2019 (6) TMI 1568 - Tri - Insolvency and Bankruptcy

Maintainability of petition - time limitation - revocation of CIRP process in progress - whether an application is entertainable before this Bench after the petition has been admitted by this Bench and when CIRP is in progress? - HELD THAT - On careful reading of Section 60(5) of the Code, it is no doubt true that jurisdiction has been conferred upon this Adjudicating Authority to entertain or dispose of an application against the corporate debtor or by the corporate debtor, but it does not mean that this jurisdiction conferment is to re-examine the admission order already passed by this Bench. It is a settled preposition of law unless review power is conferred upon any authority, no forum is competent enough to review final orders. Though it is an admission order in respect to initiation of CIRP, it is a final order. For this order being final, this Adjudicating Authority will not have any jurisdiction to re-open the order under the cover of Section 60(5) of the Code. This is a provision conferred upon jurisdiction upon the Adjudicating Authority to examine the applications that are filed either by the Corporate Debtor or corporate person or any other person in respect to the issues that have come up during the CIRP or during liquidation but not to assail the admission order already passed - As to review jurisdiction is concerned, it is a statutory right that is given to the Court, therefore, Court especially the Adjudicating Authority cannot assume or appropriate jurisdiction which has not been explicitly provided under the Code. For review jurisdiction not being given, section 60 (5) of the Code cannot be read as the provision providing review jurisdiction to this Bench. Therefore, we are of the view that this application is bereft of any jurisdiction. Application dismissed.

Summary

Issues:
Application filed under Section 60(5) of the Insolvency & Bankruptcy Code, 2016 to examine the limitation point after admission of the petition.

Analysis:
1. The application filed under Section 60(5) of the Code sought to challenge the admission of the Company Petition by the Promoter-Directors after the Honorable Supreme Court kept the point of limitation open in a related case. The argument was that the Company Petition should be dismissed as it was barred by limitation due to the default declared by the Financial Creditor three years before the petition was filed.

2. The Financial Creditor had filed the Section 7 Petition against the Corporate Debtor, which was admitted without the limitation point being raised by the Promoter-Directors. The CIRP process had already been initiated, and Resolution Plans were under consideration by the CoC.

3. Despite subsequent appeals and reviews filed by the shareholders of the Corporate Debtor, including before the Honorable NCLAT and the Supreme Court, the limitation point was not successfully raised. The Supreme Court dismissed the appeals, keeping the point of limitation open for future proceedings.

4. The Promoter-Directors then filed the present application under Section 60(5) of the Code, arguing that the Adjudicating Authority had the power to examine the limitation point based on the Supreme Court's order.

5. The main issue before the Bench was whether such an application was maintainable after the admission of the petition and during the ongoing CIRP process.

6. The Bench emphasized that once a petition under Section 7, 9, or 10 of the Code is admitted, it constitutes a final order, and the remedy of appeal under Section 61 is provided by the Statute. The availability of this remedy had been utilized in the case at hand.

7. The Bench noted that the Adjudicating Authority did not have the power to review its own admission order under the guise of Section 60(5) of the Code. The inherent power vested in the Authority did not extend to re-examining an already passed admission order.

8. It was clarified that Section 60(5) of the Code conferred jurisdiction on the Adjudicating Authority to address issues arising during the CIRP or liquidation, not to challenge admission orders. Review jurisdiction being a statutory right, the Authority could not assume review powers not explicitly provided for in the Code.

9. Ultimately, the application was dismissed as misconceived, with the Bench highlighting that the Promoter-Directors had not raised the limitation point during the initial litigation proceedings, and the application did not have jurisdiction under Section 60(5) of the Code.