Guari Ferros Pvt. Ltd. (GFPL), a mining company based in Madhya Pradesh, held a mining lease over 500 hectares of iron ore-rich land. The lease was granted under the Mines and Minerals (Development and Regulation) Act, 1

The issue in this case revolves around whether the moratorium under Section 14 of the IBC, 2016, prevents a State Government from rejecting the extension of a mining lease during CIRP, and whether NCLT/NCLAT has jurisdiction over such sovereign decisions. Relevant Case Law: The present case is similar to the Supreme Court's decision in M/s Embassy Property Developments Pvt. Ltd. Vs. State of Karnataka and Others [2019 SCC Online SC 1542] . Facts of the case: In this case, one of the issues before the Supreme Court was whether the Adjudicating Authority (AA) had the power under the Insolvency and Bankruptcy Code, 2016 to review the order passed by the Government of Karnataka during the moratorium period, rejecting the auto extension of a mining lease granted by it to the Corporate Debtor. Supreme Court's Observation: The Supreme Court observed, among other things, that the moratorium under section 14 did not impact the right of the government to refuse extension of the lease. It observed that the purpose of section 14 was to preserve the status quo and not to create a new right. Even section 14(1)(d) of the IBC, 2016 prohibits, during the period of moratorium, the recovery of any property by the owner/ lessor will not go to the rescue of the corporate debtor since what is prohibited is only right not to be dispossessed, but not the right to have renewal of the lease of such property. It was further observed that this right not to be dispossessed will have nothing to do with the rights conferred by a mining lease especially on government land. It was noted that what was granted to the Corporate Debtor was not an exclusive possession of the land in question so as to enable the RP to invoke section 14(1)(d) of the Insolvency and Bankruptcy Code, 2016. Conclusion regarding IRP's arguments: Hence, the arguments put forward by the IRP of Guari Ferros Pvt. Ltd. were not tenable. The State Government lawfully rejected the lease extension during an active CIRP, as the decision to grant or refuse a lease extension under the MMDR Act is a sovereign function and does not fall under the purview of the moratorium under Section 14 of the IBC. The NCLT and NCLAT are specialist forums dealing with insolvency-related issues, but they do not have jurisdiction over matters that arise under public law, such as disputes involving state authorities, unless expressly provided.