A multiproduct company catering to applications in diverse sectors had borrowed from various financial institutions including Kundan Bank Ltd. A corporate debt restructure plan (CDR) was framed between 19 lenders and the

On a bare reading of the judgement of 'Innovative Industries Ltd. Vs ICICI Bank & another', it seems that the case involved more adjudication on grounds related to Constitutional Law than on the Code. This case related to the first-ever application filed for initiating insolvency proceedings under the new Code. The Court was cognizant of the fact and hence wanted to settle the law so that all 'Courts and Tribunals take notice of the paradigm shift in the Law'. The case involved contradictory provisions in the Code and a State law of State of Maharashtra, Maharashtra Relief Undertakings (Special Provisions) Act, 1958. This state law provided for overtaking of industries by the state by declaring them 'relief undertakings'. Such overtaking can be done through government notifications to that effect under the Act. This is done to protect employment of the people who are working in such an undertaking. The Code instead provides for overtaking of an undertaking's business by an 'Insolvency Professional' through a committee of creditors. In the instant case, insolvency application was filed against Innoventive Industries Ltd. which later claimed to be a relief undertaking under the Maharashtra Act. This brought the two legislation on a collision course, for the simple reason that enforcement of one will hinder the enforcement of the other. Supreme Court dealt with the constitutional law doctrine of repugnancy. This doctrine stems from the operation of Article 254 of the Constitution. As per this doctrine, whenever central and state laws are framed on the same subject and are contradictory to each other, it is the central law which prevails and the state law is rendered void. A plain reading of Article 254 gives an impression that if both central and state governments frame laws on a same entry under the concurrent list, only then the Central law will prevail. In the instant case, however, the laws even though coming in conflict with each other, were framed under different entries of the concurrent list. This involved an adjudication by the Supreme Court on this point. The National Company Law Tribunal (NCLT) had ruled that Innoventive Industries Ltd. can't claim any relief under Maharashtra Act. It also decided that there is no repugnancy between the two laws, as they operate in different fields. The appeal to the Supreme Court, hence involved two major questions. One was, whether the petitioner can seek relief under the Maharashtra Act at the cost of the Code. The second was, whether both the laws are repugnant to each other. Invoking a lot of international cases, especially of the Commonwealth countries and previous Judgments of the Supreme Court, the bench ruled that there is indeed repugnancy between the two laws. The court held that even if the two legislations are framed on different entries of the concurrent list, the Central law will always prevail if it comes in conflict with the State law. The State law, therefore was held inoperable to the extent that it was in contradiction to the Code. The court delved into great detail of the provisions of the Code and held it to be intended as an 'exhaustive legislation' by the Parliament, to cover the whole field of its operation. In such instances involving an exhaustive law, even though the State law may not be in strict violation of the code, it will even then be rendered inoperative to give way to implement the exhaustive law on the point. Therefore, the company will not succeed in its contentions.