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2025 (1) TMI 1100 - SCH - IBCAdmissbility of petition u/s 9 of the IBC against the Corporate Debtor - asset value of the Corporate Debtor M/s. Etco Denim Private Limited was more than the norms prescribed for it to qualify as an MSME - HELD THAT - An appeal is heard in terms of Section 62 of the IBC and within its limited confines the question of the validity of the registration certificate dated 23.10.2020 not gone into. At the same time the certificate having been placed on record Section 29A read with Section 240A of the IBC would come into play and would affect the interests of the secured creditors including the appellant Central Bank of India. Keeping in view the peculiar facts of the present case the appellant Central Bank of India is permitted to file a writ petition before the jurisdictional High Court challenging the issuance of the MSME Registration Certificate dated 23.10.2020. If any such writ petition is filed the High Court is requested to take up the same for hearing expeditiously and preferably decide the same within a period of six months from the date of its filing. The parties and the authorities who have issued the said certificate shall also cooperate. Re-list in the week commencing 18.08.2025.
The Supreme Court, comprising Hon'ble Chief Justice Sanjiv Khanna and Justice Sanjay Kumar, addressed an appeal under Section 62 of the Insolvency and Bankruptcy Code, 2016 (IBC). The case involved a petition under Section 9 of the IBC against the Corporate Debtor, M/s. Etco Denim Private Limited, which was admitted by the adjudicating authority on 14.02.2020, and a Resolution Professional was appointed.
During the proceedings, the Resolution Professional instructed an employee of the Corporate Debtor to apply for registration as a Micro, Small, or Medium Enterprise (MSME) under the MSME Development Act, 2006, based on a Gazette Notification dated 01.06.2020. The appellant, Central Bank of India, objected to this registration, arguing that the Corporate Debtor did not meet MSME criteria due to its asset value. Despite these objections, an MSME certificate was issued on 23.10.2020. The appellant contends that the MSME certification was wrongfully obtained and contrary to law. However, the Supreme Court noted that, within the limited scope of Section 62 of the IBC, it could not assess the validity of the MSME certificate. Nevertheless, the Court acknowledged that Section 29A read with Section 240A of the IBC could affect the interests of secured creditors, including the appellant. The Court permitted the Central Bank of India to file a writ petition in the jurisdictional High Court challenging the MSME Registration Certificate. It urged the High Court to expedite the hearing and resolve the matter within six months. The Supreme Court clarified that it had not examined the certificate's validity, leaving all arguments open for consideration. The proceedings before the adjudicating authority and the Corporate Insolvency Resolution Process were stayed, with the case scheduled to be re-listed in the week commencing 18.08.2025.
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