2018 (9) TMI 1886 - AT - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Section 7 of Insolvency Bankruptcy Code 2016 - HELD THAT - As the parties could not settle the matter and no other order required to be passed the appeal is dismissed. No cost.

Summary

Issues:
1. Maintainability of the appeal by the Corporate Debtor
2. Initiation of corporate insolvency resolution process under Section 7 of the Insolvency and Bankruptcy Code, 2016
3. Default on the part of the Corporate Debtor
4. Request for permission to file affidavit regarding payment of debts by shareholders/Directors
5. Review of the order dated 16.07.2018
6. Dismissal of the appeal

Issue 1: Maintainability of the appeal by the Corporate Debtor
The Appellate Tribunal noted that the appeal by the Corporate Debtor was not maintainable as per the decision of the Hon'ble Supreme Court in 'Innoventive Industries Ltd. Vs. ICICI & Anr.' The Tribunal, on 16.07.2018, declined to grant any relief due to the absence of infirmity in the impugned order where the corporate insolvency resolution process was initiated under Section 7 of the Insolvency and Bankruptcy Code, 2016 by the Financial Creditor. The Tribunal found that there was a continuous cause of action, and the application was not barred by limitation or laches.

Issue 2: Initiation of corporate insolvency resolution process under Section 7 of the Insolvency and Bankruptcy Code, 2016
The Appellate Tribunal acknowledged that a decree had been passed in favor of the Financial Creditor, and a recovery certificate had been issued, indicating a default on the part of the Corporate Debtor. Despite the request for permission to file an affidavit regarding the readiness of shareholders/Directors to pay the debts of the Financial Creditors and Operational Creditors, the Tribunal found the appeal on behalf of the 1st appellant Corporate Debtor to be not maintainable. The Tribunal granted an opportunity to the appellants but directed the continuation of the corporate insolvency resolution process initiated.

Issue 3: Default on the part of the Corporate Debtor
The Tribunal emphasized the default on the part of the Corporate Debtor, leading to the initiation of the corporate insolvency resolution process. The Tribunal considered the existing decree in favor of the Financial Creditor and the issuance of a recovery certificate as evidence of the default.

Issue 4: Request for permission to file affidavit regarding payment of debts by shareholders/Directors
The learned counsel for the Corporate Debtor sought permission to file an affidavit stating whether the shareholders/Directors were prepared to pay the debts of the Financial Creditors and Operational Creditors. The Tribunal granted this permission and provided an opportunity for the appellants to present their case.

Issue 5: Review of the order dated 16.07.2018
The Tribunal confirmed the finality of the order dated 16.07.2018 concerning the merit of the appeal, stating that it could not be reviewed. After the parties failed to settle the matter and no further orders were deemed necessary, the appeal was dismissed without costs.

Issue 6: Dismissal of the appeal
Ultimately, due to the failure of the parties to reach a settlement and the absence of any additional orders to be passed, the appeal was dismissed by the Appellate Tribunal without imposing any costs on either party.