Raju Verma vs Kaushalya Ahluwalia & Anr
- CitationCompany Appeal (AT) (Ins) No. 318 of 2019
Ratio decidendi
The rule this decision rests on
Where a financial creditor's application under Section 7 of the Insolvency and Bankruptcy Code has been settled and no Committee of Creditors has yet been constituted, the Tribunal may permit withdrawal of the application and dispose of it as withdrawn. The costs of the Interim Resolution Professional and the resolution process are to be borne equally by the corporate debtor and the financial creditor, the Interim Resolution Professional to furnish details of costs and fees payable by each party. Where the Adjudicating Authority's order appointing an Interim Resolution Professional and declaring moratorium is set aside on appeal, the orders consequential upon it, including the freezing of accounts and the actions taken by the Interim Resolution Professional, fall with it and are declared illegal and set aside, so that the corporate debtor is released from the moratorium and may function through its Board of Directors.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE MATTER OF: Raju Verma ....Appellant Vs. Kaushalya Ahluwalia & Anr. ....Respondents Present: For Appellant: Present but appearance not marked. For Respondents:
ORDER
24.04.2019: Learned counsel for the parties informed that draft would be
handed over by Appellant to the Respondent- Financial Creditor in course of
the day.
2. In view of the aforesaid fact, as the matter has been settled and since
Committee of Creditors has not been constituted, we allow the Respondent to
withdraw application under Section 7 of the I&B code and dispose of
application under Section 7 as withdrawn.
3. So far as fee and expenditure incurred by the Interim Resolution
Professional is concerned, Corporate debtor and Financial Creditor, both
parties will bear 50% each of the entire resolution cost. The Interim Resolution
Professional will give details of cost incurred and fee entitled to the parties.
4. The impugned order dated 19.03.2019 passed by the Adjudicating
Authority, (National Company Law Tribunal) Principal Bench, New Delhi is
set aside. The Adjudicating Authority will close the proceeding.
-2-
5. In the result, order(s) passed by the Adjudicating Authority appointing
'Interim Resolution Professional', declaring moratorium, freezing of account,
and all other order(s) passed pursuant to impugned order and action taken by
the 'Interim Resolution Professional', including the advertisement published
in the newspaper calling for applications and actions are declared illegal
and are set aside. The 'Corporate Debtor' is released from the rigour of
law and is allowed to function independently through its Board of Directors
from immediate effect.
6. The appeal stands disposed of with aforesaid observations. However,
there shall be no order as to cost.
[Justice S. J. Mukhopadhaya] Chairperson
[Justice Bansi Lal Bhat] Member (Judicial) sa/gc
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