9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (6) TMI 1199 - AT - Insolvency and BankruptcyConstitution of CoC with a single Operational Creditor (can be done or not) - Seeking dismissal of the CIRP - the Company struck off for non-filing of the financial statements - HELD THAT - This Tribunal is of the earnest view that there is no provision in the Code for the Corporate Debtor to constitute the CoC with a single Operational Creditor, when it is seen from the record that despite the public announcement being made inviting claims from its stakeholders, the Appellant has not received a single Claim from the date of initiation of the Corporate Debtor into CIRP. As the CoC itself is not constituted and in the light of the fact that not a single Claim was received by the IRP even after the public announcement, as well as the fact that the Corporate Debtor Company has been struck off from the Registrar of Companies, this Tribunal is of the considered view that the CIRP may be closed with respect to the subject company. The order of the Adjudicating Authority is set aside and the Company is released from all rigors of CIRP - Appeal allowed.
Issues Involved:
The issues involved in the judgment are the dismissal of an Application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 by the Adjudicating Authority, the constitution of the Committee of Creditors (CoC) with a single Operational Creditor, the lack of claims received by the Insolvency Resolution Professional (IRP), and the closure of the Corporate Insolvency Resolution Process (CIRP) due to the Corporate Debtor being struck off by the Registrar of Companies. Issue 1: Dismissal of Application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016: The Insolvency Resolution Professional (IRP) appealed against the order of the Adjudicating Authority which dismissed the Application under Section 60(5) of the Code. The Adjudicating Authority observed that the IRP had not taken enough steps to conduct the CIRP proceedings in relation to the Corporate Debtor, whose name had been struck off by the Registrar of Companies. The Adjudicating Authority stated that it had no power to review or recall its order. The IRP was directed to move an application to restore the name of the Company under Section 252 of the Companies Act, 2013. The Adjudicating Authority rejected the prayer seeking dismissal of the order passed by the Tribunal. Issue 2: Constitution of Committee of Creditors (CoC) with a Single Operational Creditor: The Appellant argued that the findings of the Adjudicating Authority regarding the constitution of the CoC with a single Operational Creditor were incorrect. The Appellant highlighted that no claims were received by the IRP, and the Corporate Debtor had been struck off for non-filing of financial statements. The Adjudicating Authority's decision was challenged, emphasizing that there was no provision in the Code for the Corporate Debtor to constitute the CoC with a single Operational Creditor. Issue 3: Lack of Claims Received by the Insolvency Resolution Professional (IRP): The Appellant informed the Tribunal that no claims were received by the IRP despite public announcements inviting claims from stakeholders. The Appellant had only received Rs.20,000 from the Operational Creditor and was spending out of pocket. The Tribunal noted that not a single claim was received by the IRP from the date of initiation of the Corporate Debtor into CIRP. The absence of claims, coupled with the Corporate Debtor's status as struck off by the Registrar of Companies, led the Tribunal to consider closing the CIRP. Issue 4: Closure of Corporate Insolvency Resolution Process (CIRP) due to Corporate Debtor Being Struck Off: The Tribunal concluded that in the absence of the CoC being constituted and no claims being received by the IRP, along with the Corporate Debtor's status as struck off by the Registrar of Companies, the CIRP may be closed with respect to the subject company. The Appeal was allowed, the order of the Adjudicating Authority was set aside, and the Company was released from all rigors of CIRP. All pending Applications and Interlocutory Applications were closed.
|
