Madras High Court Directs SBI to Pursue IBC Relief before NCLT over Attachment Order as Matter Involves Insolvency & Bankruptcy of Corporate Persons [Read Order]

The High Court of Madras has directed the State Bank of India (SBI) to pursue relief under the Insolvency and Bankruptcy Code, 2016 (IBC) before the National Company Law Tribunal (NCLT).

The High Court ruled that as the matter involved Insolvency and Bankruptcy of Corporate Persons it falls under the purview of the IBC and should be addressed by the NCLT.

The order came in response to a writ petition filed by SBI challenging an attachment order issued by the Assistant Commissioner of Goods and Service Tax & Central Excise, Pollachi Division.

The petitioner, represented by Mr. B. Raghavulu Naidu, argued that the attachment order should be cancelled within a specific time frame.

Mr. M. Santhanaraman represented the first respondent, the Assistant Commissioner of Goods and Service Tax & Central Excise, and Mr. Karthik Jagannath appeared for the second respondent, the Joint Sub Registrar.

The first respondent argued that once an application under Section 95 of the IBC is filed, the adjudicating authority must act on it.

The issue before the bench was whether the matter should be adjudicated by the High Court or should be directed to the NCLT as per the provisions of the IBC, 2016.

The bench noted that it was undisputed that the matter under the IBC was already pending before the NCLT against the corporate debtor and hence NCLT should be the appropriate forum to address the matter.

The bench examined the relevant provisions of the IBC and highlighted that under Section 95 of the IBC, once an application is filed, the adjudicating authority must act upon it.

Moreover, Section 60 of the IBC specifies that the NCLT has jurisdiction over insolvency resolution and liquidation for corporate persons, including corporate debtors and personal guarantors.

The division bench comprising Chief Justice Mr. Sanjay V. Gangapurwala and Justice P.D. Audikesavalu ruled that the matter in question involves issues related to insolvency and bankruptcy, which fall under the jurisdiction of the NCLT as per the Insolvency and Bankruptcy Code, 2016 (IBC).

The court determined that the NCLT is the appropriate legal forum to handle cases pertaining to insolvency resolution and liquidation for corporate persons, including corporate debtors, as specified in Section 60 of the IBC.

The High Court disposed of the writ petition, directing the petitioner, SBI, to take the necessary steps before the NCLT as allowed by law as it is the competent authority to address such matters. The court also clarified that all contentions raised by the respective parties would remain open for consideration by the NCLT.

The bench also held that the earlier interim order, which had been granted, no longer had any relevance or validity in light of the present decision. In result, the bench refrained from imposing any costs on either party.

To Read the full text of the Order CLICK HERE

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