Debabrata Das vs State Bank Of India
- CitationCompany Appeal (AT) (Insolvency) No. 286 of 2024
Ratio decidendi
The rule this decision rests on
The pendency of execution proceedings by a corporate debtor against a third party, which may yield assets exceeding the financial creditor's dues, is not a ground for keeping an appeal against an order admitting a Section 7 application pending or for staying that order; any assets realised in such execution belong to the corporate debtor and are to be prosecuted and dealt with by the Resolution Professional in accordance with law. A financial creditor's debt having been satisfied, the parties may take steps under Section 12A to withdraw the application, the decision to close the CIRP on that basis resting with the financial creditor. A suspended director of the corporate debtor may participate in the CIRP only by communicating with the Resolution Professional regarding meetings of the Committee of Creditors, as the appellate order does not otherwise confer any right of participation beyond that.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE MATTER OF: Debabrata Das ...Appellant Versus State Bank of India ...Respondent
Present: For Appellant : Mr. Dhananjaya Mishra, Mr. Ayan Rai, Mr. Ankan Rai, Advocates. For Respondent : Mr. Santosh Kumar Ray, Ms. Rituparna Sayal, Ms. Zeha Khan, Ms. Muskaan Saha, Ms. Kurti Guna, Advocates.
ORDER
(Hybrid Mode)
11.11.2024: This appeal has been filed against order dated 19.01.2024
passed by the Adjudicating Authority by which order an application filed by
the State Bank of India under Section 7 application has been admitted.
Appellant, who is suspended Director of the Corporate Debtor has filed this
appeal claiming that there is decree in favour of the Corporate Debtor which
is against Fairdeals, which have been already put in execution and certain
amount has been realised and Fairdeals has valuable assets, and amount can
be realised much more than dues owed to the Bank. Fairdeals is already
under insolvency, which is challenged before this Tribunal and there is stay
on CoC.
2. The fact that the Corporate Debtor has decree in its favour, which was
put in execution in the year 2019 and is still in process is not a reason to keep
the appeal pending or staying the order admitting Section 7 petition.
Cont'd.../ 2
Whatever assets are realized in execution in favour of the Corporate Debtor
are to be deposited in the account of the Corporate Debtor and it is for the
Resolution Professional to prosecute the execution in accordance with law.
3. It is open for the parties to take steps under Section 12A in event the
Financial Creditor's debts are satisfied and the Financial Creditor takes the
decision to close the CIRP under 12A.
4. Recording the aforesaid, we close this appeal. In pursuance of the
impugned order dated 19.01.2024 steps be taken in the CIRP by the
Resolution Professional. Appeal is disposed of with observation and direction
as above.
5. Learned counsel for the Appellant submits that as a suspended
Director, the Appellants are entitled to participate in process of CIRP. It is
open for the Appellant to communicate with the RP with regard to meeting of
the CoC, if any. Appeal is disposed of.
[Justice Ashok Bhushan] Chairperson
[Barun Mitra] Member (Technical)
[Arun Baroka] Member (Technical) Archana/nn
Company Appeal (AT) (Insolvency) No.286 of 2024
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