# Ashapura Minechem Ltd Vs Union of India and Ors WP (C) 9674-2017

> HC judgment dated 2017-11-01. Citation: TCN-2017-HC-00006. The case involves a challenge to the constitutional validity of certain provisions of the Sick…

- **Court:** HC
- **Order date:** 1 Nov 2017
- **Citation:** TCN-2017-HC-00006
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-chandigarh-bench/ashapura-minechem-ltd-vs-union-of-india-and-ors-wp-13fac456

## Summary

### Background

The case involves a challenge to the constitutional validity of certain provisions of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 (Repeal Act). The petitioner, Ashapura Minechem Ltd., had initially challenged the entire Repeal Act but later restricted its challenge to Section 4(b) and Section 5(1)(d), arguing they violate Article 14 of the Constitution. The petitioner is a company engaged in mining, processing, sale, and export of minerals. Prior to the Repeal Act, the petitioner had made a reference to the Board of Industrial and Financial Reconstruction (BIFR) and was declared a sick company under the Sick Industrial Companies (Special Provisions) Act, 1985 (SIC Act). A draft rehabilitation scheme was pending when the Repeal Act came into

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## Facts

Ashapura Minechem Ltd., the petitioner, is a company involved in mining, processing, and exporting minerals. Prior to the enactment of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 (Repeal Act), Ashapura Minechem Ltd. had been declared a sick company under the Sick Industrial Companies (Special Provisions) Act, 1985 (SIC Act) and had a draft rehabilitation scheme pending before the Board of Industrial and Financial Reconstruction (BIFR). The Repeal Act repealed the SIC Act and abated all proceedings pending before the BIFR. The petitioner challenged the constitutional validity of Section 4(b) and Section 5(1)(d) of the Repeal Act, arguing that these provisions unfairly discriminate between sick companies with sanctioned schemes under the SIC Act

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## Issues and analysis

### Issue 1: Whether Section 4(b) of the Repeal Act, as amended, which differentiates between sick companies …

**Ratio:** Article 14 of the Constitution requires equal treatment in equal circumstances, but it

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**Reasoning:** The court reasoned that the classification made by the Repeal Act is based on a valid

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**Interpretation:** The court interpreted Article 14 to allow for reasonable classification in

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**Application:** The court applied the principles of Article 14 to the facts of the case and

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## Parties

- **Judges:** SANJIV K…; PRATHIBA M.…
- **Appellants:** Ashapura Minechem…
- **Respondents:** UNION OF INDIA &…

## Timeline

- **2011-06-02 — Reference t…**: The petitioner company made a reference before the Board of Industrial and Financial…
- **2012-03-12 — Declared Sick…**: The BIFR declared the petitioner company to be a sick company under the provisions of the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 242 — Power to remove difficulties](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-242)

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