The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Dr. Alok Srivastava (Technical Member) and Mr. Barun Mitra (Technical Member), while adjudicating an appeal filed in Subrata Maity v Mr. Amit C. Poddar & Ors., has held that the Adjudicating Authority can invoke its inherent powers to replace the Liquidator and to do substantial justice.
Mr. Subrata Maity ("Appellant") was the Liquidator of the Seam Industries Ltd. ("Corporate Debtor"). The Adjudicating Authority vide its order dated 22.09.2022 had replaced the Appellant with another Liquidator namely Mr. Amit C. Poddar. The Adjudicating Authority had noted that the Appellant was arrested by CBI, due to which 116 days were lost due the Appellant's incapability to act as a Liquidator.
The Appellant being the erstwhile Liquidator, challenged the Order dated 22.09.2022 before the Adjudicating Authority. The Appellant contended that he was not issued any notice and was not even served the copy of the Application filed by the Stakeholders Consultation Committee seeking appointment of Mr. Amit C. Poddar. Further, when Appellant was arrested he was granted bail immediately.
Decision Of The NCLAT
The Bench observed that as criminal prosecution is going on against the Appellant and he was arrested by the CBI, the Adjudicating Authority did not err in replacing the Appellant with another Liquidator. The Liquidator does not have any personal right to continue in the Liquidation Process. The reasons noted in the Impugned Order are sufficient to exercise even the inherent power by NCLT to replace the Liquidator. It is not a fit case to interfere in exercise of our Appellate Jurisdiction.
"Learned Counsel for the Appellant also contended that there is no provision in law for replacement of Liquidator by the Adjudicating Authority. The present is a case where inherent power can be exercised by the Adjudicating Authority to do substantial justice."
The Bench held that Adjudicating Authority has inherent power to replace the Liquidator. The Appeal was dismissed.
Case Title: Subrata Maity v Mr. Amit C. Poddar & Ors.
Case No.: Comp. App. (AT) (Ins.) No. 1234 of 2022
Counsel For Appellant: Mr. Amir Arsiwala, Mr. Yash Jariwala, Advocates
Counsel for Respondent: Mr. Bharat Gupta, Mr. Varun Tyagi, Advocates for R1. Mr. Rajesh Kr. Gautam, Mr. Anant Gautam, Mr. Nipun Sharma, Advocates for PNB