Not attending CoC Meetings

In this case, it was submitted that under Section 65 of IBC, 2016 only the conduct prior to the admission of CIRP is to be seen and the conduct of the Applicant after the admission of CIRP has no bearing for imposing penalty under Section 65 of IBC, 2016. The Adjudicating Authority held that for the purpose of considering a matter under Section 65 of IBC, all the Adjudicating Authority is required to see, whether the Applicant has filed the Application under Section 7, 9 or 10 as the case maybe with malicious or fraudulent intent or not. Section 65 of the IBC only uses the word ‘initiates’, and does not make any distinction between the stages of pre-admission or post-admission of CIRP. Further, from the wordings of the Section 65, it transpires that the provision is applicable not only on initiation of the Insolvency Resolution Process but not limited to and may extend to the period of Liquidation as the case may be. Hence, it would not be correct to say that under Section 65 of IBC 2016, only the conduct prior to the admission of CIRP is to be seen and the provision is not applicable to the conduct of the Applicant post-admission of CIRP.
It also held that the CIRP is a participatory process and that the sustained and repetitive act of Noticee of non-participation in the four meetings of the COC depict that it had left the Corporate Debtor in the lurch amidst the CIRP. The said repetitive acts of the Noticee clearly demonstrate that the Applicant of Section 9 Application herein was not interested in either taking forward or in conclusion of the CIRP of the corporate debtor in terms of its resolution or liquidation.