Ashok Advani vs S.H. Khatod Trust & Anr

For Appellant : Mr. Tishampati Sen, Mr. Mayur Shetty, Ms. Riddhi Sancheti and Ms. Mehak Huria, Advocates

ORDER

20.09.2018 This appeal has been preferred by the appellant 'Ashok

Advani', shareholder of 'M/s. Business India Publications Limited' (Corporate

Debtor) against the order dated 9th July, 2018 passed by the Adjudicating

Authority (National Company Law Tribunal), Mumbai Bench whereby an

application under 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter

referred to as the 'I&B Code') preferred by respondent 'S.H. Khatod Trust'

(Financial Creditor) has been admitted.

Learned counsel appearing on behalf of the appellant submits that an

application under Section 7 of the I&B Code filed on 29th December, 2017 by the

'Financial Creditor' which was admitted after about seven months of its filing on

9th July, 2018. Before admission of the application on 9th July, 2018, the parties

had already settled the matter as back as on 30th June, 2018, which was not 2

brought to the notice of the Adjudicating Authority. Therefore, according to him,

the application under Section 7 of the I&B Code as on the date of admission was

not maintainable in absence of any default.

Learned counsel appearing on behalf of the 'Financial Creditor' accepts

that the parties have already settled the matter on 30th June, 2018. However,

the respondent (Financial Creditor) had not brought this fact to the notice of the

Adjudicating Authority on the date of admission

In the present case as we find that before admission of the application

under Section 7 of the I&B Code i.e. 9th July, 2018, the parties had already

settled the matter on 30th June, 2018, we hold that the application under Section

7 of the I&B Code was not maintainable as on the date of admission of the

application. The impugned order dated 9th July, 2018 is accordingly set aside.

In effect, order (s) passed by Ld. Adjudicating Authority appointing 'Interim

Resolution Professional', declaring moratorium, freezing of account and all other

order (s) passed by Adjudicating Authority pursuant to impugned order and

action taken by the 'Resolution Professional', including the advertisement

published in the newspaper calling for applications all such orders and actions

are declared illegal and are set aside. The application preferred by the

Respondent under Section 7 of the I&B Code is dismissed. The Adjudicating

Authority will now close the proceeding. The 'Corporate Debtor' is released from

all the rigour of law and is allowed to function independently through its Board

of Directors from immediate effect.

Company Appeal (AT) (Insolvency) No. 489 of 2018 3

The Adjudicating Authority will fix the fee of 'Interim Resolution

Professional' and 'Corporate Debtor' will pay the fees for the period he has

functioned. The appeal is allowed with aforesaid observation and direction.

However, in the facts and circumstances of the case, there shall be no order as

to cost.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice Bansi Lal Bhat ] Member (Judicial)

/ns/gc/

Company Appeal (AT) (Insolvency) No. 489 of 2018