# In the matter of Insolvency and Bankruptcy Board of India vs. Satyanarayan Bankatlal Malu & Ors.

> SC judgment dated 2024-04-19. Citation: TCN-2024-SC-00079. The case involves an appeal against a High Court judgment that quashed an order by the Sessions…

- **Court:** SC
- **Order date:** 19 Apr 2024
- **Citation:** TCN-2024-SC-00079
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/supreme-court-of-india/insolvency-and-bankruptcy-board-of-india-vs-satyanarayan-bankatlal-malu-ors-af27e182

## Summary

### Background

The case involves an appeal against a High Court judgment that quashed an order by the Sessions Judge directing the issuance of process against the respondents for offences under the Insolvency and Bankruptcy Code (IBC). The High Court held that the Sessions Judge lacked jurisdiction due to amendments in the Companies Act. The appellant, the Insolvency and Bankruptcy Board of India (IBBI), argued that the Sessions Judge did have jurisdiction under Section 236 of the IBC, which refers to the Special Court established under the Companies Act. The core issue revolves around whether the reference to the Special Court in the IBC is a 'legislation by incorporation' or 'legislation by reference', which determines whether subsequent amendments to the Companies Act affect the

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## Facts

M/s. SBM Paper Mills Private Limited, the Corporate Debtor, filed a petition on September 4, 2017, under Section 10 of the Insolvency and Bankruptcy Code (IBC) for initiating the Corporate Insolvency Resolution Process (CIRP). The National Company Law Tribunal (NCLT), Mumbai Bench, admitted the petition on October 17, 2017, and appointed an Interim Resolution Professional (RP). Subsequently, Satyanarayan Malu, the Respondent/Ex-Director of the Corporate Debtor, filed an application before the NCLT under Section 12A of the IBC for the withdrawal of the petition, based on a One Time Settlement (OTS) with Allahabad Bank, the sole Financial Creditor. The RP also filed an application for the approval of the Resolution Plan. On December 20, 2018, the NCLT allowed the

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## Issues and analysis

### Issue 1: Whether the reference to the Special Court established under Chapter XXVIII of the Companies Act, …

**Ratio:** When a statute refers to provisions of another statute, it can be either 'legislation by

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**Reasoning:** The Court reasoned that the reference in Section 236(1) of the IBC to the Special Court

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**Interpretation:** The Court interpreted that the reference to the Special Court in Section 236(1)

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**Application:** The Court applied the principle of 'legislation by incorporation' to the facts

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## Parties

- **Judges:** B.R. G…; SANDEEP…
- **Appellants:** Insolvency and…
- **Respondents:** SBM Paper Mills…; Satyanarayan…
- **Other parties:** Over Tu…

## Timeline

- **2017-09-04 — Petition…**: M/s. SBM Paper Mills Private Limited filed a petition under Section 10 of the IBC for…
- **2017-10-17 — Petition Ad…**: The NCLT, Mumbai Bench, admitted the petition and appointed an Interim Resolution…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 12A — (1) Subject to sub](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-12a)

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