Case Reference Case Name : Sharad Gupta Vs. Mr. Tajas Jatin Parikh-IRP Company Appeal : Company Appeal (AT) (Insolvency) No. 207 of 2019 Appellant : Sharad Gupta Respondent : Mr. Tajas Jatin Parikh-IRP Order Date : 01-Mar-19 Court/Bench : NCLAT,…
The Respondent- Mr. Amit Kumar Malik, an allottee of the Real Estate, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“I&B Code” for short) for initiation of the ‘Corporate Insolvency Resolution Process’ against ‘M/s. Kindle Developers Pvt. Ltd.’- (‘Corporate Debtor’). The Adjudicating Authority (National Company Law Tribunal), New Delhi Bench, by impugned order dated 9th March, 2018 admitted the application which is under challenge.
In case application under Section 12A is not approved by 90% of Committee of Creditors and the withdrawal of application under Section 7 is not allowed by the Adjudicating Authority. If the Committee of Creditors approved the application under Section 12A with majority voting share of 90%, the Adjudicating Authority cannot further look into the matter and is required to allow the applicant to withdraw the application, if it is filed. The appeal stands disposed of with aforesaid observations and liberty.
From the decision of the Hon’ble Supreme Court in ‘Brilliant Alloys Private Limited Vs. Mr. S. Rajagopal & Ors.’, it is clear that Regulation 30A cannot override the substantive provision of Section 12A. The Regulation has to be read alongwith the provision in Section 12A, which contains no such stipulation. No discrimination can be made for withdrawal of an application under Section 7 or Section 9 on the ground that the application was filed before a cutoff date or filed after a cutoff date. Such cutoff date has no nexus with the objective which is to be achieved.
The Adjudicating Authority (National Company Law Tribunal), Mumbai Bench held that the Resolution Professional wrongly disallowed the substantial claim in its entirety and directed the ‘Resolution Professional’ to re-examine the claim on the basis of the accounts and evidence of Operational Creditors and if the evidences corroborated the claim, the same should also be taken into account while finalising the total claim of Operational Creditors.
The Adjudicating Authority was not supposed to conduct a roving enquiry though it could have been within its rights to go for a limited exercise of sifting the material available before it for separating the grain from the chaff and to reject the spurious defense.
If the members of the ‘Corporate Debtor’ or the ‘creditors’ approach the company through the liquidator for compromise or arrangement by making proposal of payment to all the creditor(s), the Liquidator on behalf of the company will move an application under Section 230 of the Companies Act, 2013 before the National Company Law Tribunal.