Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
Reserved on: 20 October, 2023
th
Pronounced on: 07 November, 2023
+ LPA 717/2023
RAINBOW DIGITAL SERVICES PVT LTD THROUGH
DIRECTOR & ANR. ..... Appellants
Through: Mr. Manoj Kumar Garg, Advocate
versus
UNOIN OF INDIA THROUGH SECRETARY MINISTRY OF
COMMUNICATIONS & ORS. ..... Respondents
Through: Mr. Rahul Sharma, CGSC with Mr.
Vinod Tiwari, Advocates.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJEEV NARULA
JUDGMENT
SANJEEV NARULA, J:
CM APPL. 55070/2023 ( delay in filing the appeal )
1. For the grounds and reasons stated therein, the application is allowed
and the delay in filing the appeal is condoned.
2. Disposed of.
LPA 717/2023, CM APPL. 55071/2023, CM APPL. 55072/2023
th
3. The present appeal is directed against judgment dated 07 August,
2023 (“ Impugned Judgment ”) passed by the learned Single Judge of this
Court dismissing the underlying writ petition being W.P.(C) 10042/2023.
4. Briefly put, Appellant No. 1-Company, acting through Appellant No.
2, its Director/ Authorized Signatory, is the second assignee of certain assets
Signature Not Verified
Digitally Signed
By:SAPNA SETHI
Signing Date:07.11.2023
15:24:09
LPA 717/2023 Page 1 of 7
of a company undergoing liquidation, i.e., Growthways Trading Private
Limited (“ GTPL ”), before the National Company Law Tribunal (“ NCLT ”).
Said assets, includes outstanding dues owed by the Department of Post to
GTPL. The aforesaid writ petition came to be filed by the Appellant seeking,
remittance of the outstanding dues as also directions against Department of
Posts for violation of Section 37 of the Indian Post Office Act, 1898 (“ Act ”)
– pertaining to undelivered postal articles. By way of the Impugned
Judgment, the learned Single Judge declined to entertain the writ petition,
observing that the issue raised in the writ petition was pending consideration
before the NCLT.
Background
5. The background of the grievance as laid out in the present appeal is as
under:
th
5.1. On 17 December, 2019, GTPL was admitted into insolvency and an
Interim Resolution Professional (“ IRP ”) was appointed by the NCLT. Upon
examination of GTPL’s records, the IRP found that were orders/
consignments sent through Department of Posts which had been neither
delivered to customers nor returned to origin, and there were also orders
which had been delivered and for which COD amount stood collected. In
respect of these orders/ consignments, a sum of Rs. 57,80,065/- was found to
be pending from the Department of Post.
5.2. In July, 2020, the IRP wrote to the Chief General Manager of
Respondent No. 3 [Department of Post, Postal Directorate, Dak Bhavan,
New Delhi] seeking remittance of the outstanding amount. On lack of a
response thereto, the IRP sent communications to Respondent No. 4 [Senior
Superintendent of Post Offices, Department of Post, Chanakyapuri, New
Signature Not Verified
Digitally Signed
By:SAPNA SETHI
Signing Date:07.11.2023
15:24:09
LPA 717/2023 Page 2 of 7
Delhi – hereinafter referred to as “ SSPO ”] in November, 2020, regarding
the pending remittance. Initially, the SSPO responded seeking time to
respond, but thereafter, re-directed the grievance to the Air Mail Sorting
Division, New Delhi of Respondents No. 3 and 4. Thereafter, in December,
2020, the IRP reached out to the SSRM, Air Mail Sorting Division of
Respondent No. 4, in relation to the dues. In response, the IRP was informed
that all eligible postal articles stood paid and compensated, as the case may
th
be, to GTPL. Pursuant thereto, a legal notice dated 27 March, 2021 was
sent on behalf of the IRP, to Respondent No. 4, demanding payment of the
aforementioned dues, however, it bore no fruit, and Respondent No. 4
simply re-iterated their earlier response.
