2022 (6) TMI 717 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - Doctrine of Merger - merger of order of NCLAT where there was a specific direction to this Adjudicating Authority to admit the application and pass consequential orders with Supreme Court order - HELD THAT - Hon ble NCLAT in its order dated 02.12.2021 in the last para specifically directed the Adjudicating Authority to pass consequential orders within one month from the date on which copy of this order is produced before the Adjudicating Authority and further mentioned that during this period it is open to the parties to endeavour to enter into settlement - as per the Doctrine of Merger order of Hon ble NCLAT merged into the order of Hon ble Supreme Court on 05.05.2022 and one month period mentioned in the order of Hon ble NCLAT giving liberty to the parties to enter into settlement be considered from 06.05.2022. In compliance of the order dated 02.12.2021 passed by the Hon ble NCLAT which is merged in the order passed by Hon ble Supreme Court dated 05.05.2022 this application is admitted and moratorium as described under Section 14 of IBC 2016 is triggered from the date of this order. Application admitted - moratorium declared.

Summary

Issues:
1. Application for Corporate Insolvency Resolution Process filed by Financial Creditor.
2. Dismissal of application by NCLT and appeal to NCLAT.
3. NCLAT's order allowing the appeal and directing Adjudicating Authority to admit the application.
4. Supreme Court's dismissal of appeal by Corporate Debtor.
5. Compliance with NCLAT's order and initiation of moratorium.

Analysis:
1. The application for Corporate Insolvency Resolution Process was filed by the Financial Creditor against the Corporate Debtor. The NCLT initially dismissed the application as not maintainable, leading to an appeal by the Financial Creditor to the NCLAT.

2. The NCLAT allowed the appeal by setting aside the NCLT's order and directed the Adjudicating Authority to admit the application under Section 7 of the IBC. The NCLAT's order emphasized the need for the Adjudicating Authority to pass consequential orders, including the order of Moratorium, within a specified timeframe.

3. The Corporate Debtor challenged the NCLAT's order in the Supreme Court, which subsequently dismissed the appeal, affirming the NCLAT's decision. The Financial Creditor then filed the current application based on the NCLAT and Supreme Court orders.

4. The Financial Creditor argued for compliance with the NCLAT's order, citing the finality of the NCLAT's decision after the Supreme Court's refusal to interfere. The Corporate Debtor's attempt to settle the matter was opposed by the Financial Creditor, emphasizing the need to adhere to the NCLAT's directions.

5. Relying on the Doctrine of Merger, the Tribunal admitted the application and initiated the moratorium as per Section 14 of the IBC. The Tribunal appointed an Interim Resolution Professional and directed the Financial Creditor to deposit a specified sum for the IRP's expenses. The Tribunal also outlined the implications of the moratorium and communicated the order to relevant parties and authorities for compliance.

This detailed analysis reflects the progression of the legal proceedings, highlighting the key decisions by the NCLT, NCLAT, and the Supreme Court, ultimately leading to the initiation of the Corporate Insolvency Resolution Process in compliance with the appellate orders.