Tribunal Had No Jurisdiction To Direct Functioning Of Windmill Without Forest Clearances: Karnataka HC While Setting Aside NCLT’s Order
The Karnataka High Court has set aside the order passed by the NCLT (National Company Law Tribunal) holding that the Tribunal had no jurisdiction to direct the functioning of the windmill without the forest clearances merely because the State had granted such permission at an earlier point in time.
A Single Bench of Justice M. Nagaprasanna said, “… the Company could not have knocked at the doors of the Tribunal as it completely falls beyond the purview of the Code, being in the realm of public law, since the State has exercised its jurisdiction in drawing up the proceedings and directing forest clearances to be submitted by the corporate debtor, the petitioner, in exercise of powers conferred under the statute. Therefore, they are in the realm of public law. The Tribunal had no jurisdiction to direct functioning/continuing of the windmill without the forest clearances, merely because the State had granted such permission at an earlier point in time.”
The Bench noted that the Tribunal cannot exercise its jurisdiction over matters de hors insolvency proceedings, since the matter falls outside the realm of the Insolvency and Bankruptcy Code.
AAG Dhyan Chinnappa and AGA Shwetha Krishnappa represented the petitioners while Senior Advocate K.G. Raghavan and Advocate Ajay J. Nandalike represented the respondent.
The petitioner was the Principal Chief Conservator of Forests, Government of Karnataka which called in question an order passed by the NCLT, Ahmedabad on an application filed under Section 60 of the Insolvency and Bankruptcy Code, 2016 (IBC). The respondent was a company that was granted a lease by the Karnataka Renewable Energy Development Corporation Limited in respect of land measuring 221.80 Hectares under a lease deed and thereafter it applied for renewal of the lease in 2020 which was pending.
Meanwhile, the company took permission to start a windmill, and the permission was given subject to the clearance of the Forest Department. However, the State Government suspended operations of the windmill in the year 2022 as the forest clearances were not placed before it which the company did not challenge and then approached the NCLT, and therefore, the tribunal ordered the state government to permit the functioning of the windmill.
The High Court in view of the facts and circumstances of the case asserted, “Following the judgment in the case of GUJARAT URJA VIKAS NIGAM LIMITED the Apex Court holds that the Tribunal cannot overstep its jurisdiction. … The proceedings are that the Company has been taking undue advantage of indulgence of the State and has not taken any steps to submit a complete forest clearance proposal for renewal of the lease and has been continuing with the operation on ad hoc basis. This is communicated to the Company by the Forest Department on 07-05-2022.”
The Court said that none of the contentions of the counsel for the company would merit acceptance and that it is open to the company to produce all the necessary clearances as sought by the State if the company wants to continue with the operations.
“The submission of the learned senior counsel for the Company is that if the State had passed an order, then the Tribunal would have no jurisdiction. According to him, the one that is passed is not an order. The said submission is noted only to be rejected, as it is a communication from the hands of the State and it is understood by the Company also to be an order only, as the averments in the application filed before the Tribunal demolishes the contention of the learned senior counsel for the Company”, observed the Court.
The Court, therefore, held that in the event, the company would furnish its documents for forest clearances, it is open for the State to consider the same and pass appropriate orders in accordance with the law.
Accordingly, the Court allowed the plea and quashed the order of the NCLT.
Cause Title- The Principal Chief Conservator of Forests & Ors. v. M/s. Wind World (India) Ltd.