Section 7, 9 or 10 CIRP application filed prior to IBC Amendment Ordinance dated 04.04.2021 will have precedence over Pre-Packaged Insolvency application under Section 54C of IBC – CHD Developers Ltd. Through Gaurav Mittal (MD) – NCLT Principal Bench
The Adjudicating Authority held that on a reading of the objects and reasons, one factor is clearly discernible that the Government wanted a hybrid method of Insolvency Resolution Process which includes creditors in control (Section 7, 9 or 10) as well as debtors in control (PPIRP). The Government opted for the hybrid method by bringing this Ordinance. Now the question is as to how the hybrid method should work? While bringing the amendment into force the Parliament in its wisdom perceived a situation where the Adjudicating Authority will be faced with the dilemma as to how the matter should be resolved if there are applications are filed pending under IBC & Chapter IIIA as the case may be. It is a situation of FC in control versus the CD in control. The pre-package application under Chapter III-A which has been filed on 12.07.2022, cannot take precedence over the Section 7 of IBC application which was filed on 21.10.2020, and remained pending though heard and reserved and re-heard on a number of occasions. The Section 7 IBC application filed and in the case will have to be given precedence over the pre-package application.
