The NCLAT, New Delhi opined that the application of Section 65 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC”) is maintainable after the application is filed under any of Sections 7, 9, or 10 of IBC. It is not necessary for the application to be admitted and for the Corporate Insolvency Resolution Process (CIRP) to commence to ensure the maintainability of the Application under Section 65.
Brief Facts:
The present appeal is against the order of NCLT vide which an application was dismissed stating that application under Section 65 of the IBC would only be maintainable after the main petition is admitted and CIRP has commenced.
Brief Background:
The Respondent had filed an application for resolution of an amount of Rs. 5 Crore against the Corporate Debtor.
During the pendency, the present Appellant (a homebuyer in one of the companies of the Corporate Debtor) sought the issuance of directions such as allowing impleadment it the company petition, dismissing the company petition, and imposing a penalty on the Financial Creditor, etc. The said application was dismissed by the NCLT. Hence, the present appeal.
Contentions of the Appellant:
It was contended that “initiate” as used in Section 65 falls under Section 5(11), implying the day on which the application for initiation of CIRP is filed, whereas the insolvency commencement date is the date on which such application is admitted.
Observations of the Tribunal:
The issue before the Tribunal was whether the application under Section 65 is maintainable after filing the application under Sections 7, 9, or 10 or whether it is maintainable only after admission of such application.
The Appellate Authority opined that the application of Section 65 is maintainable after the application is filed under any of Sections 7, 9, or 10. It is not necessary for the application to be admitted and for the CIRP to commence to ensure the maintainability of the Application under Section 65.
The decision of the Tribunal:
Accordingly, the appeal was allowed and the matter was remanded back to the Tribunal.
Case Title: Ashmeet Singh Bhatia v. Sundrm Consultants Pvt. Ltd. & Anr.
Coram: Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member)
Case No.: Company Appeal (AT) (Insolvency) No. 557 of 2021
Advocates for Appellant: Advs. Mr. Krishnendu Datta, Mr. Sonam Sharma, Ms. Ridhima Verma, Mr. Shashwat Tripathi, Ms. Varsha Himatsingha
Advocates for Respondents: Advs. Mr. Karan Bharioke, Mr. Raj Kamal, Mr. Aseem Atwal
Read Oder @LatestLaws.com
Picture Source :
