2019 (1) TMI 1646 - Tri - Insolvency and Bankruptcy

Admissibility of application - initiation of CIRP - Default in repayment of dues - HELD THAT - The appeal has been considered on merit and the same has been dismissed. How this application has been filed is not understood. It is in fact a whole some misuse of the process of the Insolvency Bankruptcy proceeding as there cannot be any stay of CIRP proceedings after admission unless there is settlement between the parties with due approval of the CoC by 90% voting share as is provided in Section 12(A) of the Insolvency Bankruptcy Code. The application is dismissed with cost of ₹ 25,000/- to be deposited in the Prime Minister Relief Fund within four weeks.

Summary

Issues:
1. Recall of order of admission dated 13.06.2018 challenged in appeal.
2. Validity of Assignment Agreements dated 21st July, 2014 and 17th April, 2015.
3. Disputed debt and default in payment by Corporate Debtor.
4. Jurisdiction to examine genuineness of Assignment Agreement.
5. Allegations of fraud and objection under Section 65 of the Code.
6. Relationship between NPA provisions and SARFAESI Act, 2002.
7. Misuse of the process of Insolvency & Bankruptcy proceedings.
8. Stay of Corporate Insolvency Resolution Process (CIRP) proceedings.

Analysis:
1. The Tribunal considered the prayer for recalling the order of admission dated 13.06.2018, which was challenged in appeal. The Appellate Tribunal dismissed the appeal on the grounds that the Corporate Debtor did not dispute the debt due and default in payment. The Appellate Tribunal clarified that the genuineness of the Assignment Agreement dated 17th April, 2015 could not be questioned unless raised by the Corporate Debtor under Section 65 of the Code. The appeal was dismissed, emphasizing that the NPA provisions are unrelated to the Insolvency & Bankruptcy Code.

2. The Tribunal highlighted that the appeal was considered on merit and dismissed, questioning the filing of the application for recall. It was deemed a misuse of the insolvency process as there can be no stay of CIRP proceedings post-admission without a settlement approved by 90% voting share of the CoC under Section 12(A) of the Code. Consequently, the application was dismissed with a cost of ?25,000 to be deposited in the Prime Minister Relief Fund within four weeks, with a requirement to produce the receipt failing which appropriate action would be initiated.

3. The judgment concluded by disposing of the case, emphasizing the misuse of the process and the inability to stay CIRP proceedings post-admission without proper approval. The Tribunal's decision highlighted the importance of following the statutory provisions and the necessity for parties to adhere to the prescribed procedures in insolvency proceedings to maintain the integrity and efficiency of the process.