Mere fact that IBC Section 7 Application has been admitted and affirmed by NCLAT does not denude jurisdiction of Adjudicating Authority to examine application under Sec. 65 of IBC – Ashmeet Singh Bhatia Vs. Pragati Impex India Pvt. Ltd. and Anr. – NCLAT New Delhi
Hon’ble NCLAT holds that:
(i) The power under Section 65 of the Code can be exercised by the Adjudicating Authority only after satisfying that grounds as mentioned exist, if the Adjudicating Authority come to the conclusion that insolvency proceedings have been initiated fraudulently or with malicious intent for any other purpose other than for the resolution of insolvency of the Corporate Debtor, it can impose penalty as provided in the provision.
(ii) While exercising jurisdiction under Section 65, the Adjudicating Authority is also fully entitled to close CIRP process and pass all consequential order.
(iii) The observations of the Adjudicating Authority are that the Appellant is opposing the admission of the proceeding which admission has been affirmed by the Appellate Tribunal. The above does not denude the jurisdiction of the Adjudicating Authority to examine the allegations made in the Section 65 Application even after admission of the proceedings under Section 7.
(iv) The mere fact that Application has been filed at the time when plan is under consideration does not take away the jurisdiction of the Adjudicating Authority to consider the allegations and find out the truth, if any.