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2020 (12) TMI 155 - HC - Insolvency and BankruptcyReturn of Demand Draft - validity of the said demand draft has expired after not being encashed by the opponent - main petition was withdrawn - present petition is filed by the Director of the respondent No. 2 company - HELD THAT - Apart from the fact that there was no order sought at the time of withdrawal of the said petition by the learned Advocate for the petitioner with regard to the said demand draft furnished on behalf of the respondent No. 2 Company (original petitioner), as rightly submitted by the learned Advocate Mr. Dossani appearing for the respondent Canara Bank, the applicant who claims to be the Director for the respondent No. 2 Company would not have any locus standi to file the present application, more particularly when the management of the respondent no. 2 Company has already been suspended in view of the order passed by the NCLT in Company petition (IB) No. 299 of 2018, and the Resolution Professional is the only competent person to represent the Company. The present application is dismissed as being not maintainable and the applicant being not competent to file the present application.
Issues:
1. Maintainability of the Misc. Civil Application filed by a third party seeking the return of an expired Demand Draft. 2. Competency of the Director of the respondent Company to file the application after the dismissal of the main petition and initiation of Corporate Insolvency process. Analysis: 1. The Misc. Civil Application was filed by a third party seeking the return of an expired Demand Draft of ?5,00,000 issued to the respondent Bank. The Special Civil Application, which was disposed of earlier, did not address the issue of the Demand Draft. The respondent Bank challenged the maintainability of the application, arguing that the Resolution Professional under the Insolvency and Bankruptcy Code is the only competent person to represent the company under the IBC regime. The Court noted that the applicant, claiming to be the Director of the respondent Company, lacked the locus standi to file the application after the management of the company was suspended by the NCLT. Consequently, the Court dismissed the application as not maintainable, ruling that the applicant was not competent to file the same. 2. The Director of the respondent Company filed the application after the dismissal of the main petition and the initiation of Corporate Insolvency proceedings against the company. The applicant argued that the Demand Draft issued on behalf of the company was not encashed by the respondent Bank, and thus, requested its return. However, the Court found that the Resolution Professional, representing the company under the IBC regime, was the only competent authority to move any application on behalf of the company. Given that the management of the respondent Company had been suspended due to the Corporate Insolvency process, the Court held that the Director lacked the authority to file the application seeking the return of the Demand Draft. Consequently, the Court dismissed the application, emphasizing the need for the Resolution Professional to represent the company in such matters. This detailed analysis of the judgment highlights the key issues of maintainability and competency involved in the case, providing a comprehensive understanding of the legal reasoning and decision-making process followed by the Court.
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