2017 (8) TMI 1018 - AT - Insolvency and Bankruptcy

Petition under Insolvency and Bankruptcy Code, 2016 - Held that - The application preferred by Nikhil Mehta & Sons is to be admitted, and Resolution Process will be initiated, the question of initiation of further proceeding under any of the provisions of I&B Code (Sections 7, 9 or 10) does not arise. The appellants herein, whether they are Financial Creditor or Operational Creditor or Secured Creditor or Unsecured Creditor , as claim to be creditors are now entitled to file their respective claims before the Interim Resolution Professional , as may be appointed and the advertisement as may be published in the newspaper calling of such application(s) with regard to resolution of Corporate Debtor - AMR Infrastructure Ltd. In such case, their claim should be considered by the Interim Resolution Professional (IRP) and the Committee of Creditors, in accordance with the provisions of the I&B Code . Therefore, no further order is required to be passed in these appeals. In case the application preferred by Nikhil Mehta and sons under Section 7 of I&B Code is not found to be complete or if they fail to complete the defect, if any, as per proviso to Section 7 of I&B Code and in case the said application of Nikhil Mehta and Sons is dismissed on such ground, in such case, as the appellants cannot prefer any application before the Interim Resolution Professional, we give liberty to the appellants to file interlocutory applications in these present appeals for recall of this order for their decision on merit.

Summary

Issues:
1. Transfer of pending proceedings under the Companies Act, 1956 to the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016.
2. Determination of creditor status - Financial Creditor or Operational Creditor.
3. Dispute resolution regarding creditor claims against AMR Infrastructure Ltd.
4. Appeal against the order dismissing the application under Section 7 of the Insolvency and Bankruptcy Code.

Issue 1: Transfer of pending proceedings under the Companies Act, 1956 to the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016:
The appeals involved the transfer of pending petitions under Section 433(e) of the Companies Act, 1956 to the National Company Law Tribunal (NCLT) as per the provisions of the Insolvency and Bankruptcy Code, 2016. The Central Government framed rules under Section 239 of the I&B Code, allowing for the transfer of petitions pending before a High Court to the NCLT for resolution under the I&B Code. The amended Rule 5 specified the procedure for such transfers, including the submission of necessary information by the petitioner for admission of the petition under the I&B Code. The failure to submit required information by a specified date would result in the petition being abated.

Issue 2: Determination of creditor status - Financial Creditor or Operational Creditor:
The appeals involved claims by different appellants to be either 'Financial Creditors' or 'Operational Creditors' of AMR Infrastructure Ltd. The Adjudicating Authority at the NCLT dismissed the claims of certain appellants, challenging their status as Financial or Operational Creditors, leading to the appeals. The question arose as to whether the appellants met the criteria to be classified as Financial or Operational Creditors, which was essential for their claims against the respondent.

Issue 3: Dispute resolution regarding creditor claims against AMR Infrastructure Ltd.:
The appeals required a determination of the validity of the claims made by the appellants against AMR Infrastructure Ltd. The appellants asserted themselves as creditors of the respondent without any dispute from the respondent. The primary issue was to ascertain whether the orders passed by the Adjudicating Authority were appropriate concerning the creditor claims against AMR Infrastructure Ltd.

Issue 4: Appeal against the order dismissing the application under Section 7 of the Insolvency and Bankruptcy Code:
One of the appeals involved a challenge against the dismissal of an application under Section 7 of the Insolvency and Bankruptcy Code by 'Nikhil Mehta and Sons'. Initially, the Adjudicating Authority rejected their claim as Financial Creditors, prompting them to appeal. The Appellate Tribunal reviewed the case and held 'Nikhil Mehta and Sons' to be Financial Creditors, setting aside the earlier judgment and remitting the matter back to the Adjudicating Authority for further consideration.

In conclusion, the judgment addressed various issues related to the transfer of proceedings, determination of creditor status, dispute resolution concerning creditor claims, and appeals against orders dismissing applications under the Insolvency and Bankruptcy Code. The Appellate Tribunal's decisions in each appeal provided clarity on the legal standing of the parties involved and the appropriate procedures to be followed under the relevant laws.