9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (3) TMI 646 - AT - Insolvency and BankruptcyMainability of applicable u/s 65 while the application for initiation of CIRP is pending before NCLT - Fraudulent or malicious initiation of proceedings - Application filed under Section 65 of the Insolvency Bankruptcy Code, 2016, has been dismissed on the ground that such an application would be maintainable only after the main petition is admitted and CIRP is initiated - whether an application filed under Section 65 of the Code is maintainable after the filing of the application under Section 7, 9 or 10 of the Code or could be maintainable only after the admission of such an application? HELD THAT - The application under Section 65 has been filed at the stage of initiation of the proceedings for the purpose of CIRP and is not maintainable after the admission of the application as has been held by the Learned Tribunal. The question posed herein before, is answered in favour of the Appellant and against the Respondents. It is hereby held that in case where application is filed under Section 65 of the Code, it would be maintainable after the application is filed either under Section 7, 9 or 10 of the Code. The view taken by the Learned Tribunal that the said application would be maintainable only after admission and initiation of the CIRP proceedings is totally fallacious and is hereby overruled. The present appeal is hereby allowed - the impugned order is hereby set aside and the matter is remanded back to the Learned Tribunal to proceed further after taking into consideration the fact that the application of the Appellant is maintainable .
Issues involved:
The judgment involves the issue of whether an application filed under Section 65 of the Insolvency & Bankruptcy Code is maintainable after the filing of the application under Section 7, 9, or 10 of the Code or only after the admission of such an application. Detailed Summary: Issue 1: Application under Section 65 of the Code The appeal was directed against an order passed by the National Company Law Tribunal, New Delhi, dismissing an application filed under Section 65 of the Insolvency & Bankruptcy Code, 2016. The appellant sought directions related to the initiation of the insolvency resolution process against a Corporate Debtor. The Tribunal dismissed the application on the grounds that it would be maintainable only after the main petition is admitted and Corporate Insolvency Resolution Process (CIRP) is initiated. Issue 2: Interpretation of "initiation" The Senior Counsel for the Appellant argued that the Tribunal misinterpreted the word "initiation" in the context of the Insolvency Resolution Process and the admission of the application. He referred to relevant sections of the Code to support his argument, emphasizing the distinction between the initiation date and the insolvency commencement date. Issue 3: Legal Precedent The Counsel for the Appellant cited a decision of the Hon'ble Supreme Court in the case of Ramesh Kymal vs. Siemens Gamesa Renewable Power Private Limited to support the interpretation of the initiation date and insolvency commencement date in the context of the Code. The Supreme Court's decision highlighted the importance of understanding the difference between the initiation and commencement of the Corporate Insolvency Resolution Process. Issue 4: Tribunal's Decision The Tribunal's decision was based on the interpretation that the application under Section 65 would be maintainable only after the admission of the application under Section 7, 9, or 10 of the Code and the initiation of the CIRP. However, the Appellate Tribunal found this view to be erroneous as it did not consider the basic provisions and definitions provided under the Code. The Appellate Tribunal overruled the Tribunal's decision, holding that the application under Section 65 is maintainable after the application is filed under Section 7, 9, or 10 of the Code. Issue 5: Locus Standi of the Appellant The Respondents opposed the appeal on the ground that the Appellant did not have the locus standi to file the application under Section 65. The Appellate Tribunal directed that the issue of locus standi shall be decided by the Tribunal after considering the objections raised by the Respondents and giving due opportunity to the Appellant. Conclusion The Appellate Tribunal allowed the appeal, set aside the impugned order, and remanded the matter back to the Learned Tribunal for further proceedings. The parties were directed to appear before the Tribunal on a specified date, and the registry was instructed to send a copy of the order for compliance.
|