5.3. The IRP filed an application (I.A. No. 4848/2021 in C.P. NO. (IB).
1443/ND/2019) before the NCLT under Section 60(5) of Insolvency and
Bankruptcy Code, 2016 (“ IBC ”) against Respondent No. 4 seeking
directions for recovery of the outstanding amount. Meanwhile, GTPL went
nd
into liquidation in terms of order dated 02 November, 2021 and the IRP
was appointed as the Liquidator. Subsequently, the NCLT issued notice to
th
Respondent No. 4 in I.A. No. 4848/2021, by way of order dated 20
December, 2021. Copy thereof was communicated to Respondent No. 4 by
th
IRP’s counsel, vide letter dated 27 December, 2021.
th
5.4. On 28 June, 2022, in a meeting convened between the Stakeholders
Consultation Committee of GTPL, it was resolved to assign, through
auction, all identified Not Readily Realizable Assets (“ NRRAs ”) of GTPL,
which included the outstanding dues from the Department of Posts – as per
Regulation 37A of the Insolvency and Bankruptcy Board of India
(Liquidation Process) Regulations, 2016. Mr. Jatin Nagpal emerged as the
Signature Not Verified
Digitally Signed
By:SAPNA SETHI
Signing Date:07.11.2023
15:24:09
LPA 717/2023 Page 3 of 7
highest bidder and a deed of assignment in respect of GTPL’s NRRAs was
th
executed by the Liquidator, in his favour, on 05 August, 2022.
5.5. Subsequently, on an application filed by the Liquidator, Mr. Jatin
Nagpal was substituted as the Applicant in I.A. No. 4848/2021 in light of the
assignment. Upon being unable to realise the NRRAs himself, Mr. Nagpal
th
assigned the same to the Appellants vide Deed of Assignment dated 07
February, 2023.
5.6. Appellant submits that despite a multitude of representations seeking
remittance of the outstanding dues and acknowledgment of the said amounts
in various correspondence, Respondent No. 4 showed reluctance to address
the issue of payment of outstanding dues, and in fact, complaints/ grievances
were needlessly and deliberately directed to different departments.
6. In the aforenoted circumstances, the Appellant preferred the
underlying writ petition, which was disposed of through the Impugned
Judgment wherein the Court had held as under:
“3. Learned Counsel for. the Petitioner contends that Section 37 of the
Indian Post Office Act, 1898 stipulates that every undelivered postal article
after detained in the post office for a period prescribed under Section 37,
shall be either forwarded free of further charge to the post office at which it
was posted or returned to. the sender or returned to the office of the
Postmaster General.
4. It is stated that several articles sent by Growthways Trading
Private Limited were neither delivered to the customers nor returned to the
origin RTO and, therefore, the consignment was realizable and we
classified as NRRA which now stands assigned to the Petitioner herein.
Learned Counsel states that the Petitioner has no other remedy other than
approaching this Court by invoking jurisdiction under Article 226 of the
Constitution of India for recovery of the amount.
5. As stated above, Mr. Jatin Nagpal, from whom the Petitioner had
taken the assignment, has already filed an application under Section 60(5)
of Code and as the IRP has already moved an application under Section
60(5) of the IBC Code seeking direction for the recovery of the amount by
the Corporate Debtor along with supporting affidavit, notices have been
issued on the said application and the same is pending disposal before the
Signature Not Verified
Digitally Signed
By:SAPNA SETHI
Signing Date:07.11.2023
15:24:09
LPA 717/2023 Page 4 of 7
NCLT.
6. Heard learned Counsel for the parties and perused the material on
record.
7. At this juncture, it is necessary to extract Section 60(5) of the
Insolvency & Bankruptcy Code, 2016 and Regulation 37A of the Insolvency
& Bankruptcy Board of India (Liquidation Process) Regulation, 2016 and
the same reads as under:-
“ 60. (5) Notwithstanding anything to the contrary contained in
any other law for the time being in force, the National Company
Law Tribunal shall have jurisdiction to entertain or dispose of-
(a) any application or proceeding by or against the corporate
debtor or corporate person;
(b) any claim made by or against the corporate debtor or
corporate person, including claims by or against any of its
subsidiaries situated in India; and
(c) any question of priorities or any question of law or facts,
arising out of or in relation to the insolvency resolution or
liquidation proceedings of the corporate debtor or corporate
person under this Code.”
“ 37A. Assignment of not readily realisable assets.
