2017 (11) TMI 1896 - AT - Insolvency and Bankruptcy

Maintainability of appeal - appropriate forum or not - CIRP process - HELD THAT - After initiation of the 'Corporate Insolvency Resolution Process', the Resolution Professional objected the applicant-Export Import Bank of India ('Exim Bank' for short). While the appellant requested to allow it to continue as a member in the Committee of Creditors, in view of such objection, the appellant-Exim Bank preferred Company Appeal - After the matter was remitted to the Adjudicating Authority, the issue was not decided by the Adjudicating Authority in terms with the order of the Appellate Tribunal and the Adjudicating Authority remitted the matter to the Resolution Professional and Committee of Creditors to decide the application of the appellant, which was supposed to be decided by the Adjudicating Authority. For the said reason, the appellant-Exim Bank has challenged the order dated 27th October, 2017 whereby the Resolution Professional and Committee of Creditors have been asked to take collective decision. Thus, the final decision in terms of the order of this Appellate Tribunal dated 18th September, 2017 is to be taken by the Adjudicating Authority, which cannot abdicate its power by asking other authority to decide the question - the Adjudicating Authority is directed to decide the question as ordered by this Appellate Tribunal on 18th September, 2017 about the continuity of the Exim Bank as a member of the Committee of Creditors, immediately, preferably within three weeks, uninfluenced by the opinion if any submitted by the Resolution Professional and the Committee of Creditors.

Summary

Issues:
Corporate Insolvency Resolution Process under Insolvency and Bankruptcy Code - Continuity of Exim Bank as a member of Committee of Creditors - Decision-making authority between Adjudicating Authority, Resolution Professional, and Committee of Creditors.

Analysis:

1. Corporate Insolvency Resolution Process under I&B Code:
The judgment pertains to the initiation of a Corporate Insolvency Resolution Process against a Corporate Debtor, JEKPL Private Limited, under Section 10 of the Insolvency and Bankruptcy Code, 2016. The Resolution Professional raised objections against the Exim Bank, leading to a legal challenge by the Exim Bank to continue as a member in the Committee of Creditors.

2. Continuity of Exim Bank as a Member of Committee of Creditors:
The Appellate Tribunal, in its initial order, allowed the Exim Bank to provisionally continue as a member of the Committee of Creditors. However, the matter was remitted to the Adjudicating Authority for a final decision. Subsequently, the Adjudicating Authority failed to decide on the issue as per the Appellate Tribunal's order, prompting the Exim Bank to challenge the decision that asked the Resolution Professional and Committee of Creditors to collectively decide on the application.

3. Decision-making Authority Dispute:
The judgment addresses the dispute regarding the decision-making authority between the Adjudicating Authority, Resolution Professional, and Committee of Creditors. The Appellate Tribunal emphasized that the final decision on the Exim Bank's continuity in the Committee of Creditors must be taken by the Adjudicating Authority itself, without abdicating this power to other entities. The Adjudicating Authority was directed to make a decision promptly, within three weeks, independent of any reports submitted by the Resolution Professional or the Committee of Creditors.

4. Overall Determination by Adjudicating Authority:
The judgment concludes by leaving all questions for determination by the Adjudicating Authority initially. It clarifies that in case of an adverse decision, the aggrieved party can appeal before the Appellate Tribunal. The appeal was disposed of with specific directions for the Adjudicating Authority to decide promptly on the Exim Bank's membership in the Committee of Creditors.

In summary, the judgment focuses on the proper adjudication of the Corporate Insolvency Resolution Process, specifically addressing the issue of the Exim Bank's continuity in the Committee of Creditors and highlighting the decision-making authority's role in such matters.