2022 (12) TMI 1411 - HC - Insolvency and Bankruptcy

Appointment of Interim Resolution Professional - HELD THAT - Learned senior counsel has referred to the proceedings dated 08.08.2022, wherein Mr. B.C. Bhandari of SREI Infrastructure Finance Ltd. appeared in those proceedings. It is further submitted that while hearing the arguments, before passing the impugned order, this fact was brought to notice of NCLT, Chandigarh that proceedings are already pending before NCLT, Mumbai Bench with regard to framing of a scheme for the purpose of ascertaining the claim of the creditors and said case is now listed for 25.01.2023. It is also submitted that there is every possibility that the entire settlement may be arrived in those proceedings. Notice of motion for 07.02.2023.

Summary

Issues:
Petition for issuance of a writ of certiorari to quash the order appointing Interim Resolution Professional.

Analysis:
The petition before the High Court sought the issuance of a writ of certiorari to quash the order passed by the NCLT, Chandigarh Bench appointing an Interim Resolution Professional. The petitioner's senior counsel argued that the NCLT, Mumbai Bench had already appointed Justice P.N. Deshmukh (Retd.) of Bombay High Court as the chairperson for conducting a meeting of 13 Financial Creditors, including the respondent SREI Infrastructure Finance Ltd. The petitioner highlighted that proceedings were underway in Mumbai to ascertain the creditors' claims and a settlement might be reached there. The High Court took note of these submissions and scheduled a notice of motion for further proceedings on 07.02.2023. The operation of the impugned order was stayed, contingent upon the petitioner filing an additional affidavit detailing efforts made to settle the creditors' claims.

This case involves a jurisdictional conflict between the NCLT benches in Mumbai and Chandigarh regarding the appointment of a chairperson to ascertain creditors' claims. The petitioner argued that the Mumbai Bench was actively engaged in proceedings to frame a settlement scheme, indicating a potential resolution of claims. The High Court acknowledged the ongoing proceedings in Mumbai and stayed the operation of the order appointing the Interim Resolution Professional, pending further submissions by the petitioner. The Court's decision to grant a stay reflects a cautious approach to avoid conflicting orders and to allow for a potential settlement to be reached in the Mumbai proceedings.

The High Court's decision to stay the operation of the order appointing the Interim Resolution Professional demonstrates a recognition of the proceedings initiated by the Mumbai Bench to ascertain creditors' claims and potentially reach a settlement. By scheduling a notice of motion for further proceedings, the Court aims to gather additional information on the efforts made to settle the claims. This approach indicates a willingness to consider the broader context of the case and the potential impact of conflicting orders from different NCLT benches. The stay order reflects a prudent step to maintain the status quo while awaiting developments in the Mumbai proceedings, emphasizing the importance of coordination and coherence in insolvency proceedings.