2021 (8) TMI 723 - HC - Companies Law

Charge created in respect of a property in favour of the petitioner by the corporate debtor - petitioner claims to be a financial creditor of the corporate debtor in the NCLT proceedings - dispute exists between the petitioner and the first respondent - HELD THAT - The NCLT, Chennai has sought to pass the buck. The order may also seen to be irreverent and verging on the contumacious to remind this court that while the NCLT functions on a time bound basis, the time element may not apply to court proceedings. To such extent, the NCLT may do well to stay within the bounds of its authority and adhere to the limits of propriety in conformity with the superior authority that this court exercises. It is for the NCLT to decide whether the matter before it ought to be decided or not, whether any injunction operates or impedes the progress of the matter before it and the parties cannot be asked to approach this Court for this Court to hand-hold the NCLT and guide it through its proceedings. The NCLT would do well to confine itself to its area of specialisation and deal with the matter in accordance with law without waiting for any advice or assistance from this Court which this Court, in any event, is not obliged to extend. Petition disposed off.

Summary

Issues:
Challenge against NCLT order seeking direction to proceed with a pending matter.

Analysis:
The writ petition challenges an NCLT order dated March 26, 2021, seeking direction to proceed with a matter pending before it. The petitioner claims to be a financial creditor of the corporate debtor and is in dispute with the first respondent, who is allegedly related to the principal promoter of the corporate debtor. The first respondent has appealed a court order questioning a charge created in favor of the petitioner by the corporate debtor. The NCLT adjourned the matter till August 26, 2021, and the first respondent argues that proceeding without resolving her appeal may prejudice her. The NCLT's order raised concerns about the complexities and pending litigations hindering the Corporate Insolvency Resolution Process (CIRP). However, the High Court criticized the NCLT for attempting to shift responsibility and reminded it to operate within its authority and not seek guidance from the court. The High Court emphasized that the NCLT should decide independently on the matter before it without involving the court or expecting hand-holding. The judgment concludes by disposing of the writ petition with these observations and no order as to costs.

This detailed analysis covers the issues raised in the legal judgment, highlighting the key arguments, concerns, and directives provided by the High Court in response to the challenge against the NCLT order seeking direction to proceed with a pending matter.