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2017 (11) TMI 944 - AT - Insolvency and BankruptcyCorporate Insolvency Resolution Process - Held that - We find that the application under Section 433(e)(f) read with Sections 433(i)(a) and 439(i)(b) of the Companies Act, 1956, which was transferred to the Adjudicating Authority was not complete before treating it as an application under Section 9 of the I&B Code and admitting the case, we hold that the application was fit to be rejected. The Adjudicating Authority having failed to notice the same, we set aside the impugned order dated 16th August, 2017. In effect, order (s), if any, passed by Ld. Adjudicating Authority appointing Interim Resolution Professional , declaring moratorium, freezing of account, if any, and all other order (s) passed by Adjudicating Authority pursuant to impugned order and action, if any, taken by the Interim Resolution Professional , including the advertisement, if any, published in the newspaper calling for applications all such orders and actions are declared illegal and are set aside. The application preferred by Respondent under Section 9 of the I&B Code, 2016 is dismissed.
Issues:
1. Appeal against order admitting application under Section 9 of the Insolvency and Bankruptcy Code, 2016. 2. Compliance with Rules for admission of petition under Section 9 of the I&B Code. 3. Settlement of dispute between parties. Issue 1 - Appeal against order admitting application under Section 9 of the Insolvency and Bankruptcy Code, 2016: The appeal was filed by the Corporate Debtor against the order passed by the Adjudicating Authority admitting the application under Section 9 of the Insolvency and Bankruptcy Code, 2016. The appellant argued that the petition was treated as an application under Section 9 without complete documents as per the I&B Code. Issue 2 - Compliance with Rules for admission of petition under Section 9 of the I&B Code: The appellant contended that Rule 5 of the Companies (Transfer of Pending Proceedings) Rules, 2016 was not complied with. The respondent failed to submit all required information within 60 days for admission of the petition under Section 9 of the I&B Code and did not propose the name of the Interim Resolution Professional. It was noted that the provisions of the I&B Code were not followed as required. Issue 3 - Settlement of dispute between parties: Both parties acknowledged that they had settled the dispute and filed a copy of the settlement before the Tribunal. Despite the settlement, the Adjudicating Authority had admitted the application under Section 9 of the I&B Code without proper completion of the transferred application under the Companies Act, 1956. The Tribunal, after considering the arguments, held that the application transferred from the Companies Act, 1956 to the Adjudicating Authority was not complete before being treated as an application under Section 9 of the I&B Code. As a result, the impugned order admitting the application was set aside. Consequently, all orders passed by the Adjudicating Authority, including the appointment of an Interim Resolution Professional and actions taken, were declared illegal and set aside. The application under Section 9 of the I&B Code was dismissed, and the proceedings were directed to be closed. Additionally, the Tribunal directed the Adjudicating Authority to determine the fee of the Interim Resolution Professional, if appointed, with the Respondent being responsible for paying the fees. The appeal was allowed with the above observations and directions, and no costs were awarded in the circumstances of the case.
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