# In the matter of Ashapura Minechem Limited MA 303-2019 In C.P.(IB)-4508-MB-2018

> NCLT judgment dated 2019-03-15. Citation: TCN-2019-NCLT-04403. Ashapura Minechem Limited filed an application under Section 10 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 15 Mar 2019
- **Citation:** TCN-2019-NCLT-04403
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ashapura-minechem-limited-ma-303-2019-in-cpib-4508-mb-2018-1878fb00

## Summary

### Background

Ashapura Minechem Limited filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The company had previously been declared a sick industrial company by the Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies Act (SICA), 1985, and a draft rehabilitation scheme (DRS) was under consideration. However, with the repeal of SICA, the proceedings before BIFR abated. The company then filed a writ petition challenging the repeal, which was dismissed with a direction to apply to the NCLT. Simultaneously, the petitioner filed a Miscellaneous Application (MA 303/2019) seeking Order u/s.30 and Section 31 of Insolvency Code. The main Petition and

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## Facts

Ashapura Minechem Limited (AML) was incorporated on 19.02.1982. AML filed a reference with the BIFR under Section 15(1) of SICA, 1985, registered as Case No. 34/2011. On 12.03.2012, BIFR declared AML a Sick Industrial Company. AML submitted a Draft Rehabilitation Scheme (DRS) to BIFR, lenders, and concerned parties. Mr. Arun Chadha was appointed as a Special Director on the Board of AML on 31.03.2013. The Insolvency and Bankruptcy Code, 2016, received Presidential Assent on 28.05.2016. AML submitted its latest DRS on 01.07.2016. The Sick Industrial Companies Act was repealed on 2.11.2016. AML filed a writ petition in the Bombay High Court on 28.10.2017, challenging the validity of amended Section 4(b) of the Sick Industrial Companies (Special provisions) Repeal Act,

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## Issues and analysis

### Issue 1: Whether the present Section 10 application is to be treated as continuation of BIFR proceedings on …

**Ratio:** The proviso to Section 4(b) of the SICA Repeal Act, as clarified by S.O. 1683(E), allows

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**Reasoning:** The NCLT considered the legislative intent behind the enactment of the IBC, which was to

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**Interpretation:** The notification S.O. 1683(E) clarifies that any scheme sanctioned under

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**Application:** The NCLT applied the proviso to the facts of the case, noting that the

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## Parties

- **Judges:** M.K. Sh…
- **Respondents:** Ashapura Minechem…; Edelweiss Asset…

## Timeline

- **2011-06-02 — Reference t…**: The Corporate Applicant filed before the Hon'ble BIFR its reference under Section 15(1)…
- **2012-03-12 — Declaration as Sick…**: In exercise of powers conferred under S. 17(3) of SICA, vide its order dated 12.03.2012,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 10 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-10)

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