2020 (3) TMI 89 - AT - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT - In the present case, as we find that the Appellant is a 'Corporate Debtor', in respect of whom 'Liquidation Order' has been made, cannot make an application for initiation of 'Corporate Insolvency Resolution Process' under Chapter II, which includes application under section 9. Even if, it is accepted that there is no pre-existing dispute, the application under section 9 preferred by Meka Dredging Company Pvt. Ltd. (Corporate Debtor) is not maintainable - Appeal is dismissed.

Summary

Issues:
1. Appeal against rejection of application under Section 9 of the Insolvency and Bankruptcy Code, 2016.
2. Interpretation of Section 11(d) of the Insolvency and Bankruptcy Code.

Analysis:
1. The appeal was filed by the Mica Dredging Company Pvt. Ltd., represented by the Liquidator, against the rejection of their application under Section 9 of the Insolvency and Bankruptcy Code by the Adjudicating Authority. The application was filed as an 'Operational Creditor' for initiating the 'Corporate Insolvency Resolution Process' against another company. The counsel for the appellant argued that there was no pre-existing dispute and that the provision of Section 11(d) was not applicable to their case. However, the Tribunal noted that Section 11(d) prohibits a corporate debtor in respect of whom a liquidation order has been made from initiating the insolvency resolution process.

2. The Tribunal referred to Section 11 of the Insolvency and Bankruptcy Code, specifically clause (d), which outlines the persons not entitled to make an application for initiating the corporate insolvency resolution process. It states that a corporate debtor in respect of whom a liquidation order has been made is not eligible to make such an application. The Tribunal concluded that since the appellant was a 'Corporate Debtor' for whom a liquidation order had been issued, they were not entitled to file the application under Section 9. Despite the absence of a pre-existing dispute, the Tribunal held that the application was not maintainable, and consequently, the appeal was dismissed.