2019 (4) TMI 2081 - AT - Insolvency and Bankruptcy

Initiation of Corporate Insolvency Resolution Process - Financial Creditors - HELD THAT - There are no opinion, till it is made known that any of the applicant is a 'Financial Creditor' or 'Operational Creditor' but not an allottee. In such cases, the application by non-allottee under Sections 7 or 9 may not wait the decision of the Hon'ble Supreme Court wherein the question of the Explanation below of Section 5(8) is under consideration. The appeal is adjourned - Place this appeal for orders on 15th May, 2019.

Summary

Issues:
1. Effect of a Supreme Court order on the proceedings.
2. Intervention applications by allottees.
3. Stay orders by the Supreme Court on certain proceedings.
4. Proceedings pending before the Adjudicating Authority.
5. Clarification on the status of pending petitions.

Analysis:
1. The Appellant referred to a Supreme Court order setting aside proceedings initiated by an individual, making the present appeal irrelevant.
2. Numerous allottees filed intervention applications, some seeking Corporate Insolvency Resolution Process against the Corporate Debtor, leading to pending petitions and notices issued for the same.
3. The Supreme Court stayed proceedings for certain allottees, while others, not party to the writ petition, had their Company Petitions continue without a stay order.
4. The Tribunal noted that the Adjudicating Authority could proceed with cases lacking a Supreme Court stay order, even if the Appellant's counsel argued for a stay based on the writ petition's interim order.
5. The Tribunal deferred expressing an opinion until determining if any applicant was a Financial or Operational Creditor rather than an allottee, especially in cases under Sections 7 or 9 awaiting the Supreme Court's decision on Section 5(8) Explanation. The appeal was adjourned for clarification on pending petitions not involved in the writ petition.

This judgment primarily addressed the impact of Supreme Court orders on ongoing proceedings, the intervention of allottees in insolvency processes, and the need for clarity on the status of pending petitions before the Adjudicating Authority, emphasizing the distinction between allottees and creditors in insolvency applications.