Can Suspended Director of Corporates Debtors file an application for Consolidation the CIRP/ Group Insolvency? – Mr. Gajjala Yoganand Vs. Mr. Birendra Kumar Agarwal, RP of Manjeera Retail Holdings Pvt. Ltd. and Ors. – NCLT Hyderabad Bench
November 29, 2024
Hon’ble NCLT Hyderabad Bench held that:
(i) The Applicant, being the suspended director of both companies, has no role in the management or operations of the companies and is not a stakeholder in the CIRP for either of the Corporate Debtors.
(ii) In this case, if the CoCs, exercising their commercial wisdom, do not perceive any benefit in consolidating the CIRPs, their decision should be respected and not substituted by the claims of the suspended director, regardless of how compelling or reasonable they may appear—which, in fact, they are not.
(iii) Determination of economic benefit to the stakeholders can only be done by the CoCs of the respective Corporate Debtors with their commercial wisdom.
(iv) The decision to consolidate, or not, rests with the CoCs, who are not only better equipped to make such determinations but also have a vested interest in the outcome, and whose commercial wisdom is paramount in insolvency matters and beyond judicial review.
