2020 (3) TMI 1128 - Tri - Insolvency and Bankruptcy

Maintainability of Application - Initiation of CIRP - valid authorization - Despite reminders the corporate debtor failed to pay the outstanding dues and, therefore, the operational creditor was compelled to issue demand notice under section 8 of the I and B Code seeking payment of the outstanding amount - HELD THAT - It is found that the petition is filed by one Ms. Sneha Ranade on the basis of resolution passed by the board of directors of the operational creditor company on June 24, 2015, i. e., much before the Insolvency and Bankruptcy Code, 2016 came into force - only an authorised person as distinct from a power of attorney holder can make an application under sections 7, 9 and 10 and required to state his position in relation to the financial creditor. Palogix Infrastructure P. Ltd. v. ICICI Bank Ltd. 2017 (10) TMI 913 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI , speaks about the specific authorisation but in this case, the authorisation is of the year 2015, when the Code was not in existence. Hence, the question of any specific authorisation does not arise at all, otherwise also the resolution does not disclose any power to file application before the National Company Law Tribunal and/or any Tribunal - It is pertinent to mention here that during the course of hearing the learned lawyer appearing on behalf of the respondent submitted that the respondent has made part payment and trying to enter with an agreement to which the petitioner has denied. The application is not maintainable on the ground of proper authorisation itself which is of the year 2015 when the IB Code was not in existence - Application dismissed.

Summary

Issues:
1. Proper authorization for filing the petition under section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Maintainability of the petition based on the authorization provided.

Issue 1: Proper authorization for filing the petition under section 9 of the Insolvency and Bankruptcy Code, 2016:
The petition was filed by Ms. Sneha Ranade, authorized by the board of directors of the operational creditor company in 2015, before the Code came into force. The tribunal referred to the decision in Palogix Infrastructure P. Ltd. v. ICICI Bank Ltd., stating that only an authorized person, distinct from a power of attorney holder, can make an application under sections 7, 9, and 10. The tribunal noted that the authorization in this case was from 2015, pre-dating the existence of the Code. As the resolution did not disclose any power to file an application before the tribunal, the application was deemed not maintainable on the ground of improper authorization.

Issue 2: Maintainability of the petition based on the authorization provided:
During the hearing, the respondent mentioned making a part payment and attempting to reach an agreement, which the petitioner denied. However, the tribunal, instead of delving into the merits of the case, focused on the issue of proper authorization. Given that the authorization was from a time before the Code was in effect and did not specify the power to file an application before the tribunal, the application was dismissed as not maintainable. No costs were awarded in this regard.

In conclusion, the tribunal dismissed the petition under section 9 of the Insolvency and Bankruptcy Code, 2016, due to the lack of proper authorization for filing the application, as the authorization predated the existence of the Code and did not specifically grant the power to file before the tribunal. The tribunal emphasized the importance of distinct authorization for such applications and highlighted the specific requirements under the Code for authorized persons to initiate proceedings.