# In the matter of Pr. Director General of Income Tax (Admn. & TPS) Vs. Spartek Ceramics India Ltd. & Anr. CA (AT) Nos. 160 & 258-2017

> NCLAT judgment dated 2018-05-28. Citation: TCN-2018-NCLAT-00255. The case involves two Company Appeals (AT) (Insolvency) No. 160 of 2017 and No. 258 of 2017,…

- **Court:** NCLAT
- **Order date:** 28 May 2018
- **Citation:** TCN-2018-NCLAT-00255
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/pr-director-general-of-income-tax-admn-tps-vs-spartek-ceramics-india-ltd-anr-ca-5451cdcd

## Summary

### Background

The case involves two Company Appeals (AT) (Insolvency) No. 160 of 2017 and No. 258 of 2017, both arising from an order dated 20.10.2016 passed by the Board for Industrial and Financial Reconstruction in Case No. 63/2006. Appeal No. 160 was preferred by the Principal Director of Income Tax (Admn. & TPS) against a scheme of demerger sanctioned by the Board, alleging violation of natural justice and provisions of the SICA Act, 1985, leading to revenue loss. Appeal No. 258 was preferred by GBM Ceramics India Limited & Ors. under Section 32 of the I&B Code read with the SICA Repeal Act, 2003, challenging the same demerger scheme. The appellant in this case claimed to be a creditor of Spartek Ceramics India Limited and alleged that the Board did not consider

…

## Facts

The Principal Director of Income Tax (Admn. & TPS) and GBM Ceramics India Limited & Ors. filed appeals challenging a demerger scheme sanctioned by the Board for Industrial and Financial Reconstruction. The demerger scheme was sanctioned on 20.10.2016. The Principal Director of Income Tax argued that the scheme violated natural justice and provisions of the SICA Act, 1985, leading to revenue loss. GBM Ceramics India Limited & Ors., claiming to be creditors of Spartek Ceramics India Limited, contended that the Board did not adequately consider their objections or the liabilities of Neycer. The appeals were filed under Section 32 of the I&B Code read with the SICA Repeal Act, 2003. A key issue was whether the Central Government could empower the NCLAT to

…

## Issues and analysis

### Issue 1: Whether the Central Government, in exercise of powers conferred under Section 242 of the ‘I&B …

**Ratio:** The power to remove difficulties under Section 242 of the I&B Code does not extend to

…

**Reasoning:** The NCLAT reasoned that the Central Government's power under Section 242 is limited to

…

**Interpretation:** Section 242 of the I&B Code is interpreted as a provision for addressing

…

**Application:** The NCLAT applied this principle by holding that the Central Government's

…

## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Pr. Director…
- **Respondents:** M/S SPARTEK…
- **Advocates:** Puneet…; Neeraj Cha…; +10 more

## Timeline

- **2016-10-20 — Order by…**: Order dated 20.10.2016 passed by the Board for Industrial and Financial Reconstruction in…
- **2016-12-01 — Enforcement of…**: The 'I&B Code' was given…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclat-new-delhi/pr-director-general-of-income-tax-admn-tps-vs-spartek-ceramics-india-ltd-anr-ca-5451cdcd