2018 (5) TMI 173 - AT - Insolvency and Bankruptcy

Corporate insolvency process - Authorization to file application - Held that - We find that the Officers of the respective Banks have been authorised by the Competent Authority to file the application. Mr. Pallav Sangal is an Officer of the Standard Chartered Bank Limited, who has been authorised by the Chief Executive Officer of the Bank. The Chief Executive Officer has been authorised by the Standard Chartered Bank to authorise any person for taking action in accordance with law. Similarly, in the case of DBS Bank Limited, we find that Mr. Pankaj Jain has been authorised by the Board of Directors of the DBS Bank Limited. In view of the fact that the application has been filed by the authorised persons, we hold that both the applications on behalf of the Financial Creditors were maintainable. In any case if one of the application is admitted, the Corporate Insolvency Resolution Process starts. In such case, it is not necessary to admit the other application, who (2nd Applicant) is entitled to file claim before the Resolution Professional .

Summary

Issues Involved:
1. Competence of the Power of Attorney holders to file applications under Section 7 of the Insolvency and Bankruptcy Code, 2016.
2. Certification of Statement of Accounts under the Bankers' Books of Evidence Act, 1891.
3. Validity of the Certificate of Registration of Charge over the assets of the Debtor Company.
4. Adequacy of stamping on the Facility Agreement.
5. Impact of an appeal over an order dismissing winding up petition on the adjudicating authority's decision under Section 7 of the Code.
6. Effect of Reserve Bank of India directives pursuant to the Banking Regulations (Amendment) Act, 2017 on the application.
7. Applicability of the Insolvency & Bankruptcy Code to agreements governed by English Law.

Detailed Analysis:

1. Competence of the Power of Attorney Holders:
The main contention by the Appellant was that the applications under Section 7 of the Insolvency and Bankruptcy Code, 2016 (I&B Code) filed by Mr. Pallav Sangal on behalf of Standard Chartered Bank Limited and Mr. Pankaj Jain on behalf of DBS Bank Limited were not valid as they were not authorized by the respective Boards of Directors. The Appellate Tribunal examined the Power of Attorney documents and found that Mr. Pallav Sangal was authorized by the Chief Executive Officer (CEO) of Standard Chartered Bank Limited, who in turn was authorized by the Bank to execute such Power of Attorney. Similarly, Mr. Pankaj Jain was authorized by the Board of Directors of DBS Bank Limited. The Tribunal referred to the decision in "Palogix Infrastructure Private Limited Vs. ICICI Bank Limited" and concluded that the applications were maintainable as they were filed by authorized persons.

2. Certification of Statement of Accounts:
The Tribunal did not delve deeply into this issue as it was not pressed by the learned Senior Counsel for the Appellant during the appeal.

3. Validity of the Certificate of Registration of Charge:
This issue was also not argued by the learned Senior Counsel for the Appellant during the appeal, and hence, the Tribunal did not provide a detailed analysis.

4. Adequacy of Stamping on the Facility Agreement:
The Tribunal did not address this issue in detail as it was not pressed by the learned Senior Counsel for the Appellant.

5. Impact of an Appeal over an Order Dismissing Winding Up Petition:
The Tribunal did not provide a detailed analysis on this issue as it was not argued by the learned Senior Counsel for the Appellant during the appeal.

6. Effect of Reserve Bank of India Directives:
This issue was not pressed by the learned Senior Counsel for the Appellant, and hence, the Tribunal did not provide a detailed analysis.

7. Applicability of the Insolvency & Bankruptcy Code to Agreements Governed by English Law:
The Tribunal did not address this issue in detail as it was not argued by the learned Senior Counsel for the Appellant during the appeal.

Conclusion:
The Tribunal held that the applications filed by the authorized persons on behalf of the Financial Creditors were maintainable. The appeals were dismissed, and the Tribunal found no merit in the arguments presented by the Appellant. The Tribunal emphasized that once one application is admitted, the Corporate Insolvency Resolution Process (CIRP) commences, and it is not necessary to admit the other application, as the second applicant can file a claim before the Resolution Professional. The appeals were dismissed with no order as to costs.