2019 (3) TMI 1905 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - rejection on the ground that the applicant is not Body Corporate - existence of debt and dispute or not - HELD THAT - It is not in dispute that the Respondent is a society registered under Act XXI of 1860. The provisions of the AP Societies Registration Act, 2001 shall be Applicable to the Societies that are registered thereunder. The Respondent is not a body Corporate and hence, the Present Petition is not maintainable under IB Code. Petition dismissed.

Summary

Issues:
1. Maintainability of the petition under Section 7 of the Insolvency and Bankruptcy Code (IBC) against the respondent.

Analysis:
The petitioner filed a petition under Section 7 of the IBC against the respondent for defaulting on a significant amount, including interest. However, before delving into the merits of the case, the respondent raised a preliminary objection regarding the maintainability of the application under the provisions of the IBC. The petitioner argued that the respondent, being a society governed by the AP Societies Registration Act, 2001, should be considered a corporate person under the IBC. On the other hand, the respondent contended that it was registered under the Societies Registration Act, 1860, and did not fall under the purview of the IBC as it was not a body corporate but an unincorporated body.

The respondent emphasized that societies registered under the AP Societies Registration Act, 2001, were conferred the status of a body corporate, unlike those registered under the Act of 1860. The respondent supported its argument by citing a judgment of the High Court of Andhra Pradesh in a relevant case. After hearing both parties, the tribunal considered whether the application under Section 7 of the IBC was maintainable. It was noted that the respondent, being registered under the Act of 1860, did not have the status of a body corporate as provided under the AP Societies Registration Act, 2001.

Based on the legal interpretation and the precedent cited, the tribunal concluded that the respondent was not a body corporate and therefore held that the petition was not maintainable under the IBC. Consequently, the company petition was dismissed as not maintainable, with no order as to costs being issued.