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2021 (5) TMI 177 - Tri - Insolvency and BankruptcyValidity of CIRP proceedings commenced - validity of constitution of Committee of Creditors pursuant to commencement of Corporate Insolvency Resolution Process - restoration of status quo of Respondent no. 7 as on Apr 25, 2019 as if no CIRP was ever commenced - direction to Respondent no. 7 to return the amount of ₹ 2 Cr paid by the Applicant towards money received against the forward sale and purchase transaction for sale of land owned by Respondent no. 7 - HELD THAT - It is pertinent to note herein that, had there been any irregularity in the admission order passed by this Adjudicating Authority in the IB Petition filed under Section 9 of the IB Code, in that event, the respondent/the then corporate debtor of CP (IB) 594 of 2018 would have approached before the Hon'ble Appellate Authority. However, the corporate debtor never approached the Appellate Authority for setting aside the admission order so passed by this Adjudicating Authority on 26.04.2019. Hence, admission order reached to its finality - It is also pertinent to mention herein that the present applicant had also filed an application, i.e. IA 802 of 2019 in CP (IB) 594 of 2018, before this Adjudicating Authority, during the pendency of CIRP, seeking direction upon the RP for accepting his claim as one of the financial creditors of the corporate debtor company. However, on hearing both sides, the said application was dismissed by this Adjudicating Authority on 07.02.2020. The application so filed by the applicant for recalling/quashing of the order dated 26.04.2019, along with other prayers, are not only beyond the jurisdiction of this Adjudicating Authority but also bad in the eye of law and is not maintainable - Application dismissed.
Issues:
1. Maintainability of application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016. 2. Time-barred claim of the Operational Creditor. 3. Legality of admission of the petition under Section 9 of the IB Code. 4. Request to quash CIRP proceedings and related decisions. 5. Return of advance sale consideration. 6. Power of review/recall of the Adjudicating Authority. Analysis: 1. The application was filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, by the Sole Proprietor of an entity claiming to be a financial creditor of the Corporate Debtor. The applicant sought to recover an advance sale consideration paid for a purchase transaction. The Respondent had undergone Corporate Insolvency Resolution Process (CIRP), and a Resolution Plan had been approved by the Adjudicating Authority. 2. The Respondent argued that the application was time-barred as it was filed after around 10 months, making it a claim of the Operational Creditor beyond the permissible period. The Respondent contended that the admission of the petition was in violation of the provisions of the IB Code. 3. The applicant requested to quash the CIRP proceedings, invalidate the Committee of Creditors' constitution, and declare decisions taken during the process as illegal. The applicant also sought the return of the advance sale consideration paid for the transaction. 4. The Adjudicating Authority noted that the admission order had reached finality as the Corporate Debtor did not challenge it before the Appellate Authority. The Resolution Plan had been accepted and approved, further solidifying the finality of the decisions taken during the CIRP. 5. The applicant had previously filed an application seeking recognition as a financial creditor during the CIRP, which was dismissed. Similar claims were rejected by the Adjudicating Authority in other instances, and appeals against those decisions were also dismissed by higher courts, upholding the Adjudicating Authority's orders. 6. The Adjudicating Authority clarified that it did not have the power to review or recall its own orders under the IB Code or NCLT Rules. Citing legal precedents, the Authority emphasized that the power of review is not inherent and must be explicitly granted by law, which was not the case in this situation. Therefore, the application for recalling/quashing the order and related prayers were deemed beyond the jurisdiction of the Adjudicating Authority and were rejected.
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