Can a tribunal overrule a state government’s order, such as the need to get the forest department’s clearance for a project? No, says Justice M Nagaprasanna of the High Court of Karnataka, Bengaluru, in a case between the Principal Conservator of Forests, Karnataka, and Wind World India Pvt Ltd, an insolvent wind turbine manufacturer.

Wind World India had been operating a wind farm on a 222-ha forestland leased to it by the Karnataka Renewable Energy Development Corporation Ltd. The 15-year lease expired in June 2018. In January 2020, the company applied for a licence renewal, which was granted subject to the condition that the company would secure the forest department’s clearance. When the state government noticed in May 2022 that the company was operating its wind turbines without forest clearances, it ordered suspension of the operations.

The company — which had declared itself insolvent under Section 14 of the Insolvency and Bankruptcy Code (IBC) — approached the National Company Law Tribunal (NCLT), Bengaluru bench, which quashed the suspension. The tribunal’s action became a subject matter for examination by the Karnataka High Court.

The court ruled that the state government’s suspension of Wind World’s operations in the absence of forest department clearance fell 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,” Justice Nagaprasanna ruled. The judge drew support from a Supreme Court ruling in the case of Embassy Property Developments vs State of Karnataka that said: “The NCLT, being a creature of a special statute to discharge certain specific functions, cannot be elevated to the status of a superior court having the power of judicial review over administrative action.”

Justice Nagaprasanna, also citing a similar apex court verdict in Gujarat Urja Vikas vs Amit Gupta, noted that “the tribunal cannot exercise its jurisdiction over matters de hors insolvency proceedings, since the matter falls outside the realm of the code.”