2021 (4) TMI 222 - Tri - Insolvency and Bankruptcy

Maintainability of application - Initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational creditors - special power of attorney (page 66 - 73) is not signed by the power of attorney holder Mr. Bhagwandas Patel - HELD THAT - Power of attorney is a legal instrument that empowering any specific person to act for and in the name of the person executing such instrument. Power of attorney is created for matters relating to property, tax payments, banking and legal proceedings etc. etc. The person who is executing such power of attorney or who grants such power is called as the donor and the person to whom such power is granted is called as attorney / agent / done. On perusal of the records it is found that the Special Power of Attorney executed on 27th June, 2019 is not signed by Mr. Bhagwandas Patel. Moreover, photograph of the Agent -Mr. Bhagwandas Patel is not affixed in the document, a such the power of attorney itself is bad in the eye of law and cannot be relied upon - Notwithstanding above, the applicant has not filed copy of the purchase order delivery challan to substantiate its claim. The applicant has also not put on record a copy of the partnership firm. The petition is not maintainable and deserves to be dismissed - Petition disposed off without costs.

Summary

Issues:
Claim under Section 9 of The Insolvency and Bankruptcy Code, 2016; Validity of Power of Attorney; Maintainability of the Petition.

Claim under Section 9 of The Insolvency and Bankruptcy Code, 2016:
The petitioner, an operational creditor, filed a petition under Section 9 of The Insolvency and Bankruptcy Code, 2016, against the respondent, a private limited company, for non-payment of dues related to the supply of UPVC windows and other products. The petitioner claimed that despite repeated follow-ups and demand notices, the respondent failed to clear the outstanding debt of ?5,16,648.64. The respondent made a partial payment of ?10,000, but the balance remained unpaid. The petitioner further demanded interest on the outstanding amount, totaling ?7,55,257.31. The petitioner supported its claim with documents like computation of dues, bank statements, general affidavit, quotation, invoice, and demand notice.

Validity of Power of Attorney:
The Adjudicating Authority noted that the petition was signed by a special power of attorney holder of the applicant partnership firm. However, upon examination, it was found that the special power of attorney was not signed by the power of attorney holder as required by the Power of Attorney Act, 1882. The document lacked the signature of the attorney and did not have the agent's photograph affixed, rendering it legally invalid. The judgment referenced the types of power of attorney, distinguishing between general and specific power of attorney, and highlighted the essential components of a valid power of attorney deed.

Maintainability of the Petition:
The Adjudicating Authority determined that the petition was not maintainable due to the invalidity of the power of attorney and the lack of essential documents like a copy of the purchase order delivery challan and the partnership firm. As a result, the company petition was dismissed and disposed of without costs. However, the judgment clarified that the dismissal on grounds of maintainability did not prevent the petitioner from seeking recourse through the appropriate forum to enforce its claim against the respondent, emphasizing the importance of adhering to the provisions of the Insolvency and Bankruptcy Code, 2016.