Olee Das vs Atul Auto Ltd & Ors
- CitationCompany Appeal (AT) (Ins) No.1496 of 2025
Ratio decidendi
The rule this decision rests on
Where the Resolution Professional seeks modification of an interim restraint on issuing Form G, the Tribunal will modify the restraint if the Committee of Creditors has been reduced to a financial creditor and an operational creditor and the disputed liability, even if crystallised in the amount presumed, would still exceed the threshold value under Section 4 of the Insolvency and Bankruptcy Code, 2016; a corporate debtor's appellant who has not contested the Section 9 application before the Adjudicating Authority cannot be heard to dispute the existence of the debt in those circumstances. Pending criminal proceedings concerning cheques issued by the corporate debtor do not, by themselves, bar admission of the Section 9 application where the net liability still exceeds the threshold. Before the Committee of Creditors votes on any resolution plan, the Resolution Professional must obtain fresh permission from the Tribunal. Only the Resolution Professional may represent the corporate debtor in proceedings under the Code at the stage of the corporate insolvency resolution process, so suspended directors must bring the Resolution Professional on record as the representative of the corporate debtor.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
In the matter of: Olee Das ...Appellant Vs. Atul Auto Ltd & Anr. ...Respondents
Present: Appellant: Mr. Omar Hoda, Mr. Aviral Jain, Advocates Respondent: Ms. Bhawana Sharma, Advocate for R-2
ORDER
(Hybrid Mode) 24.02.2026 - This appeal is preferred by the suspended director of the CD
who challenges an Order admitting the CD to CIRP under Section 9, IBC. The
appellant did not contest the matter before the adjudicating authority and in
effect it is an ex- parte order which is now under challenge.
2. On 26.09.2025, this Tribunal passed an interim Order which later came
to be clarified on 30.10.2025 as below:-
"In the meantime CoC may proceed in accordance with law, however before issuance of 'Form - G', leave of the Court be obtained".
3. The learned counsel for the RP, the second respondent, submits that the
COC since constituted is comprising of one financial creditor namely M/s. SBI
and including the only operational creditor who initiated the CIRP process, there
are only two claimants. In this scenario, the learned Counsel has taken out I.A. 2
No.552 of 2026 for modification of the Order dated 26.09.2025 and submits that
the RP may be permitted to issue Form - G.
4. We have heard the learned Counsel for the appellant and the first
respondent, the operational creditor. It appears that as between them an MOU
has been entered into for the payment of debts which the CD owes to the OC.
The Counsel for appellant submits that the appellant is even willing to negotiate
with M/s. SBI. The learned Counsel for the RP would now submit that as per her
instructions, claims have been received from other operational creditors to a tune
of about Rs.53.0 crores and they are now under verification. She also added that
the appellant had come up with an offer of settlement for the purpose of invoking
Section 12A, but the same has been rejected by the COC.
5. The learned Counsel for the appellant broadly submits that the foundation
for the claim is some pre-existing liability, towards payment of which the CD had
issued as many as 5 cheques in 2 lot and that there are criminal cases pending
as concerning the liability said to be arising out of these cheques. So far as these
issues relating to cheques are concerned, even the OC in his petition under
Section 9 has disclosed a dispute pertaining to 5th of the 5 cheques. The amount
involved in this cheque is about Rs.1.30 crores, and even if this amount is
considered as now crystalized, which is only presumed, the net liability would
still be more than the threshold value. And, the appellant has complicated its
position by not choosing to defend Section 9 before the Adjudicating Authority. 3
In this scenario, we are left with little option but to modify the earlier Order dated
26.09.2025 as clarified on 30.10.2025 and permit the RP to issue Form - G. We,
however, add that before the COC vote on the resolution plans, the RP may
approach the Court for fresh permission.
6. I.A. No.552 of 2026 is accordingly disposed of.
7. The suspended directors are now required to amend the memo of parties
and to bring them on record since it is only the RP/Respondent No.2 that can
represent the CD in proceedings under IBC at this stage.
List the matter on 4th May, 2026.
[Justice N. Seshasayee] Member (Judicial)
[Arun Baroka] Member (Technical)
[Indevar Pandey] Member Technical rs/beena
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