# In the matter of Tamil Nadu Generation and Distribution
Corporation Limited Vs. Union of India & Ors. W.P. No.19785 of 2021

> HC judgment dated 2021-11-08. Citation: TCN-2021-HC-00010. The case involves a petition filed under Article 226 of the Constitution of India seeking a writ of…

- **Court:** HC
- **Order date:** 8 Nov 2021
- **Citation:** TCN-2021-HC-00010
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-chandigarh-bench/tamil-nadu-generation-and-distribution-corporation-limited-vs-union-of-india-ors-7897a2e9

## Summary

### Background

The case involves a petition filed under Article 226 of the Constitution of India seeking a writ of declaration to declare Section 9 of the IBC, 2016 as unconstitutional and void, particularly concerning its application to disputes arising under the Electricity Act, 2003. The petitioner, Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO), is contesting insolvency proceedings initiated against it before the National Company Law Tribunal (NCLT). TANGEDCO argues that as a company substantially owned by the government and governed by the Electricity Act, it should not be subject to the IBC.

## Facts

Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) filed a petition under Article 226 of the Constitution of India, challenging the applicability of Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, to disputes arising under the Electricity Act, 2003. TANGEDCO, a government-owned entity, is facing insolvency proceedings before the National Company Law Tribunal (NCLT) initiated by South India Corporation Private Limited, which claims to be a creditor. TANGEDCO argues that as a generator and distributor of electricity under the aegis of the State Government of Tamil Nadu, it is governed by the Electricity Act, 2003, which should take precedence over the IBC. TANGEDCO also claims to have a counter-claim against the second respondent. The

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## Issues and analysis

### Issue 1: Whether a company which is substantially owned by a government, is amenable to the jurisdiction of …

**Ratio:** There is no explicit exemption provided under the Companies Act, 2013, or the Insolvency

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**Reasoning:** The court reasoned that despite the petitioner's argument that a government-owned company

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**Interpretation:** The absence of an explicit exemption in the Companies Act, 2013, and the IBC,

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**Application:** The court applied this principle to TANGEDCO, stating that despite being a

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## Parties

- **Judges:** Sanjib Ba…; MR.JUSTICE…
- **Respondents:** Tamil Nadu…; South India…

## Timeline

- **2021-10-22 — Suo Motu Impl…**: R3 (The Union of India) was suo motu…
- **2021-11-08 — Order Da…**: Date of the order passed by the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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