9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (10) TMI 463 - AT - IBCWithdrawal of application under Section 12A of IBC - application can be filed after commencement of the Liquidation Proceedings or not? - Liquidation commenced on 12.09.2017 - requirement of constitution of SCC as per the Regulation 31A inserted in Liquidation Regulation with effect from 25.07.2019. Whether an Application under Section 12A for withdrawal of the CIRP can be filed after commencement of the Liquidation Proceedings? - HELD THAT - In view of the clear Statutory Scheme as delineated by 12A, Section 33 and Regulation 2B of the Liquidation Regulation, during Liquidation period, an Application under Section 12A is not permissible - In the facts of the present case, it is clear that former Director of the Corporate Debtor, Ashish Mohan Gupta, himself has challenged the Liquidation Order and also sought to submit a Scheme which were all rejected up to this Tribunal. The Application which has been filed by the Appellant No. 1 under Section 12A was filed after more than three years from Liquidation commencement, which was at the instance of the former Director Aashish Mohan Gupta, which has been clearly noticed by the Adjudicating Authority in the Impugned Order - the Adjudicating Authority did not commit any error in rejecting application filed by the Appellant. Whether in the facts of the present case, when the Liquidation commenced on 12.09.2017, it was obligatory for the Liquidator to constitute the SCC as per the Regulation 31A inserted in Liquidation Regulation with effect from 25.07.2019? - HELD THAT - The Liquidation commencement date in the present case is 12.09.2017. The provision for constitution of SCC was inserted in IBBI (Liquidation Process) Regulations, 2016, by Notification dated 25.07.2019 with effect from 25.07.2019, which required the Liquidator shall constitute the SCC. An explanation to Regulation 31A of the IBBI (Liquidation Process) Regulations, 2016, has been inserted by Notification dated 08.04.2022 with effect from 20.04.2022, which explanation is clarificatory explanation, clarifying the ambit and scope of Regulation 31A - On looking into the Scheme of IBC, SCC, which is required to be constituted within 60 days from the Liquidation commencement date is not a possibility in the facts of the present case. Statute never contemplate performance of impossible act, in the present case when Liquidation has commenced on 12.09.2017, there is no question of constitution of the SCC within 60 days from Liquidation commencement date. From bare look into the statutory provision, it is clear that Regulation 31A did not require constitution of SCC with regard to the Liquidation which has commenced years ago from the provision for SCC came into the Regulation. Explanation to Regulation 31A is a complete answer to the submission of the Appellant that there is no requirement of constitution of SCC in the facts of the present case. There are no error in the Order passed by the Adjudicating Authority, rejecting the Applications filed by the Appellant - there are no substance in any of the submission advanced by the Counsel for the Appellant - appeal dismissed.
Issues Involved:
1. Whether an Application under Section 12A for withdrawal of the CIRP can be filed after commencement of the Liquidation Proceedings. 2. Whether it was obligatory for the Liquidator to constitute the Stakeholders Consultation Committee (SCC) as per Regulation 31A inserted in Liquidation Regulation with effect from 25.07.2019. Issue-wise Detailed Analysis: Issue 1: Application under Section 12A Post-Liquidation The primary question was whether a Section 12A application for withdrawal of the Corporate Insolvency Resolution Process (CIRP) is maintainable after the commencement of liquidation proceedings. Section 12A of the Insolvency and Bankruptcy Code (IBC) allows for the withdrawal of an application admitted under sections 7, 9, or 10 with the approval of 90% voting share of the Committee of Creditors (CoC). However, once liquidation proceedings commence, the CoC ceases to exist, rendering the withdrawal under Section 12A inapplicable post-liquidation. The statutory scheme of the IBC and Liquidation Regulations, particularly Regulation 2B, which provides for Compromise or Arrangement, negate the possibility of withdrawal under Section 12A during liquidation. The Tribunal referred to past judgments, such as `V Navneetha Krishnan' and `Lokhandwala Kataria Construction Private Limited', but found them either contextually different or not aligned with the statutory framework post-liquidation. Thus, the Tribunal concluded that the application under Section 12A is not permissible once liquidation has commenced. Issue 2: Constitution of Stakeholders Consultation Committee (SCC) The second issue was whether the Liquidator was required to constitute an SCC as per Regulation 31A of the IBBI (Liquidation Process) Regulations, 2016, which was inserted by a notification effective from 25.07.2019. The liquidation in this case commenced on 12.09.2017, prior to the insertion of Regulation 31A. The Tribunal noted that the explanation to Regulation 31A clarifies that the requirement for constituting an SCC applies only to liquidation processes commencing on or after the amendment date. As the liquidation in question began before this amendment, the Liquidator was not obligated to constitute an SCC. The Tribunal emphasized that statutory provisions do not require the performance of impossible acts, and thus, there was no error in the Liquidator's actions or the Adjudicating Authority's decision. Conclusion: The Tribunal found no merit in the Appeals, affirming that the Section 12A application was not maintainable post-liquidation and that there was no requirement for constituting an SCC for liquidation proceedings that commenced before the relevant amendment. Consequently, the Appeals were dismissed.
|
