M/S. SHEKHAR RESORTS LIMITED (UNIT OF ORIENT TAJ) versus UNION OF INDIA

M/S. SHEKHAR RESORTS LIMITED (UNIT OF ORIENT TAJ) versus UNION OF INDIA

Where a corporate debtor could not deposit the Scheme-determined settlement amount within the Scheme period because it was legally impossible to make payments during an IBC moratorium, the debtor cannot be penalized or rendered remediless; relief by appropriate remedial measures is available. Accordingly, the High Court's refusal of relief was erroneous and the deposited amount must be appropriated towards the Scheme dues and a discharge certificate issued.

Parties
Appellant Corporate Debtor: M/S. SHEKHAR RESORTS LIMITED (UNIT OF ORIENT TAJ); Respondent: Union of India
Jurisdiction
India
Judgment Date
05 January 2023
Procedural Posture
Civil Appeal / Appeal Against High Court Judgment Dated 24.06.2021
Outcome
Appeal allowed; High Court judgment quashed and set aside
Legal Topics
Moratorium Under IBC, Sabka Vishwas (legacy Dispute Resolution) Scheme, 2019, Article 226 Writ, Designated Committee Under the Scheme, Payment During Moratorium
Insolvency Law Tax Law Constitutional Law Administrative Law Moratorium Under IBC Sabka Vishwas (legacy Dispute Resolution) Scheme, 2019 Article 226 Writ Designated Committee Under the Scheme +1 more

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Parties

M/S. SHEKHAR RESORTS LIMITED (UNIT OF ORIENT TAJ)

Appellant Corporate Debtor

Union of India

Respondent

Procedural Posture

Civil Appeal / Appeal Against High Court Judgment Dated 24.06.2021

Legal Issues

  1. 1 Whether a corporate debtor can be denied benefit under the Sabka Vishwas Scheme for failure to pay settlement amount when payment was impossible due to an IBC moratorium
  2. 2 Whether the High Court could direct acceptance of payment or effectively extend the Scheme under Article 226
  3. 3 Whether Designated Committees' non-functioning after scheme closure precludes relief where courts have set aside rejections and administrative instructions permit manual processing

Ratio Decidendi

Where a corporate debtor could not deposit the Scheme-determined settlement amount within the Scheme period because it was legally impossible to make payments during an IBC moratorium, the debtor cannot be penalized or rendered remediless; relief by appropriate remedial measures is available. Accordingly, the High Court's refusal of relief was erroneous and the deposited amount must be appropriated towards the Scheme dues and a discharge certificate issued.

Court Disposition

Appeal allowed; High Court judgment quashed and set aside

Orders

  • Impugned judgment and order dated 24.06.2021 of the High Court is quashed and set aside
  • Payment of Rs.1,24,28,500/- already deposited by the appellant shall be appropriated towards settlement dues under 'Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019'