2017 (8) TMI 1348 - Tri - Companies Law

Corporate Insolvency Resolution Process - Company petition maintainability - eligibility to file a petition under IBC, 2016 - Held that - Since the petitioner Company already suffered Liquidation order passed by the Hon ble High court which is still subsisting, the present petition is also not maintainable under section 11(d) of IBC, 2016, as extracted above. Apart from that, as stated supra, the Financial Creditors/Banks of company have already initiated several steps to recover their dues as explained by the Bank in their Affidavits. The filing of present Company Petition is nothing but gross abuse of process of law enacted by the IBC, 2016. The entire act has to be read together to come to a conclusion with regard to admission of a case under IBC is concerned, and it cannot be simply based on technical reading of the concerned provisions of IBC. Hence, it is not a fit case for admission, and is liable only to be dismissed with costs

Summary

Issues Involved:
1. Maintainability of the Company Petition under IBC 2016.
2. Impact of prior winding-up order by the High Court.
3. Actions taken by financial creditors under SARFAESI Act.

Issue-wise Detailed Analysis:

1. Maintainability of the Company Petition under IBC 2016:
The primary issue for consideration was whether the Company Petition filed under Section 10 of the Insolvency and Bankruptcy Code (IBC) 2016 by M/S. AMEYA LABORATORIES LIMITED (ALL) was maintainable. The Tribunal examined whether the petitioner was justified in maintaining the petition under IBC given the backdrop of the company's financial distress and prior legal proceedings. The Tribunal noted that the petitioner could technically file the present petition due to the abatement of BIFR proceedings following the repeal of the Sick Industrial Companies (Special Provisions) Act, 1985. However, the Tribunal emphasized that eligibility alone was insufficient; the petitioner must also approach the judicial forum with clean hands and not misuse the judicial process.

2. Impact of Prior Winding-up Order by the High Court:
The Tribunal highlighted that the Hon'ble High Court had already passed a winding-up order for the petitioner company on April 20, 2015, at the instance of M/S. Elder Pharmaceuticals Limited. This order was still subsisting, and the petitioner had not successfully set aside this winding-up order despite filing an application before the Division Bench of the High Court. The Tribunal underscored that the stay order dated August 19, 2015, did not amount to setting aside the winding-up order. Hence, under Section 11(d) of IBC, the present petition was not maintainable as a liquidation order had already been made against the corporate debtor.

3. Actions Taken by Financial Creditors under SARFAESI Act:
The Tribunal considered the actions taken by financial creditors, including Kotak Mahindra Bank Ltd., IDBI Bank Ltd., and the Development Credit Bank, under the SARFAESI Act, 2002. These creditors had initiated recovery proceedings and had taken significant steps, including the sale of secured assets, to recover their dues. The Tribunal noted that the financial creditors, constituting more than 75% of the creditors in value, had resolved to oppose the present petition. The Tribunal found that the petitioner had not disclosed these ongoing recovery actions and had approached the Tribunal with contradictory stands, which was impermissible under law.

Conclusion:
The Tribunal concluded that the present Company Petition was not maintainable under IBC 2016 due to the existing winding-up order and ongoing recovery actions by financial creditors. The Tribunal emphasized that the IBC could not be misused to scuttle other legally initiated proceedings. Consequently, the Company Petition bearing CP No. CP (IB)/50/10/HDB/67 was dismissed, with no order as to costs.