ANIL GOEL Vs. BANK OF BARODA & ORS

JUDGEMENT

(1.) Parlies are represented by their respective counsels. Heard Sh. Abhishek Anand for the RP of Corporate Debtor Company, Sh. Vikram Bhalla, Advocate for the Bank of Baroda, Sh. Vinod Kant, Ld. Additional Advocate General alongwith Dr. Y.K. Srivastava, Chief Standing Counsel representing the State Government/District Magistrate, Kanpur. The counsel for the RP put forth such grievance of the RP stating that he is not able to operate the Bank's account properly as certain sum of amount lying with the company's account is reportedly withheld by the Bank of Baroda on the strength of an order vide letter dated 05.12.2017 issued by the Deputy Collector. Kanpur at the instance of the District Administration, Kanpur, despite of and during the period of moratorium as declared by this Court U/s 14 of the I & B Code, which tantamount to violation of the Code U/s 74 of the Code. Hence, needful action to be taken in the matter, against such disobedient authority(s) . At this stage, Ld. Addl. Advocate General alongwith Chief Standing Counsel made intervention and would submit that the Authority concern of the District Administration, Kanpur would take corrective steps to recall/clarify its earlier order/instruction in order to give full liberty to the Corporate Debtor Company to operate its Bank's accounts through the RP/COC as per the provision of the I & B Code, 2016. Having heard the submissions of learned counsel for both the parties at length, we are of the view that the bankers of the Corporate Debtor Company specifically the Bank of Baroda are expected well to act as per the provision of the I & B Code read with the prescribed procedure and guidelines as issued by the RBI time to time and to ensure necessary compliance of moratorium period as declared by this Court as per its order dated 30.05.2017 issued under Section 14 of the I & B Code, 2016. Further, the RP and COC of the Corporate Debtor Company ought to be allowed to operate its Bank's accounts in order to complete the CIRP which is a time bound measure and the mandate of the Code. Further, the Time is Essence of the Code.

(2.) Therefore, the administrative instructions/orders by the District Administration, Kanpur those appear to be inconsistent with the provision of the I & B Code has to be ignored as being non est in law. Because, the legal position in respect of the present I & B Code has been well settled by the Hon'ble Supreme Court in the matter of M/s. Innoventive Industries Ltd. v/s ICICI Bank & Anr. /Civil Appeal No.8337-8338 of 20171 and in the matter of Alchemist Asset Reconstruction Company Limitedv/s M/s. Hotel Gaudavan Pvt. Ltd. & ors. ICivii Appeal No. 16929 of 2017 (arising out ofSLP (C) No. 18195/2017, which has ruled such that, an old law must give way to later enactment of Parliament e.g. the I & B Code, 2016, which is having an overriding effect U/s 238 of the Code. The relevant paras in order to elaborate and illustrate the above staled legal position as propounded by the Apex Court in the above referred judgment may be reproduced herein below. Para 50(i) & (vii) and relevant extract of para 53 & 54 in the matter of s Innoventive Industries Ltd. v/s ICICI Bank & Anr. are reproduced herein below: 50(i) Repugnancy under Article 254 arises only if both the Parliamentary (or existing law) and the State law are referable to List III in the 7th Schedule to the Constitution of India. (vii) Though there may be no direct conflict, a State law may be inoperative because the Parliamentary law is intended to be a complete, exhaustive or exclusive code. In such a case, the State law is inconsistent and repugnant, even though obedience to both laws is possible, because so tons as the State law is referable to the same subject matter as the Parliamentary law to any extent, it must sive way.

(3.) The facts of the present case disclose a very sorry state of affairs. Several proceedings had been taken and ultimately a petition filed under the Insolvency and Bankruptcy Code, 2016 was admitted on 31.03.2017 by the National Company Law Tribunal, Principal Bench, New Delhi.