2020 (10) TMI 115 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - debt due and payable or not - legally enforceable debt in between the Financial Creditor and the Corporate Debtor or not - HELD THAT - It is very clearly stated in the Power of Attorney that the Power of Attorney Holder therein can ''.appear before any judicial or quasi-judicial body including any Court of Law, Forum, Tribunal, Arbitrator and Banking Ombudsman, represent the Bank and act as Presenting Officers before Debt Recovery Tribunals/Debt Recovery Appellate Tribunals/Company Law Board and other such judicial/quasi-judicial bodies/offices, institutes suit or appeals.. Therefore, this IBA has seen filed by the Assistant Vice President of the Financial Creditor who is the Power of Attorney Holder of the Financial Creditor. This Tribunal is of the opinion that no specific authorization is required to file the instant IB case - Dated the 24th day of September, 2020.

Summary

Issues:
1. Maintainability of the Insolvency Application (IBA/25/KOB/2020) raised by the Corporate Debtor.

Analysis:
The Applicant, a Corporate Debtor, challenged the maintainability of the Insolvency Application (IBA/25/KOB/2020) alleging non-payment of a term loan by the Financial Creditor. The Corporate Debtor disputed the existence and default of the debt, claiming it was not legally enforceable. The Applicant argued that the Power of Attorney Holder, Smt. Maya C., lacked specific authorization to file the IBA under the Insolvency and Bankruptcy Code, 2016 (IBC). The Corporate Debtor contended that without explicit authorization, the application should be dismissed.

The Respondent, the Financial Creditor, countered by stating that Smt. Maya C. was authorized to represent the Financial Creditor before judicial bodies, including filing applications, as per the Power of Attorney. The Financial Creditor emphasized that the IBA was filed in their name, with the Power of Attorney Holder acting on their behalf. The Respondent argued that the lack of specific authorization for the IBA was irrelevant and unsustainable.

Upon hearing both parties, the Tribunal referred to a previous NCLAT decision and analyzed the Power of Attorney provided by the Financial Creditor. The Tribunal noted that the Power of Attorney explicitly authorized representation before judicial bodies, including filing applications. Citing the NCLAT decision, the Tribunal concluded that no specific authorization was necessary for filing the IBA. It determined that Smt. Maya C., as the Vice President/Br. Head and Power of Attorney Holder, was authorized to file the IBA. Consequently, the Tribunal dismissed the Applicant's challenge as lacking merit.

In conclusion, the Tribunal upheld the maintainability of the Insolvency Application (IBA/25/KOB/2020) filed by the Financial Creditor through the authorized representative, Smt. Maya C. The decision highlighted the significance of the Power of Attorney's broad authorization for legal proceedings, emphasizing that specific authorization was not a prerequisite for filing the application under the IBC. The judgment provided clarity on the authority of designated officers to act as authorized representatives for initiating insolvency proceedings, ensuring adherence to legal requirements and procedural standards under the IBC.