Sabka Vishwas Scheme : Supreme Court Grants Relief To Company Which Missed Deadline Due To IBC Moratorium

No one can be expected to do the impossible, the Supreme Court remarked while granting relief to a company which could not avail the benefit of settlement of tax dues under “Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, due to moratorium imposed on it.Shekhar Resorts Limited was required to pay Rs.1,24,28,500/-. on or before 30.06.2020 for availing the benefit of “Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. It could not make the payment as (a moratorium was imposed under the provisions of the IBC. Moratorium under the IBC commenced on 11.09.2018 and continued upto 24.07.2020. As it could not obtain permission for payment of the dues post the lifting of the moratorium, the Company approached the High Court. The High court dismissed the 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 issue raised before the Apex Court in appeal was the following: Whether when it was impossible for the appellant to deposit the settlement amount in view of the bar and/or the restrictions 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. In that view of the matter, 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.", the bench of Justices M R Shah and B V Nagarathna said.Regarding the view that High Court shall not issue a direction contrary to the Scheme, the bench observed that it is not a case of extension of the Scheme by the High Court but a case of taking remedial measures."In a given case it may happen that a person who has applied under the Scheme and who was supposed to make payment on or before 30.06.2020, became seriously ill on 29.06.2020 and there was nobody to look after his affairs and therefore he could not deposit the amount; such inability was beyond his control and thereafter, immediately on getting out of sickness he tried to deposit the amount and/or approached the Court - can the Court close its eyes and say that though there may be valid reasons and/or causes for that person’s inability to make the payment, still no relief can be granted to him? There may be extra ordinary cases which are required to be considered on facts of each case. The Courts are meant to do justice and cannot compel a person to do something which was impossible for him to do"Allowing the appeal, the court 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.Case detailsShekhar Resorts Limited vs Union of India | 2023 LiveLaw (SC) 15 | CA 8957 OF 2022 | 5 Jan 2023 | Justices M R Shah and B V NagarathnaFor Appellant(s) Ms. Charanya Lakshmikumaran, AOR Ms. Apeksha Mehta, Adv. Ms. Mounica Kasturi, Adv. Mr. Karan Sachdev, Adv. Mr. Pranav Mundra, Adv. Ms. Bhavya Shukla, Adv. Ms. Falguni Gupta, Adv.For Respondent(s) Mr. Vikramjit Banerji, ASG Mr. M.K.Maroria AOR Ms. Niranjana Singh Adv Mr. Nachiketa Joshi Adv Mr. Rajan Kumar Choursia Adv Mr. Mohd Akhil Adv Mr. P.V. Yogeswaran Adv. Mr. Siddhartha Sinha, Adv. Mr. Shivam Singhania, Adv. Mr. Raman Yadav, AdvHeadnotesSabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - A company could not avail benefit of the Sabka Vishwas scheme as it was under moratorium under IBC - The Courts are meant to do justice and cannot compel a person to do something which was impossible for him to do - Directed that the payment of amount already deposited by the company be appropriated towards settlement dues under “Sabka Vishwas Scheme 2019 and the company be issued discharge certificate. Click here to Read/Download Judgment

Sabka Vishwas Scheme : Supreme Court Grants Relief To Company Which Missed Deadline Due To IBC Moratorium

Ashok KM

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