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2022 (6) TMI 9 - Tri - Insolvency and BankruptcyJurisdiction - Power of Liquidator to act beyond the period of liquidation - it is claimed that date of initiation of the Liquidation proceedings, is 10.01.2020 and the initial period of one year and the extended period of one year expired on 10.01.2022, and this application filed on 22.03.2022 is ultra vires to IBC 2016 - HELD THAT - A conjoint reading of Section 424(3) of Companies Act, 2013 and Rule 57 of NCLT Rules, 2016, it is clear that for the purpose of enforcement of an order of this Tribunal, the Tribunal shall be deemed to be a Civil Court and the order to be enforced as a deemed decree, for which an application is to be filed under Rule 56 of NCLT Rules, 2016 - Section 67 deals with the proceedings under Section 66, Rule 11 deals with Inherent powers of this Tribunal to make orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of this Tribunal and Rule 51 deals with the Power of the Tribunal to regulate the procedure. Nowhere in the Sections or Rules, there is any provision to order execution of the proceedings. In this case, the discretionary power cannot be used since this is a case for execution of the decree which can be done by this Tribunal under Rule 57 of the NCLT Rules, 2016, if application to that effect is filed and that too after hearing the affected parties. Since this application has been filed under Section 60(5) and 67 of IBC, the second relief for enforcement and execution of the order/decree passed by this Tribunal in IA/IBC/27/KOB/2021 vide order dated 13.07.2021 also cannot be granted. Application dismissed.
Issues:
Interpretation of powers of a Liquidator under Insolvency and Bankruptcy Code, 2016 for enforcement of orders and decrees. Analysis: 1. The Interlocutory Application was filed under Sections 60(5) & 67 of the IBC Code seeking directions for payment of a decreed amount by the Respondents to the Liquidator of the Corporate Debtor. The Liquidator sought enforcement of an order declaring certain transactions as fraudulent and directing payment to the Liquidator for distribution to Creditors under Section 53 of the IBC. 2. The Respondents contended that the Liquidator exceeded his powers as the application was filed after the expiration of the initial and extended liquidation period. They argued that enforcing the order during the pendency of an appeal was premature and beyond the Liquidator's authority. 3. The Respondents disputed the ownership of properties mentioned in the application and raised concerns about the nature of the claim against them. They highlighted their efforts to repay debts and challenged the validity and timing of the claimed amount, emphasizing the need for statutory remedies to be exhausted before crystallization of the claim. 4. The Tribunal examined the provisions of the Companies Act, 2013 and NCLT Rules, 2016 regarding enforcement of orders and decrees. It clarified that the Tribunal must issue an execution order for enforcement, and the Liquidator's discretionary power did not extend to execution of decrees without following due process under Rule 57 of NCLT Rules, 2016. 5. The Tribunal concluded that the application lacked merit as both reliefs sought could not be granted under the provisions invoked. It dismissed the application, emphasizing the need for proper execution procedures to be followed for enforcement of orders and decrees under the IBC. In summary, the Tribunal clarified the limitations of a Liquidator's powers under the IBC for enforcing orders and decrees, emphasizing the necessity of following due process for execution of decrees. The judgment highlighted the importance of adhering to statutory provisions and procedural requirements for enforcement actions, ultimately dismissing the application due to its failure to meet the necessary criteria for relief.
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