2020 (4) TMI 79 - AT - Insolvency and Bankruptcy

Withdrawal of application - constitution of committee of creditors or not - Interim Resolution Professional did not appear even on issuance of SCN - HELD THAT - In exercise of the powers conferred under rule 11 of the National Company Law Appellate Tribunal Rules, 2016, we set aside the impugned order dated October 1, 2019 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench in KETKI SHAH TALATI FINANCIAL CREDITOR VERSUS KASATA HOMETECH (INDIA) PRIVATE LIMITED 2019 (10) TMI 1263 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI and dispose of the application under section 7 filed by Ketki Shah Talati as withdrawn - The appellant-Kasata Hometech (India) P. Ltd. (corporate debtor) is released from the rigour of corporate insolvency resolution process . The interim resolution professional will handover the assets and records to the promoter/director of the corporate debtor immediately. The case is remitted to the Adjudicating Authority to decide only the corporate insolvency resolution process cost, which includes fee of the interim resolution professional and cost incurred by him, which is to be paid by the appellant within 15 days from the date of such order by the Adjudicating Authority.

Issues:
1. Application under section 7 of the Insolvency and Bankruptcy Code, 2016 for corporate insolvency resolution process initiation.
2. Settlement offer by the appellant to pay the claim amount in instalments.
3. Confirmation of payment by both parties and non-appearance of the Interim Resolution Professional.
4. Exercise of powers under rule 11 of the National Company Law Appellate Tribunal Rules, 2016 to set aside the impugned order and withdraw the application under section 7.

Analysis:
1. The judgment pertains to an application filed under section 7 of the Insolvency and Bankruptcy Code, 2016 by a financial creditor for the initiation of the corporate insolvency resolution process against a corporate debtor. The Adjudicating Authority admitted the application, leading to subsequent proceedings before the Appellate Tribunal.

2. During the proceedings, the appellant expressed willingness to settle the matter with the financial creditor by agreeing to pay the claim amount in instalments. The Appellate Tribunal, in its order dated November 18, 2019, outlined the payment schedule for the appellant, emphasizing the need for timely settlement to dispose of the matter in accordance with relevant legal precedents.

3. Both parties confirmed that the total amount specified in the order had been paid by the appellant to the financial creditor. However, it was noted that the committee of creditors had not been constituted, and the Interim Resolution Professional failed to appear despite receiving notice.

4. In light of the circumstances and exercising powers under rule 11 of the National Company Law Appellate Tribunal Rules, 2016, the Appellate Tribunal set aside the impugned order passed by the Adjudicating Authority. The application filed by the financial creditor was withdrawn, releasing the corporate debtor from the corporate insolvency resolution process. The Interim Resolution Professional was directed to hand over assets and records to the corporate debtor's promoter/director promptly. The Adjudicating Authority was tasked with determining the corporate insolvency resolution process cost, to be paid by the appellant within a specified timeframe.

This comprehensive judgment showcases the procedural intricacies involved in insolvency resolution processes, emphasizing the importance of timely payments and adherence to legal guidelines to ensure fair and efficient resolution of corporate insolvency cases.

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