Supreme Court

Shekhar Resorts Limited (Unit Hotel Orient Taj) vs. Union of India (UOI) and Ors.

MANU/SC/0015/2023

05.01.2023

Insolvency

Appellant cannot be punished for not doing something which was impossible for it to do

The original writ Petitioner has preferred the present appeal feeling aggrieved with the impugned judgment passed by the High Court by which the High Court has dismissed writ petition preferred by the Appellant seeking direction to the Respondents for consideration of the case of the Petitioner under the scheme “Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019” (“Scheme of 2019”)

By the impugned judgment and order, the High Court has dismissed the said writ petition on the grounds that (i) the High Court shall not issue a direction contrary to the Scheme; (ii) the relief sought cannot be granted as the Designated Committee under the Scheme is not existing.

The short question which is posed for consideration before present Court is, whether, when it was impossible for the Appellant to deposit the settlement amount in view of the bar under the IBC, the Appellant can be punished for no fault of the appellant?

The Appellant cannot be punished for not doing something which was impossible for it to do. There was a legal impediment in the way of the Appellant to make any payment during the moratorium. Even if the appellant wanted to deposit settlement amount within the stipulated period, it could not do so in view of the bar under the IBC as, during the moratorium, no payment could have been made. The Appellant cannot be rendered remediless and should not be made to suffer due to a legal impediment which was the reason for it and/or not doing the act within the prescribed time.

As the Appellant was not in a position to deposit the settlement amount at the relevant time, more particularly on or before 30.06.2020 due to legal impediment and the bar to make the payment of settlement amount in view of the mortarium under the IBC, and as it is found that the Appellant was otherwise entitled to the benefit under the Scheme as the Form No.1 submitted by the Appellant has been accepted, the Form No.3 determining the settlement amount has been issued, the High Court has erred in refusing to grant any relief to the appellant as prayed.

The impugned judgment and order passed by the High Court is quashed and set aside. It is directed that the payment of Rs.1,24,28,500 already deposited by the Appellant be appropriated towards settlement dues under “Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019” and the Appellant be issued discharge certificate. Appeal allowed.

Tags : Payment Scheme Direction

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