# In the matter of ATV Projects (India) Ltd Vs. Union of India & Ors. WP (C) 4340-2017

> HC judgment dated 2017-12-05. Citation: TCN-2017-HC-00003. ATV Projects (India) Pvt. Ltd. filed a writ petition challenging the constitutional validity of…

- **Court:** HC
- **Order date:** 5 Dec 2017
- **Citation:** TCN-2017-HC-00003
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-chandigarh-bench/atv-projects-india-ltd-vs-union-of-india-ors-wp-0d2f2ff0

## Summary

### Background

ATV Projects (India) Pvt. Ltd. filed a writ petition challenging the constitutional validity of Section 4(b) of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 ('Repeal Act'). The petitioner, a turnkey projects executing company, faced financial difficulties after 1994-95 and filed a reference with the Board for Industrial & Financial Reconstruction (BIFR) in 1998, being declared a 'sick company' in 1999. IDBI was appointed as the operating agency. The petitioner claimed to have settled with most of its secured lenders. A Draft Rehabilitation Scheme (DRS) was circulated by BIFR in 2015 but remained pending due to objections. In November 2016, objections were resolved, but the scheme was not sanctioned. The Repeal Act came into effect on December

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## Facts

ATV Projects (India) Pvt. Ltd., a turnkey projects company, faced financial losses after 1994-95. In 1998, the company filed a reference with the BIFR and was declared a 'sick company' in 1999. IDBI was appointed as the operating agency. The company claimed to have settled with 27 of its 28 secured lenders and had a Draft Rehabilitation Scheme (DRS) circulated by BIFR on September 14, 2015. The DRS was pending due to objections from income tax authorities. On November 30, 2016, the objections were resolved, but the scheme was not sanctioned. The Sick Industrial Companies (Special Provisions) Repeal Act, 2003, came into effect on December 1, 2017, leading to the abatement of BIFR proceedings. The company was required to approach the NCLT within 180 days. The company

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## Issues and analysis

### Issue 1: Whether Section 4(b) of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003, is …

**Ratio:** The principle established in Ashapura Minechem Ltd. v. Union of India is that the object

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**Reasoning:** The court reasoned that the legislature has the power to repeal existing laws and enact

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**Interpretation:** Section 4(b) of the Repeal Act is interpreted as a valid exercise of

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**Application:** The court applied the ratio to the facts of the case, holding that the

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## Parties

- **Judges:** SANJIV K…; PRATHIBA M.…
- **Appellants:** M/S ATV PROJECTS…
- **Respondents:** ATV Projects…; UNION OF INDIA &…

## Timeline

- **1998-01-01 — Reference t…**: Petitioner filed a reference with the Board for Industrial & Financial Reconstruction…
- **1999-04-21 — Declared Sick…**: Petitioner was declared a…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 31 — Approval of resolution plan](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-31)

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