Adjudicating Authority while exercising jurisdiction under the Code is not required to return any finding of an offence within the meaning of Section 74 of IBC – Almas Global Opportunity Fund SPC Vs. CA Kannan Triuvengadam – NCLAT New Delhi
October 31, 2022
NCLAT held that Section 33, sub-section (3) uses the expression “may make an application to the Adjudicating Authority for liquidation order”. The Application which was filed by Respondent No.1 was as noted above not being confine to Section 33, sub-section (3), rather prayer for liquidation was an alternative prayer. The Adjudicating Authority was not prohibited from exercise of its powers as contained in other provisions of the Code referred in the Application. Further it held that the provision of the Code contemplates filing of a complaint by Board or the Central Government or any person authorized by the Government in this behalf. It is true that Adjudicating Authority while exercising jurisdiction under the Code is not required to return any finding of an offence within the meaning of Section 74, sub-section (3). It is a prerogative of the Special Court under Section 236 to try an office and award punishment if any. The Adjudicating Authority at best can draw attention of the Board or the Central Government to facts and features of a particular case to consider as to whether it is an appropriate case for filing a complaint within the meaning of Section 236, sub-section (2). The order passed by the Adjudicating Authority under paragraph 8.1(ii) has to be treated only a direction to the effect that order of NCLT be forwarded to the Board and Central Government to consider as to whether present is a fit case for initiating/ filing any complaint under Section 236, sub-section (2) of the Code. It is necessary to clarify that any observations made by Adjudicating Authority in the impugned order regarding ingredients of offence under Section 74, sub-section (3) are neither binding nor determinative of any issue when the Special Court where a complaint is filed proceed with the trial of offence. The observations made by the Adjudicating Authority has to be read only for the purpose of sending the copy of the order to the Board for consideration for filing a complaint and order of the Adjudicating Authority cannot be treated to any direction to initiate action under Section 74, sub-section (3), which is in the domain of the Board and Central Government as per the statutory Scheme of the Code.