37A. (1) A liquidator may assign or transfer a not readily
realisable asset through a transparent process, in consultation
with the stakeholders’ consultation committee in accordance
'with regulation 31A, for a consideration to any person, who is
eligible to submit a resolution plan for insolvency resolution of
the corporate debtor.
Explanation - For the purposes of this sub-regulation, “not
readily realisable asset” means any asset included in the
liquidation estate which could not be sold through available
options and includes contingent or disputed assets and assets
underlying proceedings for preferential, undervalued,
extortionate credit and fraudulent transactions referred to in
sections 43 to 51 and section 66 of the code.”
8. A perusal of the above Sections and Regulation shows that the IRP
has already approached the NCLT for the purpose of realisation of the
NRRA. Under Regulation 37A of the Insolvency & Bankruptcy Board of
India (Liquidation Process) Regulation, 2016, the NRRA was put on auction
which was purchased by M. Jatin Nagpal, who has impleaded himself as the
successor in interest of the IRP.
9. The Petitioner has now stepped into the shoes of Mr. Jatin Nagpal.
Since the issue is pending before the NCLT, it was not open for the
Signature Not Verified
Digitally Signed
By:SAPNA SETHI
Signing Date:07.11.2023
15:24:09
LPA 717/2023 Page 5 of 7
Petitioner to approach this Court under Article 226 of the Constitution of
India for recovery of the amount.
10. The Petitioner has no other option but to move an application
before the NCLT substituting Mr. Jatin Nagpal and pursue his remedy there.
This Court, therefore, is not inclined to interfere in the present case
exercising its jurisdiction under Article 226 of the Constitution of India
when parallel proceedings for the very same relief are being pursued the
NCLT.
11. The writ petition is dismissed along with pending application(S), if
any.”
Appellant’s Contentions
7. By way of the present appeal, Mr. Manoj Kumar Garg, counsel for
Appellants, assails the Impugned Judgment on following grounds:
7.1. It has been erroneously held that it was not open for the Petitioner to
approach this Court under Article 226 of the Constitution of India for
recovery of the amount in-question.
7.2. The Impugned Judgment fails to appreciate that Respondent Nos. 2 to
4 violated Section 37(3) of the Act in dereliction of their duties, by not
delivering the orders/consignments to the customers nor returning back said
orders/consignments to the origin, in terms of the said provision.
7.3. The Impugned Judgment has incorrectly relied upon the fact that
similar relief has been prayed before the NCLT by the Ex-Resolution
Professional/ Current Liquidator appointed for GTPL.
7.4. The Impugned Judgment did not take into account that the
Respondent Nos. 2 to 4 have committed dereliction of duty by not remitting
the amount in-question.
Analysis
8. We have considered the aforenoted contentions and perused the
documents on record. The learned Single Judge dismissed the petition
Signature Not Verified
Digitally Signed
By:SAPNA SETHI
Signing Date:07.11.2023
15:24:09
LPA 717/2023 Page 6 of 7
holding that it was not open for the Petitioner to invoke the jurisdiction of
this Court under Article 226 of the Constitution of the India for recovery of
outstanding dues, as the proceedings in respect of the same are already
pending consideration before the NCLT.
9. It has not been disputed before us that the issue of remittance of
outstanding dues from the Department of Post is currently pending before
the NCLT. Further, notice already stands issued to Department of Posts in
respect of the application moved qua the dues. As such, we fail to
understand the reasons holding back the Appellant from campaigning its
cause before the NCLT. In our considered opinion, no fault can be found in
the view taken by the learned Single Judge. We find no reason for this Court
to exercise its extraordinary writ jurisdiction at this stage to parallelly
consider the question of realisation of the NRRA in-question. That apart, the
issue of remittance of outstanding dues by the Department of Posts is
interconnected to the allegations of violation of Section 37(3) of the Act.
Given the former is yet to be decided by NCLT, we are not inclined to delve
into the allegations of violation of the Act.
10. In view of the above, there is no merit in the present appeal and
accordingly the same is dismissed along with pending applications.
SANJEEV NARULA, J
SATISH CHANDRA SHARMA, CJ
NOVEMBER 07, 2023 / nk
Signature Not Verified
Digitally Signed
By:SAPNA SETHI
Signing Date:07.11.2023
15:24:09
LPA 717/2023 Page 7 of 7