues/
(RVO) for a continuing educational course shall not exceed 200. operational debt) in terms of the procedure laid down under the Code. The
customs authority cannot enforce a claim for recovery or levy of interest
Orders on the tax due during the period of moratorium. They cannot transgress
such boundary and proceed to initiate recovery in violation of sections 14
Supreme Court or 33(5) of the Code.
Vidarbha Industries Power Limited Vs. Axis Bank Limited [Civil The IRP, RP or the liquidator, as the case may be, has an obligation to ensure
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Appeal No. 4633 of 2021]
WR TXHVWLRQ DQ\ DVVHVVPHQW LI KH ÀQGV WKH VDPH WR EH H[FHVVLYH 7KH ,53
The Hon’ble SC made the following observations: RP/liquidator, in any case, can immediately secure goods from the customs
• :KHQ $$ LV VDWLVÀHG WKDW D GHIDXOW KDV RFFXUUHG DQG WKH DSSOLFDWLRQ RI DQ authority to be dealt with appropriately, in terms of the Code.
FC is complete in all respects as per requirements, it may by order admit
the application. Legislature intended section 9(5)(a) to be mandatory as it R.K. Industries (Unit-II) LLP Vs. H.R. Commercials Private Limited
uses the word ‘shall’ and section 7(5)(a) of the Code to be discretionary as and Other [Civil Appeal No. 7722 of 2021]
Legislature has, in its wisdom, chosen to use the expression ‘may’ in section 7KH 6& FRQVLGHUHG WZR LVVXHV L H ZKHWKHU WKH OLTXLGDWRU ZDV MXVWLÀHG LQ
7(5)(a) of the Code. Had it been the legislative intent that section 7(5)(a) of discontinuing the second swiss challenge process for the sale of a part of
the Code should be a mandatory provision, Legislature would have used the the assets of the CD and opting for a private sale process through direct
word ‘shall’ and not the word ‘may’. negotiations in respect of the composite assets of the CD? and if so, was the
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• In case of a section 7 application, the AA might examine the expedience
of initiation of CIRP, taking into account all relevant facts and circumstances, process of private sale after issuing an open notice to prospective buyers
LQVWHDG RI FRQÀQLQJ WKH SURFHVV WR WKRVH SDUWLHV ZKR KDG SDUWLFLSDWHG LQ WKH
LQFOXGLQJ WKH RYHUDOO ÀQDQFLDO KHDOWK DQG YLDELOLW\ RI WKH &' 7KH $$ PD\ LQ process earlier.
its discretion not admit the application of a FC. If facts and circumstances
so warrant, the AA can keep the admission in abeyance or even reject the The SC noted that as per the anchor bid document and the second swiss
DSSOLFDWLRQ ,W LV FHUWDLQO\ QRW WKH REMHFW RI WKH &RGH WR SHQDOL]H VROYHQW challenge process document, the prospective bidders were informed that
FRPSDQLHV WHPSRUDULO\ GHIDXOWLQJ LQ UHSD\PHQW RI LWV ÀQDQFLDO GHEWV E\ the liquidator had reserved the right to abandon/cancel/terminate/waive the
initiation of CIRP. said process and/or part thereof at any stage. The SC observed that anchor
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• The SC noted a word of caution holding that even though it to the discretion of the liquidator to explore the best possible method for
section 7(5)(a) may confer discretionary power on the AA, such selling the assets of the CD including private sale through direct negotiations
discretionary power cannot be exercised arbitrarily or capriciously. IRU PD[LPL]LQJ WKH YDOXH RI WKH DVVHWV RIIHUHG IRU VDOH 7KH LQVROYHQF\ UHJLPH
7KH 6& ZKLOH GLVPLVVLQJ WKH UHYLHZ SHWLWLRQ ÀOHG LQ UHVSHFW RI WKH DERYH introduced under the Code has placed fetters on the power of interference
judgement, observed that it is well settled principle that judgments and by the AA and the NCLAT. Courts may not question the judiciousness of the
observations in the judgments are not to be read as provisions of statute. decision taken by the liquidator to enhance the value of assets of the CD.
Judicial utterances and/or pronouncements are in the setting of the facts of It was observed that once the liquidator applies to the AA for appropriate
D SDUWLFXODU FDVH ,W FODULÀHG WKDW WKH HOXFLGDWLRQV LQ LWV MXGJPHQW ZHUH PDGH orders/directions, including the decision to sell the tangible assets of the CD
by adopting a particular mode of sale and the AA grants approval to such a
in the context of the case at hand.
decision, there is no provision in the Code that empowers the NCLAT to
suo motu conduct a judicial review of the said decision.
Asset Reconstruction company (India) Ltd Vs. Tulip Star Hotels Ltd.
& Ors. [Civil Appeal 84-85 of 2020]
K. Parmasivam Vs. The Karur Vysya Bank Ltd. & Anr. [ Civil Appeal
The SC observed that the time of 14 days in section 7(4) of the Code to
No. 9286 of 2019]
ascertain the existence of a default is apparently directory not mandatory. The SC, referring to its decision in the matter of Laxmi Pat Surana, held that
An application to the AA under section 7, in the prescribed form, cannot WKH )& FDQ SURFHHG DJDLQVW WKH JXDUDQWRU ZLWKRXW ÀUVW LQLWLDWLQJ &,53 LQ
be compared with the plaint in a suit, and cannot be judged by the same respect of the principal borrower.
standards, as a plaint in a suit, or any other pleadings in a court of law.
The application cannot be dismissed, without complying the requisites of
State Tax Officer Vs. Rainbow Papers Limited with other appeal
the proviso to section 7(5) i.e., non-occurrence of default, or incomplete [Civil Appeal No. 1661 and 2568 of 2020]
application and non-pendency of disciplinary proceedings against the IP.
An appeal was made against an order of the NCLAT, rejecting the application
As regards the limitation, the SC held that entries in books of accounts ÀOHG E\ WKH 6DOHV 7D[ 2IÀFHU DQG KROGLQJ WKDW WKH JRYHUQPHQW FDQQRW FODLP
and/or balance sheets of a CD would amount to an acknowledgment ÀUVW FKDUJH RYHU WKH SURSHUW\ RI WKH &' DV VHFWLRQ RI WKH *XMDUDW 9DOXH
under section 18 of the Limitation Act, 1963. Accordingly, if there were $GGHG 7D[ $FW *9$7 $FW ZKLFK SURYLGHV IRU ÀUVW FKDUJH RQ WKH
an acknowledgement of the debt by the CD before expiry of the period property of a dealer in respect of any amount payable by the dealer on
of limitation of three years, the period of limitation would get extended account of tax, interest, penalty etc., cannot prevail over section 53 of the
E\ D IXUWKHU SHULRG RI WKUHH \HDUV )XUWKHU WKHUH LV QR EDU WR WKH ÀOLQJ RI Code.
GRFXPHQWV DW DQ\ WLPH XQWLO D ÀQDO RUGHU HLWKHU DGPLWWLQJ RU GLVPLVVLQJ WKH While setting aside the order of NCLAT, the SC observed that if the resolution
application has been passed. plan ignores the statutory demands payable to any state government or a

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