2018 (12) TMI 1437 - AT - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process - matter has not been referred within 180 days from the date of abatement of reference in terms of sub-clause (b) of Section 4 of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 - Held that - 180 days time period provided in subclause (b) of Section 4 of the SICA Repeal Act, 2003 (by Eighth Schedule) relates to reference if made to the National Company Law Tribunal (Adjudicating Authority) to treat application under Section 10 of the I&B Code without payment of fees. It does not mean that the Corporate Applicant cannot file an independent application under Section 10 of the I&B Code even after 180 days of abatement of the reference under the SICA Repeal Act, 2003 on payment of requisite fee. In the present case, we find that the case of the Appellant is covered by this Appellate Tribunal in Pr. Director General of Income Tax (Admn. & TPS) 2018 (6) TMI 350 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI . The impugned order, therefore, cannot be upheld. In view of the decision in Mr. Suresh Narayan Singh 2018 (11) TMI 892 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI a Corporate Insolvency Resolution Process is required to be initiated against Tayo Rolls Limited , for the said reason, while we declare the impugned judgment dated 26th September, 2018 as illegal and set aside the said order but do not remit the case for admission of application under Section 10. The Corporate Debtor having already suggested the name of the Interim Resolution Professional , in terms of the decision of this Appellate Tribunal in Mr. Suresh Narayan Singh (Supra) , the Adjudicating Authority will appoint Interim Resolution Professional , as proposed by the Corporate Debtor , if no proceeding is pending against him.

Summary

Issues involved:
1. Interpretation of Section 4 of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 in relation to the Insolvency and Bankruptcy Code, 2016.
2. Validity of an application under Section 10 of the Insolvency and Bankruptcy Code, 2016 filed beyond 180 days from the abatement of reference under the Sick Industrial Companies (Special Provisions) Repeal Act, 2003.
3. Rights of ex-employees to oppose applications under the Insolvency and Bankruptcy Code, 2016.
4. Dismissal of an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 and subsequent appeal.

Detailed analysis:
1. The judgment addressed the interpretation of Section 4 of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 concerning the Insolvency and Bankruptcy Code, 2016. The case involved a Corporate Debtor filing an application under Section 10 of the I&B Code, which was rejected due to not being referred within 180 days from the abatement of reference under the SICA Repeal Act, 2003. The Tribunal analyzed the provisions of the Acts and clarified that the time limit of 180 days is for making a reference to the National Company Law Tribunal without payment of fees, not for prohibiting the filing of an independent application under Section 10 after 180 days on payment of requisite fee.

2. The Tribunal referred to a previous case where it was established that the Company can file an application under Section 10 of the I&B Code even after 180 days of abatement of the reference under the SICA Repeal Act, 2003, as long as the requisite fee is paid. This interpretation clarified that the statutory time limit does not bar the filing of an independent application under Section 10 beyond 180 days.

3. The judgment also addressed the rights of an ex-employee who raised objections against the application under Section 10. It was stated that an ex-employee has no standing to oppose such applications, and objections raised by them may not be considered relevant or necessary in the proceedings.

4. Furthermore, the judgment discussed the dismissal of an application under Section 9 of the I&B Code filed by an Authorized Representative of workers of the Corporate Debtor. The dismissal was challenged in an appeal, and the Tribunal set aside the rejection order, directing the Adjudicating Authority to admit the application and proceed with the Corporate Insolvency Resolution Process against the Corporate Debtor. The Tribunal also provided directions regarding the appointment of an Interim Resolution Professional based on previous decisions.

In conclusion, the judgment provided a detailed analysis of the interpretation of relevant legal provisions, clarified the rights of parties involved, and set directions for further proceedings in the cases discussed.