In Brief
Duncans Industries, a tea company whose management was notified to be taken over by the Central Government under the Tea Act 1953, challenged an operational creditor's insolvency petition filed under the Insolvency and Bankruptcy Code. The company argued that Section 16G(1)(c) of the Tea Act prohibits insolvency proceedings without Central Government consent. The Supreme Court held that IBC proceedings are distinct from winding up and the IBC—a subsequent consolidating statute—has overriding effect. Further, Section 16G applies only when management is actually taken over, not merely notified. Thus, insolvency proceedings under Section 9 of the IBC are maintainable without prior consent.
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