NCLAT New Delhi: No Point In Discussing An Issue, Even If Issue Is Attractive, After The Closure Of CIRP Proceedings

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, New Delhi comprising of Justice Rakesh Kumar Jain (Judicial Member) and Naresh Salecha (Technical Member), dismissed the appeal filed in State Bank of India vs. Ritesh Prakash Adatiya & Ors. The appeal was filed against the order dated 29.03.2023 passed by the National Company Law Tribunal (“NCLT”) Kolkata whereby an application by the IRP of McLeod Russel India Limited (Corporate Debtor) has been disposed of. The Appellate Tribunal held that when the CIRP Proceedings are ultimately closed and no such proceedings exist, there is no point in discussing the issue even if the issue may be attractive. Background Facts: NCLT Kolkata admitted the petition to initiate a Corporate Insolvency Resolution Process (“CIRP”) on 10.02.2023. It was filed by IL & FS Infrastructure Debt Fund (Financial Creditor) under Section 7 of IBC against McLeod Russel India Limited (Corporate Debtor). While the admission order of NCLT Kolkata was pending an appeal, the Insolvency Resolution Professional (“IRP”) of the Corporate Debtor made an application praying for payment of pre-CIRP dues during the CIRP. This application was disposed of with the observations that in order to keep the Corporate Debtor as a going concern in the interim and to prevent adverse consequences for the corporate debtor, the IRP is permitted to do the needful in regard to the release of the said dues as would be required in accordance with various legal provisions and if nothing else stands in the way. Further, in case any assistance is required from the Personnel of the Corporate Debtor, including the promoters and any other persons associated with the management of the Corporate Debtor in running it as a going concern, the same shall be sought by the IRP under Section 19 of IBC. NCLAT Verdict: The NCLAT dismissed the appeal and held that though the issue raised by the Appellant regarding whether the Adjudicating Authority has jurisdiction to pass an order in regard to payment of pre-CIRP dues during the CIRP may be attractive in the present case, no such issue survives. The issue did not survive after the order dated 15.05.2023 passed by NCLAT since the CIRP proceedings initiated by the order dated 10.02.2023 have ultimately been closed and at present, there are no CIRP proceedings, therefore, the reins of the company are in the hands of the company itself and not in the hands of the IRP. Case Title: State Bank of India vs. Ritesh Prakash Adatiya & Ors. Case No.: Comp. App. (AT) (Ins) No. 505 of 2023 & I.A. No. 1650, 1651, 3599 of 2023 Counsel for SBI: Mr. Avrojyoti Chatterjee, Mr. Rajiv S. Roy, Ms. Jayasree Saha, Mr. Siddharth, Mr. Zoheb Khan, Advocates Counsel for Respondent: Mr. Abhinav Tyagi, Advocate, and Mr. Alok Kumar K., Advocate Click Here to Read/Download Order

NCLAT New Delhi: No Point In Discussing An Issue, Even If Issue Is Attractive, After The Closure Of CIRP Proceedings

Sachika Vij

Tags