2018 (4) TMI 1008 - AT - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process - winding up initiated already - Held that - Learned counsel appearing on behalf of Appellant accepts that Hon ble High Court has already initiated winding up proceedings by admitting the application under Section 433(e) of the Companies Act, 1956. In view of such positon and observations made by this Appellate Tribunal in aforesaid appeals, we hold that the application under Section 9 was not maintainable. For the said reason we are not inclined to interfere with the order passed by the Adjudicating Authority.

Summary

Issues:
1. Application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process.
2. Dismissal of the application due to pendency of winding up proceedings before the High Court.
3. Interpretation of Section 11 of the Insolvency and Bankruptcy Code regarding ineligibility to file an application under Section 10.
4. Applicability of the ruling in "M/s. Unigreen Global Private Limited Vs. Punjab National Bank & Ors." to Financial Creditors and Operational Creditors.
5. Observations in "Forech India Pvt. Ltd. Vs. Edelweiss Assets Reconstruction Company Ltd." regarding the maintainability of a petition under Section 7 or Section 9 against a Corporate Debtor involved in winding up or liquidation proceedings.

Analysis:
1. The judgment dealt with an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process against a company. The application was dismissed by the Adjudicating Authority due to the pendency of winding up proceedings before the High Court, rendering the application not maintainable.

2. The interpretation of Section 11 of the Insolvency and Bankruptcy Code was crucial in determining the eligibility to file an application under Section 10. The judgment highlighted that if winding up proceedings had been initiated against a Corporate Debtor or a liquidation order had been passed, the application under Section 10 would not be maintainable.

3. The ruling in "M/s. Unigreen Global Private Limited Vs. Punjab National Bank & Ors." was extended to Financial Creditors and Operational Creditors, emphasizing that if winding up proceedings had been initiated by the High Court, the application under Section 9 would not be maintainable.

4. The judgment in "Forech India Pvt. Ltd. Vs. Edelweiss Assets Reconstruction Company Ltd." addressed the maintainability of a petition under Section 7 or Section 9 against a Corporate Debtor involved in winding up or liquidation proceedings. It emphasized that once a Corporate Insolvency Resolution had started or liquidation proceedings had been initiated, filing another application under Section 7 or Section 9 against the same Corporate Debtor was not permissible.

5. Ultimately, the Appellate Tribunal upheld the dismissal of the application under Section 9 due to the initiation of winding up proceedings by the High Court. While setting aside the imposed cost on the appellant, the Tribunal concluded that the application was not maintainable in light of the existing winding up proceedings.