# In the matter of Duncans Industries Ltd. Vs. A. J. Agrochem Civil Appeal No.5120-2019

> SC judgment dated 2019-10-04. Citation: TCN-2019-SC-00019. The appeal challenges the NCLAT's decision which reversed the NCLT's order. The NCLT had previously…

- **Court:** SC
- **Order date:** 4 Oct 2019
- **Citation:** TCN-2019-SC-00019
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/duncans-industries-ltd-vs-a-j-agrochem-civil-appeal-no5120-2019-b0aa687a

## Summary

### Background

The appeal challenges the NCLAT's decision which reversed the NCLT's order. The NCLT had previously ruled that the respondent's application under Section 9 of the IBC was not maintainable due to the lack of prior consent from the Central Government, as required under Section 16G of the Tea Act, 1953, given that the management of the appellant's tea gardens had been taken over by the Central Government. The NCLAT overturned this, leading to the present appeal by the original respondent (Duncans Industries Ltd.).

## Facts

Duncans Industries Ltd. (the appellant) owns and manages 14 tea gardens, with the Central Government having taken control of 7 of them via a notification dated 2016-01-28 under Section 16E of the Tea Act, 1953. A. J. Agrochem (the respondent) is an operational creditor who supplied pesticides, insecticides, and herbicides to Duncans Industries. The respondent claimed that Rs. 41,55,500/- was due and payable by the appellant. The respondent initiated proceedings against the appellant before the NCLT under Section 9 of the IBC. The appellant opposed the proceedings, arguing that Section 16G(1)(c) of the Tea Act requires the Central Government's consent for winding up or appointment of a receiver when the management of a tea unit has been taken over by the Central

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## Issues and analysis

### Issue 1: Whether before initiation of the proceedings under Section 9 of the IBC, a consent of the Central …

**Ratio:** The provisions of the IBC have an overriding effect over the Tea Act, 1953, as per

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**Reasoning:** The court reasoned that the IBC is a complete code in itself, designed for the timely

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**Interpretation:** Section 16G(1)(c) of the Tea Act should be interpreted narrowly to apply only

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**Application:** In this specific case, even though the Central Government had issued a

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## Parties

- **Judges:** Arun Mi…; M.R.…; +1 more
- **Respondents:** Duncans Industries…; A. J. Agr…

## Timeline

- **2016-01-28 — Central Government…**: The Central Government issued a notification under Section 16E of the Tea Act, 1953,…
- **2016-09-20 — High Court Inte…**: The Division Bench of the High Court of Calcutta issued an interim order permitting…

## 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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