Sansar Chand Sharma vs Anurag Chandra & Ors
- CitationCompany Appeal (AT) (Insolvency) No. 608 of 2019
Ratio decidendi
The rule this decision rests on
The Adjudicating Authority, having admitted an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, and having thereby triggered the Corporate Insolvency Resolution Process, cannot re-open the question of admission and set aside its own admission order on an application seeking dismissal of the petition; the proper remedy against such an admission is an appeal to the superior forum. Where a Section 7 petition has been admitted and the Corporate Insolvency Resolution Process initiated, a subsequent application to dismiss the petition is not to be entertained by the Adjudicating Authority, since the admission order cannot be reopened by the same authority. A later Section 7 petition filed by a partner in his individual capacity, after an earlier petition by the firm was rejected, was not shown to be wrongly admitted: the later admission order took note of the earlier rejection, and no ground was found to revisit the admission on merits.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Sansar Chand Sharma ...Appellant
Vs.
Anurag Chandra & Ors. .... Respondents
Present:
Appellant: None Respondents: Ms. Manisha Chaudhary, Mr. Mansumyer Singh and Mr. Himanshu Handa, Advocates for R-1.
O R D E R
24.10.2019 :
1. The Appellant - 'Sansar Chand Sharma' Director of suspended Board
of Corporate Debtor- 'Affinity Beauty Salon Private Limited' has filed this
appeal. When this appeal was moved before the Tribunal, on 31.05.2019, in
view of the submissions made, inter alia following was recorded:
"Learned Counsel for the Appellant submits that with regard to
the debt amount M/s. ACPC Enterprises earlier moved before the
Adjudicating Authority by filing an application under Section 7 of
the Insolvency and Bankruptcy Code, 2016 (I&B Code), which
was rejected on 10th November, 2017. Thereafter, the Partner of
M/s. ACPC Enterprises in his individual capacity, i.e., Mr.
Anurag Chandra moved an application under Section 7, which
was admitted on 14th December, 2018. When this was brought
1 Company Appeal (AT) (Insolvency) No. 608 of 2019 to the notice of the Adjudicating Authority, the prayer for recall of
the order of admission was rejected by impugned order dated
2nd May, 2019."
2. Respondent No. 1 has appeared and filed the reply.
3. On 24.09.2019 none was present for the Appellant. Even today
earlier when matter was called none appeared for the Appellant and even
on the second call nobody is present for the Appellant, nor the Appellant is
himself present.
4. Learned Counsel for the Respondent states that the 330 days period
prescribed for completing Corporate Insolvency Resolution Process would
expire on 10.11.2019. He states that in the process the Appellant has also
filed the Resolution Plan as a Resolution Applicant. We have gone through
the impugned order which is at Page 69 (Annexure A1) and reads as
under:-
"Order
CA-816 (PB)/2019
This is an application with a prayer to dismiss
CP No. (IB)-786(PB)/2018. As a matter of fact, the application
was admitted on 14.12.2018 and once the CIRP has been
triggered by admission of the petition on behalf of the financial
creditor under Section 7 then the proper course for the
applicant is to challenge the order before any superior forum.
No such request made in this application can be entertained
once the petition stands admitted.
Accordingly, the application is dismissed."
2
Company Appeal (AT) (Insolvency) No. 608 of 2019
5. By the impugned order, the Adjudicating Authority (National
Company Law Tribunal), Principal Bench, New Delhi declined to entertain
the application to dismiss the application as vide its earlier order dated
14.12.2018 (Annexure A-2) Corporate Insolvency Resolution Process was
initiated after admitting the application. It cannot be said that this
impugned order is in any manner wrong. The adjudicating authority cannot
re-open the question of admission of Section 7 application and set aside its
own admission of the application which was under Section 7 of the
Insolvency and Bankruptcy Code, 2016. We do not find any error in the
impugned order.
6. With regard to the submissions by Appellant as made on 31.05.2019
which have been noted and reproduced above even if we were to look into
the merits of the application which was not entertained by the Adjudicating
Authority, it can be seen that earlier Adjudicating Authority had rejected
the Section 7 application which was filed by M/s ACPC Enterprises
(Annexure 7) as an unregistered partnership firm and amount was claimed
as share subscription amount and Financial Debt. Subsequently, the
partner of the Unregistered Partnership firm 'Anurag Chandra', Financial
Creditor filed Company Petition and the order dated 14.12.2018 was passed
by the Adjudicating Authority admitting the Section 7 application. The
subsequent order admitting Section 7 application took note of the earlier
rejected application of unregistered partnership. As such on merits also
3 Company Appeal (AT) (Insolvency) No. 608 of 2019 there is nothing to have a relook at the order admitting Section 7
application. There is no substance in this appeal.
The appeal is dismissed with the observations as above.
[Justice A.I.S. Cheema] Member (Judicial)
[Kanthi Narahari] Member (Technical)
[V. P. Singh] Member (Technical)
sa/md
4 Company Appeal (AT) (Insolvency) No. 608 of 2019
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