# In the matter of A.J. Agrochem Vs. Duncans Industries Ltd. CA(AT)(Insolvency) No. 710-2018

> NCLAT judgment dated 2019-06-20. Citation: TCN-2019-NCLAT-00499. The case involves an appeal against an order by the National Company Law Tribunal (NCLT),…

- **Court:** NCLAT
- **Order date:** 20 Jun 2019
- **Citation:** TCN-2019-NCLAT-00499
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/aj-agrochem-vs-duncans-industries-ltd-ca-a58d23fe

## Summary

### Background

The case involves an appeal against an order by the National Company Law Tribunal (NCLT), Kolkata Bench, which rejected an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (I&B Code) by A.J. Agrochem against Duncans Industries Limited (Corporate Debtor). The NCLT rejected the application because the 'Operational Creditor' did not seek consent from the Central Government to initiate the Corporate Insolvency Resolution Process (CIRP), citing Section 16G(1)(c) of the Tea Act, 1953. The appellant argues that the Tea Act provision should not apply and that Section 9 of the I&B Code should have an overriding effect.

## Facts

A.J. Agrochem, the appellant and an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (I&B Code) against Duncans Industries Limited, the corporate debtor. The Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, rejected the application based on the premise that the provisions of the I&B Code are not applicable without the Central Government's consent, citing Section 16G(1)(c) of the Tea Act, 1953. The corporate debtor, Duncans Industries Ltd., has seven tea gardens under the management and control of the Tea Board, authorized by a notification issued by the Central Government on January 28, 2016, under Section 16E(1) of the Tea Act, 1953. The appellant supplied goods from the 'Birpara Tea

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## Issues and analysis

### Issue 1: Whether the application under Section 9 of the I&B Code is maintainable against a tea company …

**Ratio:** Section 238 of the I&B Code provides that its provisions shall have an overriding

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**Reasoning:** The tribunal reasoned that Section 16G(1)(c) of the Tea Act relates to winding up

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**Interpretation:** The interpretation of Section 16G(1)(c) of the Tea Act is that it restricts

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**Application:** The tribunal applied the principle that Section 9 of the I&B Code, which

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** A. J. Agr…
- **Respondents:** Duncans Industries…; Duncans Industries…

## Timeline

- **1953-01-01 — Enactment of…**: The Tea Act, 1953 was enacted to provide for…
- **2014-11-14 — Cause of…**: The respondent claimed the cause…

## 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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