2017 (12) TMI 651 - AT - Companies Law

Corporate insolvency procedure - whether application under Section 7 of the I&B Code has been filed by the Power of Attorney holder which according him is not permissible - Held that - As noticed, in the present case the application under Section 7 has been filed by the Deputy General Manager of the Bank, in the authorisation order it is mentioned as Power of Attorney, but that will not change the complex of the instrument which is an order of authorisation. In view of such position of law the submission made by the counsel for the appellant can not be accepted. The appellant then referred to the impugned order and submitted that the Adjudicating Authority has treated the 1st respondent as secured creditor and has made certain observations. However, as it has no relevancy with admission of the application, we are not expressing any opinion. We find no merit in this appeal.

Summary

Issues:
1. Substitution of appellant and respondent in the petition.
2. Appeal against the order passed by the Adjudicating Authority under the Insolvency & Bankruptcy Code, 2016.
3. Permissibility of filing application under Section 7 by a Power of Attorney holder.
4. Interpretation of authorization by a Financial Creditor for legal proceedings.
5. Determination of the status of a secured creditor by the Adjudicating Authority.

Analysis:
1. The judgment addresses a petition for substitution where the appellant seeks to implead himself and transpose a company through an Interim Resolution Professional as the second respondent. The tribunal allows the substitution, directing the necessary corrections in the cause title, thereby disposing of the related application.

2. The appeal challenges an order admitting an application under Section 7 of the Insolvency & Bankruptcy Code, 2016, passed by the Adjudicating Authority. The appellant contests the filing of the application by a Power of Attorney holder, arguing its impermissibility. The respondent, a financial creditor, asserts that the application was filed by an authorized person, the Deputy General Manager of the Bank.

3. Referring to a previous case, the tribunal clarifies that if a Financial Creditor authorizes its officers to act in legal proceedings, the use of the term "Power of Attorney" does not negate the officer's authority. The tribunal emphasizes that such authorization can be by designation, allowing the officer to be the Authorized Representative for filing applications under the I&B Code.

4. In the present case, the application was filed by the Deputy General Manager of the Bank, referred to as Power of Attorney in the authorization order. The tribunal holds that the designation as Power of Attorney does not alter the nature of the authorization, rejecting the appellant's argument against its acceptance.

5. Lastly, the appellant challenges the Adjudicating Authority's treatment of the 1st respondent as a secured creditor and certain observations made. The tribunal deems these observations irrelevant to the application's admission and refrains from expressing an opinion on the matter, ultimately dismissing the appeal without costs.