Change the name of Corporate Debtor before filing CIRP, when a company chooses to file an application under the section 10 it should maintain status quo as on date of filing of the application – Prithiviraj Spinning Mill Private Limited Vs. Indian Overseas Bank, Coimbatore & Ors.- NCLT Chennai Bench
December 9, 2020
NCLT held as to why there is a change of name of the Corporate Debtor when it is filing section 10 application. It observed that the change of name of the Corporate Debtor and its registered office pending disposal of the application has great direct and indirect impact. If the application is admitted, being a proceeding in rem, it is binding upon the public at large. The stakeholders, who are not party to the application, would not be able to file their claims since they may not be able to identify the Corporate Debtor in its new name. The NCLT suggested that section 10 be tightened to avoid misuse such that when a company chooses to file an application under the section 10 it should maintain status quo as on date of filing of the application. The AA dismissed the application asit cannot pass an order of CIRP against Prithiviraj Spinning Mill Private Limited which is not in existence asondate.