CIRP cannot be challenged other than the Creditors of the company :NCLAT
Financial creditors of a corporate debtor would not come under the definition of aggrieved person so as to enable them to challenge an application of admission of Corporate Insolvency Resolution Process. The judgement passed by the NCLAT New Delhi (principle bench), in its decision in Srei Multiple Asset Investment Trust vs. IDBI Bank Ltd. & Ors. (Company Appeal (AT) (Insolvency) No. 666 of 2019) by Hon’ble Shri Justice S.J. Mukhopadhaya
The facts of the case were such that – Financial Creditor/IDBI Bank Limited had filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 for initiation of the ‘Corporate Insolvency Resolution Process against ‘M/s. Odisha Slurry Pipeline Infrastructure Ltd./Corporate Debtor alleging a default in paying the financial debt. M/s. SREI Infrastructure Finance Limited documented a mediation appeal to go against the supplication. Nonetheless, it was not engaged by the Adjudicating Authority (NCLT). Ld. counsel for the Appellant fought that the case of the Financial Creditor was considered by the ‘Goal Professional’ in the ‘CIRP’ which was started against ‘Essar Steel India Limited’ and was forthcoming before the Adjudicating Authority. In this way, as per learned direction for the Appellant, for a similar case sum, the Financial Creditor can’t record an application under Section 7 against Corporate Debtor.
Adjudicating Authority dismissed such accommodation without any record on the side of such request as was taken by ‘M/s. SREI Infrastructure Finance Limited’ (not the current Appellant). The Adjudicating Authority conceded the application under Section 7 by reviled request dated fourteenth May 2019 which is under challenge.
Appellant has accepted a comparative supplication as was taken by ‘M/s. SREI Infrastructure Finance Limited’ before the Adjudicating Authority. In any case, as we find that ‘IDBI Bank Limited’ had likewise conceded credit to the Corporate Debtor, we hold that the application under Section 7 recorded by the ‘IDBI Bank Limited’ has been properly conceded. Comparable supplication was taken by the ‘Corporate Debtor’ that the ‘IDBI Bank’ had recorded its case before the ‘Goal Professional’ of ‘Essar Steel India Limited. Notwithstanding, from the record and the judgment passed in ‘Essar Steel India Limited’, we track down that no such case was made by ‘IDBI Bank Limited’ in regard to the case sum as demonstrated against Corporate Debtor.
The application under Section 7 has likewise been encased by the Appellant, wherein the subtleties of the advance taken by the Corporate Debtor have appeared. The Adjudicating Authority has additionally seen that the advance was taken by the ‘Corporate Debtor was not discounted and the ‘Corporate Debtor’ defaulted to pay the obligation, which isn’t in question.
Corporate Debtor who is bothered gatherings has not favoured any appeal under Section 61 of the ‘I&B Code’. One of the Financial Creditors/appellants thus has tested the request for confirmation under Section 7 who can’t be held to be a wronged individual. As no case has been made out by the Appellant, the appeal is excused.