A public announcement is required to be made immediately within 3 days from the date of appointment. However, the Regulation does not provide that in case the announcement is made after three days, it will become nullity – M/s Mantena Laboratories Ltd. Vs. Union of India – Telangana High Court

Hon’ble High Court held that this Court has carefully gone through the Insolvency and Bankruptcy Code, 2016 and the Regulations framed thereunder. It is true that a public announcement is required to be made immediately within three days from the date of appointment. However, the Regulation does not provide that in case the announcement is made after three days, it will become nullity. Section 60(5)(c) provides for an appeal in case of any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings. Therefore, there is an efficacious alternative remedy available to the petitioners to prefer an appeal.

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I. Case Reference

Case Citation : (2021) ibclaw.in 111 HC
Case Name : M/s Mantena Laboratories Ltd. Vs. Union of lndia
Appeal No. : Writ Petition No: 23816 of 2021
Judgment Date : 02-Nov-21
Court/Bench : High Court of Telangana
Present for Petitioner(s) : Sri. C Raghu
Present for Respondent(s) : Sri. N. Rajeshwar Rao, Asst. Solicitor General, Sri. V. S.R. Avadhani, Sri. V.V.S.N. Raju
Coram : CJ Satish Chandra Sharma and Smt. Justice P.Madhavi Devi
Original Judgment : Download

II. Full text of the judgment

ORDER
(Per the Hon’ble the Chief Justice Satish Chandra Sharma)

The petitioner before this Court has filed this present petition being aggrieved by the public announcement dated 12.08.2021 made by the Interim Resolution Professional under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulation, 2016.

The undisputed facts of the case reveal that respondent No.4 – Edelweiss Assets Reconstruction Company Limited has preferred an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for short, “the Code”) claiming an amount of Rs.26 43,25,000.11 ps., and a final order was passed on 06.03.2021 appointing Interim Resolution Professional to carry out the functions as mentioned under the Code. The order dated 06.08.2021 is the subject matter of an appeal i.e., Appeal No.214 of 2021 and it is pending before the Appellate Tribunal at Chennai.

The facts further reveal that keeping in view the regulations of 2016, the Interim Resolution Professional has made a public announcement on 12.08.2021 and the petitioners’ contention is that since the announcement was not made within three days from the date of appointment, all further proceedings stands vitiated.

This Court has carefully gone through the Insolvency and Bankruptcy Code, 2016 and the Regulations framed thereunder. It is true that a public announcement is required to be made immediately within three days from the date of appointment. However, the Regulation does not provide that in case the announcement is made after three days, it will become nullity. Section 60(5)(c) provides for an appeal in case of any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings. Therefore, there is an efficacious alternative remedy available to the petitioners to prefer an appeal.

This Court does not find any reason to entertain the present writ petition keeping in view the alternative remedy available to the petitioners and the writ petition is accordingly dismissed. However, it is made clear that any observation made by this Court in the present order will not come in the way of the parties and in case an appeal is preferred, the same has to be decided on merits in accordance with law.

Miscellaneous petitions, if any, pending in this writ petition shall stand closed. There shall be no order as to costs.

SD/-I. NAGALAKSHMI
ASSISTANT REGISTRAR


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