2019 (6) TMI 906 - AT - Insolvency and Bankruptcy

Admissibility of application - Initiation of CIRP - Corporate Debtor - Section 7 of the Insolvency and Bankruptcy Code 2016 - HELD THAT - Learned counsel for the Respondents submits that the counsel for the Corporate Debtor appeared on eleven occasions before the Adjudicating Authority thereafter on hearing them the order was passed. So far as the claims of the Operational Creditors are concerned their claim will be considered by the Resolution Professional once admitted. Otherwise they have no right to be heard at the time of admission of the application under Section 7 of the I B Code . We are not inclined to interfere with the impugned order dated 1st November 2018. The Adjudicating Authority is expected to complete the Resolution Process in accordance with law within the stipulated period. The Resolution Professional the Committee of Creditors will co-operate to ensure that the resolution process succeeds. Appeal disposed off.

Summary

Issues involved:
Admission of application under Section 7 of the Insolvency and Bankruptcy Code, 2016 without notice to the Corporate Debtor, consideration of claims of Operational Creditors, interference with the impugned order dated 1st November, 2018, completion of Resolution Process within stipulated period.

Analysis:
The appeals were filed by the Appellants - Shareholders against the order passed by the Adjudicating Authority admitting the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 filed by the Respondent - 'Union Bank of India'. The Appellants contended that the Corporate Debtor is a Public Limited Company with numerous shareholders and dependents, and the application was admitted without notice to the Corporate Debtor. However, it was noted that notice was indeed issued to the Corporate Debtor, and their representatives appeared before the Adjudicating Authority and were heard. The Respondents highlighted that the Corporate Debtor's counsel appeared on multiple occasions before the Adjudicating Authority before the order was passed.

The issue of claims of Operational Creditors was addressed, stating that their claims would be considered by the Resolution Professional once admitted. It was emphasized that Operational Creditors do not have the right to be heard at the time of admission of the application under Section 7 of the Insolvency and Bankruptcy Code. The Tribunal declined to interfere with the impugned order dated 1st November, 2018, and directed the Adjudicating Authority to complete the Resolution Process within the stipulated period. The Resolution Professional and the Committee of Creditors were urged to cooperate to ensure the success of the resolution process.

In conclusion, both appeals were disposed of with the mentioned observations and directions, without any costs being imposed. The Tribunal's decision focused on upholding the legal procedures under the Insolvency and Bankruptcy Code, emphasizing the importance of following due process and cooperation for the effective resolution of the matter.