2020 (9) TMI 793 - Tri - Insolvency and Bankruptcy

Permission for withdrawal of present matter - Stay of constitution of Committee of Creditors - CIRP process withdrawn - HELD THAT - It would be necessary to consider the facts as they happened i.e., in chronological order. The Application bearing CP (IB) No 262/9/HDB/2019 was filed by the Operational Creditor M/s. Sri Chaitanya Chlorides u/s 9 of the Code against the Corporate Debtor on 23.04.2019. After affording an opportunity of being heard to the Corporate Debtor, this Adjudicating Authority has admitted the said Application vide its order dated 16.12.2019. Thereafter few more Applications bearing CP (IB) No. 736/9/HDB/2019, CP(IB) No. 774/9/HDB/2019 etc., were filed u/s 9 by the Operational Creditors of the Corporate Debtor including Applicants in IA No. 178/2020 and 179/2020 being considered in this common order. These applications U/s. 9 were considered by this Adjudicating Authority and in view of the initiation of CIRP in the case of the Corporate Debtor and appointment of IRP in CP(IB) No 262/9/HDB/2019 vide order dated 16.12.2019, these Operational Creditors were directed to make their claims before the IRP, which were made by them. Any direction by this Adjudicating Authority to the IRP not to constitute the CoC before disposal of IA No. 177 /2020 as prayed in IA No. 176/2020 will be against judicial propriety and judicial discipline. Hon'ble Supreme Court in the case of UNION OF INDIA VERSUS KAMLAKSHI FINANCE CORPORATION LTD. 1991 (9) TMI 72 - SUPREME COURT have laid this down in unequivocal terms by saying the The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities.'' This Adjudicating Authority cannot and does not deem it proper to restrain the IRP from constitution of the CoC as per the directions of Hon'ble NCLAT - Application dismissed.

Summary

Issues:
1. Applications seeking various reliefs related to the insolvency resolution process and withdrawal of the corporate insolvency resolution petition.

Analysis:
1. The Tribunal received multiple applications related to the insolvency resolution process, including requests for stay, withdrawal of the petition, constitution of Committee of Creditors, and rejection of certain forms.

2. The first application, IA No. 176/2020, requested a stay on constituting the Committee of Creditors and closure of the CIRP process, but the Tribunal rejected this request based on judicial discipline and the direction of the Hon'ble NCLAT to constitute the CoC.

3. Subsequently, IA No. 177/2020 was closed in line with the NCLAT's direction regarding the constitution of the CoC. The Tribunal allowed the parties to submit another application for settlement and withdrawal of CIRP before the CoC, if necessary, following the provisions of the IB Code, 2016.

4. Applications bearing IA No. 178/2020 and IA No. 179/2020 were found to be contrary to the decision on IA No. 176/2020, and since IA No. 176/2020 was rejected, no further adjudication was required on the latter two applications, which were also closed accordingly.

5. The Tribunal emphasized the importance of following higher appellate authorities' orders unreservedly, as per the principle of judicial discipline, citing a relevant Supreme Court case. This principle guided the Tribunal's decision to reject the request to restrain the IRP from constituting the CoC, aligning with the NCLAT's specific direction in the case.

6. The judgment detailed the background of the case, including the initial application under Section 9 of the IB Code, subsequent appeals, settlement attempts, and the directions given by the NCLAT regarding the constitution of the CoC and continuation of the CIRP process.

7. Overall, the Tribunal's decision was based on upholding judicial discipline, respecting higher appellate authorities' directions, and ensuring compliance with the provisions of the IB Code, 2016 and relevant regulations in the context of the insolvency resolution process.