# In the matter of Embassy Property Development Pvt. Ltd. Vs. State of Karnataka & Ors. Civil Appeal No. 9170-72 -2019

> SC judgment dated 2019-12-03. Citation: TCN-2019-SC-00006. The case involves appeals against an interim order by the High Court of Karnataka, which stayed the…

- **Court:** SC
- **Order date:** 3 Dec 2019
- **Citation:** TCN-2019-SC-00006
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/embassy-property-development-pvt-ltd-vs-state-of-karnataka-ors-civil-appeal-no-9-87cb5908

## Summary

### Background

The case involves appeals against an interim order by the High Court of Karnataka, which stayed the operation of a direction by the NCLT regarding a mining lease held by the Corporate Debtor, M/s. Tiffins Barytes Asbestos & Paints Ltd. The NCLT had set aside an order by the Government of Karnataka rejecting the deemed extension of the mining lease, which was to expire on 25.05.2018. The Resolution Professional sought a declaration that the lease should be deemed valid until 31.03.2020. The Government of Karnataka challenged the NCLT's order in a writ petition before the High Court, leading to the interim stay. The appeals before the Supreme Court question the High Court's interference and the jurisdiction of the NCLT to adjudicate on matters related to mining

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## Facts

M/s. Tiffins Barytes Asbestos & Paints Ltd. (Corporate Debtor) held a mining lease granted by the Government of Karnataka, set to expire on 25.05.2018. A notice for premature termination was issued on 09.08.2017, alleging violation of statutory rules. Udhyaman Investments Pvt. Ltd. (Financial Creditor) initiated CIRP against the Corporate Debtor under Section 7 of the IBC before NCLT Chennai, which admitted the application on 12.03.2018 and appointed an Interim Resolution Professional. The Interim Resolution Professional sought a deemed extension of the lease until 31.03.2020, which the Government of Karnataka rejected on 26.09.2018. The Corporate Debtor withdrew its writ petition seeking the same relief. The Resolution Professional then filed a Miscellaneous

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## Issues and analysis

### Issue 1: Whether the High Court ought to interfere, under Article 226/227 of the Constitution, with an order …

**Ratio:** The principle of alternative remedy dictates that High Courts should generally refrain

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**Reasoning:** The Court reasoned that the NCLT's jurisdiction is primarily related to matters arising

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**Interpretation:** Article 226 of the Constitution grants High Courts the power to issue writs for

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**Application:** The Court applied the principle of alternative remedy and the limitations on

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## Parties

- **Judges:** V. RAMASUBR…; ROHINTON FALI…; +1 more
- **Appellants:** M/s Embassy…
- **Respondents:** M/s. Tiffins…; State of Karnataka…

## Timeline

- **2017-08-09 — Notice for Premature…**: Notice for premature termination of the mining lease was issued to the Corporate Debtor…
- **2018-03-12 — CIRP Init…**: NCLT Chennai admitted the application under Section 7 of IBC and initiated CIRP against…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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