SC: Provisions of Insolvency & Bankruptcy Code override those of Tea Act

The Hon’ble Supreme Court, on 4th October 2019, in the matter of Duncans Industries Ltd. v. A. J. Agrochem pronounced that provisions of Insolvency and Bankruptcy Code override those of the Tea Act and the insolvency proceedings under Section 7 or Section 9 of the IBC initiated by the operational creditor shall be maintainable even without prior consent of the Central Government as per Section 16G of the Tea Act.

The Hon’ble Supreme Court observed that:

Section 16G of the Tea Act, 1953 shall be applicable only in a case where the actual management of a tea undertaking or tea unit owned by a company has been taken over by any person or body of persons authorised by the Central Government under the Tea Act. Therefore, taking over the actual management and control by the Central Government or by any person or body of persons authorised by the Central Government is sine qua non before Section 16G of the Tea Act is made applicable. (Para 7.1)

The Insolvency and Bankruptcy Code, 2016 is a complete Code in itself. (Para 7.2)

Provisions of the Insolvency and Bankruptcy Code, would have an over­riding effect over the Tea Act, 1953 and that no prior consent of the Central Government before initiation of the proceedings under Section 7 or Section 9 of the IBC would be required and even without such consent of the Central Government, the insolvency proceedings under Section 7 or Section 9 of the IBC initiated by the operational creditor shall be maintainable. (Para 7.4)

Copy of judgement: Judgement_04-Oct-2019

-Adv. Tushar Kaushik

Leave a Reply

Your email address will not be published. Required fields are marked *