Tamil Nadu Generation And Distribution v. Union Of India
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 08.11.2021 CORAM :
THE HON'BLE MR.SANJIB BANERJEE, CHIEF JUSTICE AND THE HON'BLE MR.JUSTICE P.D.AUDIKESAVALU W.P.NO.19785 OF 2021 Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) Rep. by its Chief Engineer/Mechanical Coal Having registered office at NPKRR Maaligai No.144, Anna Salai, Chennai - 600 002.
...Petitioner
Vs 1.Union of India Department of Law and Justice Rep. by its Secretary No.26, Mansingh Road Jaisalmer House, New Delhi - 110 011.
2.South India Corporation Private Limited Chettinad Towers, No.603, Anna Salai Chennai - 600 006.
3.The Union of India Through the Ministry of Corporate Affairs Having its office at Sastri Bhavan Rajendra Prasad Marg New Delhi - 110 001.
...Respondents
(R3 Suo motu impleaded vide order dated 22.10.2021) Prayer : Petition filed under Article 226 of the Constitution of India seeking issuance of a writ of declaration declaring the provisions of Section 9 of the IBC, 2016 as unconstitutional and void in so far as it extends its application to the disputes arising under the Electricity Act,, 2003.
For the Petitioner :
Mr.R.Shunmugasundaram Advocate-General for Mr.L.Jaivenkatesh For the Respondents :
Mr.R.Shankaranarayanan Additional Solicitor-General for Mr.Rajesh Vivekanandan for 1st respondent :
Mr.Dhruv Mehta for Mr.R.Jawaharlal for 2nd respondent
ORDER
(Order of the Court was made by Hon'ble Chief Justice) The issue involved in the present petition is as to whether a company which is substantially owned by a government, is amenable to the jurisdiction of the National Company Law Tribunal in insolvency proceedings.
2. Though the petitioner seeks to suggest that a company which is substantially owned by any government may not be complained against or insolvency proceedings brought against it before the NCLT, there does not appear to be any exemption provided under the Companies Act, 2013 or the Insolvency and Bankruptcy Code, 2016 in such regard.
3. The petitioner also seeks to rely on Section 86(1)(f) of the Electricity Act, 2003 and submits that Tangedco, the petitioner herein, being the generator and distributor of electricity under the aegis of the State Government in the State of Tamil Nadu would be amenable to the Act of 2003 and since the matter pertains to the generation of the electricity, the Act of 2003 as a special statute will prevail over the Acts of 2013 and 2016.
4. The assessment of one Act being regarded as a special Act qua another arises when there is a possibility of a conflict or, in fact, when there is an unavoidable conflict. In the present case, no such scenario arises as the principal respondent has taken the petitioner herein before the NCLT
claiming to be a creditor of the petitioner herein and citing the perceived inability of the petitioner herein to pay its debts. The provision that the petitioner refers to from the Act of 2003 - Section 86(1)(f) - pertains to disputes between the licensees and distributing companies. Though the petitioner is a distributing company, the second respondent is certainly not a licensee and its legal status will be that of a trade or operational creditor.
5. The petitioner, however, accepts that the second respondent has a right to approach the NCLT, but asserts that the petitioner has a right to raise legitimate disputes qua the claim. Indeed, it is the petitioner's case that the petitioner has a counter-claim and there is no net amount that can be said to be payable to the second respondent herein.
6. It is certainly within the domain of the NCLT to adjudicate upon any dispute raised by a debtor in any insolvency proceedings brought by a creditor. Indeed, the NCLT is obliged to decide such issue before the NCLT can arrive at a conclusion that the perceived debtor company is insolvent.
7. Accordingly, since the petitioner seeks leave to raise all disputes pertaining to the claim of the second respondent before the National Company Law Tribunal, W.P.No.19785 of 2021 is permitted to be withdrawn with liberty to the petitioner to raise permissible disputes in accordance with law before the National Company Law Tribunal. However, the petitioner will not question the authority of the National Company Law Tribunal to receive the petition.
W.M.P.No.21059 of 2021 is closed. There will be no order as to costs.
Sd/- Assistant Registrar (CS-VI) // True Copy // Sub Assistant Registrar bbr
To:
1.The Secretary Union of India Department of Law and Justice No.26, Mansingh Road, Jaisalmer House, New Delhi - 110 011.
2.The Union of India Through the Ministry of Corporate Affairs Having its office at Sastri Bhavan Rajendra Prasad Marg, New Delhi - 110 001.
+1cc to Mr.R.Jawaharlal, Advocate SR.No.57339 W.P.No.19785 of 2021 EV(CO) RVM(11/11/2021)