Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Insolvency and Bankruptcy Code |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Act(s) Referred | Insolvency and Bankruptcy Code, 2016 (31 of 2016) |
Case(s) Referred | Referred Case 0 Referred Case 1 |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Disposed Off |
Headnote | Insolvency and Bankruptcy Code 2016 – s.60(5)(c) – Contractual dispute – Residuary jurisdiction of NCLT u/s.60(5)(c), if can be invoked – Build Phase Facilities Agreement entered into between appellant and respondent-Corporate Debtor, followed by a Facilities Agreement – Corporate Debtor provided premises with certain specifications, facilities to the appellant for conducting examinations for educational institutions – Termination notice issued by appellant – Ad-interim stay on the notice granted by NCLT – Order upheld by NCLAT – On appeal, held: Appellant was availing the services of the Corporate Debtor and was using the property leased by it – Before the initiation of Corporate Insolvency Resolution Process (CIRP), the appellant had on multiple instances communicated to the Corporate Debtor that there were deficiencies in its services and that the penalty and termination clauses of the Facilities Agreement may be invoked – Residuary jurisdiction of the NCLT cannot be invoked if the termination of a contract is based on grounds unrelated to the insolvency of the Corporate Debtor – In the present case, there is nothing to indicate that the termination of the Facilities Agreement was motivated by the insolvency of the Corporate Debtor – Thus, NCLT does not have any residuary jurisdiction to entertain the present contractual dispute which arose dehors the insolvency of the Corporate Debtor – Judgment of NCLAT set aside – Proceedings initiated against the appellant dismissed for absence of jurisdiction. Insolvency and Bankruptcy Code 2016 – s.238 – Held: s.238 provides that the IBC overrides other laws, including any instrument having effect by virtue of law. Insolvency and Bankruptcy Code 2016 – ss.14, 60(5)(c) – Held: In Gujarat Urja Vikas v. Amit Gupta & Ors. reported as 2021 (3) SCALE 776 it was held that the NCLT’s jurisdiction is not limited by s.14 in terms of the grounds of judicial intervention envisaged under the IBC – It can exercise its residuary jurisdiction u/s.60(5)(c) to adjudicate on questions of law and fact that relate to or arise during an insolvency resolution process – Further, narrow exception crafted in Gujarat Urja must be borne in mind by the NCLT and NCLAT even while examining prayers for interim relief – Exercise of the NCLT’s residuary powers should be governed by the said decision - Note of caution issued to the NCLT and NCLAT regarding interference with a party’s contractual right to terminate a contract. |
Judge | Hon'ble Dr. Justice D.Y. Chandrachud |
Neutral Citation | 2021 INSC 780 |
Petitioner | Tata Consultancy Services Limited |
Respondent | Vishal Ghisulal Jain, Resolution Professional, Sk Wheels Private Limited |
SCR | [2021] 10 S.C.R. 1080 |
Judgement Date | 2021-11-23 |
Case Number | 3045 |
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