Holding that corporate debtor cannot maintain appeal under the Insolvency and Bankruptcy Code, the National Company Law Appellate Tribunal dismissed an appeal.
The appeal was filed by M/s Radius Infratel Pvt Ltd, which challenged an order passed by Adjudicating Authority admitting an application under Section 7 of the IBC moved by a financial creditor.
The Tribunal noted that the Supreme Court had held in Innoventive Industries Ltd vs ICICI Bank and others that corporate debtor cannot maintain appeal. It was held by the SC bench of Justice R F Nariman and Justice S K Kaul in that case as : "According to us, once an insolvency professional is appointed to manage the Company, the erstwhile Directors who are no longer in management, obviously cannot maintain an appeal on behalf of the Company. In the present case, the Company is the sole appellant. This being the case, the present appeal is obviously not maintainable"
In that view of the matter, the appellant sought to substitute the ‘Corporate Debtor’ with a shareholder of the Corporate Debtor and to transpose ‘Radius Infratel Private Limited’ through ‘Resolution Professional’ as a Respondent.
Since no such application for substitution was filed when matter was taken up on November 13, the Tribunal headed by Chairperson Justice S J Mukhopadhyaya dismissed the appeal as not maintainable, following the SC precedent. However, liberty was granted to shareholder or director of the corporate debtor to file appropriate application, if not barred by limitation.