9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (9) TMI 7 - AT - Insolvency and BankruptcyMaintainability of the fresh application under Section 94 of the Insolvency and Bankruptcy Code - HELD THAT - There is no dispute between the parties regarding sequence of the events. The fact that Appellant filed the application under Section 94 in the year 2020 i.e. 24.09.2020 is undisputed. Punjab National Bank has also filed an Affidavit in this Appeal where it has been pleaded that the Appellant has been misusing the Interim Moratorium under Section 96 of the IBC for the last four years due to which Bank was unable to initiate any recovery proceeding under the SARFAESI or RDBFI Act for the recovery of the dues. The facts clearly indicate that while dismissing the application on 01.02.2024 by the Adjudicating Authority, no liberty was granted to file a fresh petition. While dismissing the application in noncompliance, Adjudicating Authority has not granted any liberty to file any fresh petition for the reasons which have been given. Reliance of the Appellant on the order dated 28.02.2024 claiming that clear liberty was granted to file fresh petition need to be noticed. The liberty to re-file was granted on the request made by the Appellant himself that he wanted to withdraw the petition with liberty to re-file under Section 94 of the Code as per law. The Appellant was permitted to withdraw IA No.519 of 2024 with liberty to re-file under Section 94(1) of the Code. Adjudicating Authority in order dated 28.02.2024 has not expressed any opinion as to whether application which is to be re-filed by the Appellant under Section 94(1) shall be maintainable or not. The Adjudicating Authority did not commit any error in dwelling on the question as to whether the application which is filed on 29.02.2024 being Company Petition is maintainable or not. As noted above, no liberty to file fresh petition was granted when order was passed on 01.02.2024. There are no error in the impugned order dated 17.05.2024 passed by the Adjudicating Authority which has been challenged in these two Appeals - both the Appeals are dismissed.
Issues Involved
1. Maintainability of the fresh application under Section 94 of the Insolvency and Bankruptcy Code (IBC). 2. Compliance with the Adjudicating Authority's directions. 3. Misuse of the interim moratorium under Section 96 of the IBC. Detailed Analysis Maintainability of the Fresh Application Under Section 94 of the IBC The primary issue was whether the fresh application filed by the Appellant under Section 94 of the IBC was maintainable. The Appellant contended that the liberty granted by the Adjudicating Authority on 28.02.2024 to refile the application should preclude the application from being rejected as non-maintainable. The Counsel for the Appellant argued that the liberty granted allowed them to file a fresh application under Section 94, and the earlier order dated 01.02.2024 dismissing the application for non-compliance should not impede this right. The Adjudicating Authority, however, dismissed the fresh application, emphasizing that the earlier order dated 01.02.2024, which dismissed the initial application for non-compliance, had become final and was not challenged. The Authority further noted that the liberty to refile was granted on the specific request of the Appellant and was subject to compliance with the law. The Tribunal upheld the Adjudicating Authority's decision, stating that the dismissal of the initial application for non-compliance and the subsequent liberty to refile did not negate the finality of the initial dismissal. Compliance with the Adjudicating Authority's Directions The Appellant had initially filed an application under Section 94 of the IBC on 24.09.2020. The Adjudicating Authority had directed the Appellant to file compliance and eligibility affidavits on several occasions, including orders dated 06.05.2022 and 01.02.2023. Despite multiple opportunities, the Appellant failed to comply with these directions, leading to the dismissal of the application on 01.02.2024 for non-compliance. The Tribunal noted that the Appellant's failure to comply with the Adjudicating Authority's directions was a significant factor in the dismissal of the initial application. The subsequent application filed on 29.02.2024 was also scrutinized for compliance, and the Tribunal found that the Appellant had not adhered to the required procedural norms, thereby justifying the dismissal of the fresh application. Misuse of the Interim Moratorium Under Section 96 of the IBC The Respondents, including the Financial Creditors (IDBI Bank and Punjab National Bank), argued that the Appellant had been misusing the interim moratorium under Section 96 of the IBC for an extended period, preventing the banks from initiating recovery proceedings under the SARFAESI Act or the RDBFI Act. The Adjudicating Authority noted that the Appellant had allowed the defective application to persist, thereby enjoying the benefits of the interim moratorium without curing the defects. The Tribunal concurred with the Adjudicating Authority's observation that the Appellant's actions constituted a misuse of the interim moratorium provisions. The Tribunal highlighted that the Appellant's conduct had impeded the recovery process for the Financial Creditors, further justifying the dismissal of the fresh application. Conclusion The Tribunal concluded that the Adjudicating Authority did not err in dismissing the fresh application under Section 94 of the IBC. The initial dismissal for non-compliance was final and unchallenged, and the liberty to refile granted on 28.02.2024 was conditional and did not negate the finality of the initial dismissal. The Appellant's failure to comply with procedural directions and the misuse of the interim moratorium provisions further supported the decision to dismiss the fresh application. Consequently, both appeals were dismissed.
|
