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2018 (8) TMI 2126 - AT - Insolvency and BankruptcySeeking vacation/recall of admitting CIRP application - Appellant was wrongly kept out of the Committee of Creditors or not - HELD THAT - It is settled that no application for recall of any order of admission of application under Section 7 can be entertained by the Adjudicating Authority, it having no such jurisdiction. Even the party who has filed application cannot withdraw such application after the admission in view of regulation 8 of The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 . The Appellant, who is a Financial Creditor , also cannot claim to be an aggrieved person, if an application under Section 7 is admitted pursuant to application filed by other Financial Creditor. Appellant being a related party to the Corporate Debtor was not made the member of the Committee of Creditors, which order was also not challenged. The I. A. having filed by the Appellant with a motive to delay the process and being frivolous it was fit case for Adjudicating Authority to impose cost upon him while passing the order - appeal dismissed with costs.
Issues:
- Appeal against the rejection of an application by the Adjudicating Authority. - Exclusion of the Appellant from the Committee of Creditors. - Filing of an Interlocutory Application to recall/vacate the order admitting Corporate Insolvency Resolution Process. - Jurisdiction of the Adjudicating Authority to entertain a recall application. - Imposition of cost on the Appellant for filing a frivolous application. Analysis: The appeal was filed by 'M/s Stressed Assets Stabilization Fund' against the Adjudicating Authority's order rejecting their application in a case related to 'M/s Datre Corporation Ltd.' The Corporate Insolvency Resolution Process was initiated against the Corporate Debtor, and the Appellant, a related party to the Promoter, was excluded from the Committee of Creditors. The Appellant filed an Interlocutory Application seeking various reliefs, including recalling the order admitting the CIRP. The Adjudicating Authority noted the impending completion of the 180-day period and extended it for 90 days under the Insolvency and Bankruptcy Code, 2016, before dismissing the application on its merits. The Appellant contended that they were wrongly kept out of the Committee of Creditors and that the application under Section 7 of the I&B Code was improperly admitted. However, it was established that no application for recalling an order admitting an application under Section 7 could be entertained by the Adjudicating Authority due to lack of jurisdiction. The Appellant's failure to challenge the initial order before the Appellate Tribunal within the prescribed limitation period further weakened their position. Additionally, the Appellant, as a Financial Creditor, could not claim aggrieved status when another Financial Creditor's application was admitted. The Adjudicating Authority deemed the Appellant's Interlocutory Application as a deliberate attempt to delay the process and frivolous in nature. Consequently, the appeal was dismissed, and a cost of Rs.1 Lakh was imposed on the Appellant to be paid to the Registrar, National Company Law Appellate Tribunal, within 30 days. The imposition of costs was justified based on the circumstances surrounding the filing of the application and its impact on the insolvency resolution proceedings.
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