The Supreme Court has rejected a petition by the Noida Special Economic Zone (NSEZ) contesting the National Company Law Appellate Tribunal’s (NCLAT) approval of a resolution plan that awarded Rs. 50 lakh to NSEZ, a significant reduction from its original claim of around Rs. 6 crore in the Corporate Insolvency Resolution Plan (NCLAT).
A bench consisting of Justices Abhay S. Oka and Augustine George Masih held that the Insolvency and Bankruptcy Code (IBC) holds precedence over the SEZ Act, as clarified under Section 238 of the IBC, thereby dismissing NSEZ’s argument for exemptions from payments.
Justice Masih stated, “The provisions of IBC 2016 prevail over other laws, including the SEZ Act 2005, rendering NSEZ’s claims for exemptions on fees or penalties for sub-lease renewal or transfer charges inapplicable.”
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The appellant had further argued that the valuation of the corporate debtor was flawed, claiming non-compliance with Regulation 35(1)(a) of the Insolvency and Bankruptcy Board regulations due to the lack of a physical inspection. However, the Court, referencing the Duncans Industries Ltd. v. State of U.P. case, ruled that valuation is a factual matter supported by existing material, thus not warranting intervention.
The judgement observed, “The valuation process appears just and reasonable as per Section 35C of the IBC, with due process followed.”
Since the resolution plan has been implemented and payments disbursed to all entitled parties, including NSEZ, the Court dismissed the appeal, solidifying the plan’s approval.
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Mr. Manish Singhvi, Sr. Adv.; Mr. Anshul Rawat, Adv.; Mr. Saurabh George, Adv.; Ms. Manju Jetley, AOR appeared for the appellants and Mr. Gopal Jain, Sr. Adv.; Mr. Abhishek Anand, Adv.; Ms. Mithu Jain, AOR; Mr. Karan Kohli, Adv.; Mr. Krishna Sharma, Adv.; Mr. Kunal Godhwani, Adv.; Mr. Karan Batura, AOR; Ms. Kinjal Chadha, Adv. appeared for the respondents.
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