2020 (9) TMI 555 - HC - Insolvency and Bankruptcy

Validity of order passed by NCLT - by the order it was mandated that no new petition would be entertained in the National Company Law Tribunal without record of default under Section 7 of IBC, 2016 - respondents submit that order dated 12.05.2020 was modified by a notification dated 13.08.2020 - HELD THAT - The notification of 12.05.2020 has been struck down by the Calcutta High Court - The notification dated 13.08.2020 reiterated the notification of 12.05.2020 issued by NCLT, however modified it to the limited extent that the default record would be filed wherever available with the Information Utility. 9. Learned counsel for the respondent informed that by a subsequent Notification dated 07.09.2020, Notification dated 13.08.2020 modifying the earlier Notification dated 12.05.2020, which had been struck down by the Kolkata High Court, has been withdrawn - Since the Notification dated 12.05.2020 has been struck down by the Kolkata High Court and Notification dated 13.08.2020 has been withdrawn by the respondent vide Notification dated 07.09.2020, learned counsel for the petitioner further submits that nothing further survives in this petition and accordingly he seeks leave to withdraw the petition. Petition dismissed as withdrawn.

Summary

Issues:
Challenge to NCLT order on new petition filings without default record under IBC, 2016.

Analysis:
The petitioner contested the NCLT order of 12.05.2020, which required a default record under Section 7 of IBC, 2016 for new petitions. The petitioner cited a judgment by the Calcutta High Court in a related case, which deemed the NCLT's actions as beyond its jurisdiction and contrary to the IBC, 2016. Consequently, the Calcutta High Court invalidated the NCLT order of 12.05.2020.

The respondents argued that the NCLT order of 12.05.2020 was later amended by a notification on 13.08.2020. This revised notification reiterated the requirement for a default record from the Information Utility for new petitions under Section 7 of IBC, 2016, but with the modification that it should be filed wherever available with the Information Utility.

It was noted that the notification of 13.08.2020 was issued before the Calcutta High Court's judgment on 18.08.2020. The subsequent notification on 07.09.2020 withdrew the notification of 13.08.2020, which had modified the earlier notification of 12.05.2020.

Given the withdrawal of the notification dated 13.08.2020 and the striking down of the notification dated 12.05.2020 by the Calcutta High Court, the petitioner sought to withdraw the petition as there was no further basis for its continuation. Consequently, the petition was dismissed as withdrawn, and the order was directed to be uploaded on the High Court website and forwarded to the counsels involved.