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2025 (4) TMI 879 - AT - Central ExciseEntitlement to continue with the Appeal and claim relief after order of NCLT approving the Resolution Plan has been passed - HELD THAT - The Mumbai bench of this Tribunal in the case of M/s Alok Industries Ltd 2022 (10) TMI 801 - CESTAT MUMBAI analysed in detail Rule 22 of CESTAT (Procedure) Rules 1982 and the case laws on the issue including those cited by the learned Advocate for the appellant observed that aforesaid Rule 22 should be applicable the moment the successor-in-interest with sufficient rights is appointed by NCLT to make an application for continuation of the proceeding. Conclusion - The appeals abate once the Interim Resolution Professional (IRP) is appointed and no application is filed by the IRP for continuance of the proceedings pending before the Tribunal. The appeals abate as per Rule 22 of CESTAT (Procedure) Rules 1982.
ISSUES PRESENTED and CONSIDERED
The core legal issue considered in this judgment is whether the appellant is entitled to continue with the appeals and claim relief after the National Company Law Tribunal (NCLT) has approved the Resolution Plan under the Insolvency and Bankruptcy Code (IBC), 2016. Specifically, the question revolves around the applicability of Rule 22 of the CESTAT (Procedure) Rules, 1982, which deals with the abatement of appeals when a party is adjudicated as insolvent or is undergoing a corporate insolvency resolution process. ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents: The legal framework primarily involves Rule 22 of the CESTAT (Procedure) Rules, 1982, which stipulates that an appeal or application abates if a party dies, is adjudicated as insolvent, or, in the case of a company, is being wound up, unless an application for continuance is made by the successor-in-interest or legal representative within sixty days. The Tribunal also referenced precedents, including the decision of the Mumbai bench in the case of M/s Alok Industries Ltd., which analyzed Rule 22 in detail. Court's interpretation and reasoning: The Tribunal interpreted Rule 22 to mean that once the NCLT appoints a successor-in-interest with sufficient rights, such as an Interim Resolution Professional (IRP), it is incumbent upon this successor to file an application for the continuation of proceedings. In the absence of such an application, the appeals abate. The Tribunal emphasized that the approval of a Resolution Plan by the NCLT results in the merging of the impugned orders into the NCLT's order, rendering the Tribunal functus officio regarding the appeals. Key evidence and findings: The Tribunal noted that no application for the continuation of proceedings was filed by the successor-in-interest, namely, the IRP appointed by the NCLT. This lack of application was pivotal in determining that the appeals abated under Rule 22. Application of law to facts: Applying Rule 22, the Tribunal concluded that since no application for continuance was filed by the IRP, the appeals filed by the appellant abated from the date of the approval of the Resolution Plan by the NCLT. The Tribunal also highlighted that the appellant sought relief from the Tribunal while simultaneously acknowledging the binding nature of the NCLT's order, which was inconsistent with the doctrine of merger. Treatment of competing arguments: The Tribunal considered the arguments presented by the learned counsel for the appellant, who contended that Rule 22 should not apply. However, the Tribunal found these arguments unpersuasive, given the clear language of Rule 22 and the established precedents. The Tribunal also noted the appellant's contradictory stance regarding the binding nature of the NCLT's order. Conclusions: The Tribunal concluded that the appeals abated as per Rule 22 of the CESTAT (Procedure) Rules, 1982, due to the absence of an application for continuance by the IRP. Consequently, the Tribunal dismissed the appeals. SIGNIFICANT HOLDINGS The Tribunal held that: "The appeals filed abate as per the Rule 22 of the CESTAT Procedure Rules, 1982, with effect from the date of the approval of the resolution plan by the NCLT." This holding underscores the principle that once a Resolution Plan is approved by the NCLT, the Tribunal loses jurisdiction over the appeals, and they abate unless a successor-in-interest files an application for continuance. Additionally, the Tribunal affirmed the principle that the impugned orders merge into the NCLT's order upon the approval of a Resolution Plan, further supporting the abatement of the appeals.
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