Srei Equipment Finance Limited vs Roadwings International Pvt Ltd

[Arising out of the Impugned Order dated 21.11.2024 passed by the Adjudicating Authority, National Company Law Tribunal, Kolkata Bench in C.P. (IB) No. 224(KB)/2023] In the matter of: Srei Equipment Finance Limited "Viswakarma" 86C, Topsia Road (S), Kolkata- 700086 .... Appellant Versus

Roadwings International Pvt. Ltd. 8 Camac Street Kolkata - 700017 .... Respondent Present:

For Appellant : Mr. Arun Kathpalia, Sr. Advocate with Ms. Vivya Nagpal, Mr. Aditya Kanodia, Ms. Diksha Gupta, Mr. Syed Sarfaraz Karim, Ms. Osheen Jain and Ms. Suparna Sardar, Advocates.

For Respondent : Ms. Swati Dalmia, Mr. S. Rai and Ms. Safura Ahmed, Advocates.

JUDGMENT

(Hybrid Mode)

Per: Barun Mitra, Member (Technical)

The present appeal filed under Section 61 of Insolvency and

Bankruptcy Code 2016 ('IBC' in short) by the Appellant arises out of

the Order dated 21.11.2024 (hereinafter referred to as 'Impugned

Order') passed by the Adjudicating Authority (National Company Law Tribunal, Kolkata Bench-II) in C.P. (IB) No. 224(KB)/2023. By the

impugned order, the Adjudicating Authority has dismissed the

Section 7 application filed by the Appellant- Srei Equipment Finance

Ltd. for initiation of insolvency resolution proceedings against

Roadwings International Pvt. Ltd.-Corporate Debtor. Aggrieved by

the impugned order, the present appeal has been preferred by the

Appellant.

2. Coming to the chronological sequence of events and the factual

matrix of the case at hand which are relevant to be noticed for

consideration of the issues raised by rival parties, we notice that the

Reserve Bank of India ("RBI" in short) issued a Press Release on

04.10.2021 by which the RBI had superseded the Board of Directors

of the Financial Service Provider/Appellant-Srei Equipment Finance

Ltd. ("SEFL" in short) and appointed Shri Rajneesh Sharma as the

Administrator of SEFL. Soon thereafter on 08.10.2021, RBI filed an

application vide CP (IB) No. 295 of 2021 before the Adjudicating

Authority seeking initiation of Corporate Insolvency Resolution

Process ("CIRP" in short) of the Appellant-SEFL. The above

application was admitted by the Adjudicating Authority on

08.10.2021 and the management of the Appellant was vested in the

Page 2 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 Administrator and the said order appointed Shri Rajneesh Sharma

as the Administrator of SEFL to carry out the functions as

contemplated under the IBC. The Administrator of SEFL issued a

Power of Attorney ("POA" in short) in favour of an officer of the

Appellant by the name of Shri Sohan Kumar Jha ("Sohan Jha" in

short) on 28.03.2023 for initiating and defending legal proceedings

under the provisions of IBC for and on behalf of the Appellant-SEFL.

Thereafter, on 11.08.2023, the Adjudicating Authority approved the

resolution plan submitted by National Asset Reconstruction

Company Ltd. ("NARCL" in short). In terms of this plan approval

order, the Administrator was to stand discharged from his duties

with effect from the date of this order i.e. 11.08.2023. The plan of

NARCL provided for the constitution of an Implementation and

Monitoring Committee ("IMC" in short) to manage the affairs of SEFL

as a going concern. In the second meeting of the IMC held on

17.08.2023, the POA of 28.03.2023 issued by the Administrator in

favour of Sohan Jha was ratified and confirmed. Thereafter, on

04.11.2023, a Section 7 petition vide CP(IB) No. 224 of 2023 was filed

by Sohan Jha on behalf of the Appellant which was then under the

management of IMC. This Section 7 application was filed for

Page 3 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 initiation of CIRP against the Corporate Debtor-Roadwings

International Pvt. Ltd. ("RIPL" in short) which had availed certain

loan facilities from SEFL for which four Financial Agreements had

been signed between the period 15.04.2017 to 15.07.2019.

Subsequently, on 26.02.2024, the IMC was dissolved and a new

Board of Directors of the Appellant was constituted. On appointment

of the new Board of Directors, the said Board in its meeting held on

very date of its appointment i.e. 26.02.2024 passed a resolution

ratifying and accepting all the acts of the IMC and also ratified the

POA issued in favour of Sohan Jha. The new Board of Directors also

passed a resolution on 28.03.2024 authorising the Chief Executive

Officer ("CEO" in short) to take all action relating to the legal and

regulatory matters of the company and the newly authorised CEO

issued a fresh POA on 16.04.2024 to Sohan Jha. The appointment

of the fresh Board of Directors and passing of the Board Resolution

dated 26.02.2024 by it was also brought to the knowledge of the

Adjudicating Authority by way of a supplementary affidavit on

18.05.2024. On 21.11.2024, the Adjudicating Authority dismissed

the Section 7 petition vide CP No. 224 of 2023 filed by the Appellant

on the ground that the application had been filed without a

Page 4 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 subsisting valid authorization by the POA holder. Aggrieved by the

impugned order, the present appeal has been preferred by the

Appellant.

3. Making submissions on behalf of the Appellant, Shri Arun

Kathpalia, Ld. Sr. Counsel submitted that in terms of the resolution

plan submitted by NARCL which had been approved by the

Adjudicating Authority, the IMC was responsible for overseeing the

management and control of the affairs of SEFL as a going concern

until the closure of the implementation of the plan. Thus, the IMC

was deemed to have all the powers vested with the Resolution

Professional ('RP' in short) to initiate and conclude litigation

proceedings under the IBC on behalf of the Appellant. The IMC in its

second meeting held on 17.08.2023 had confirmed and ratified the

appointment of Sohan Jha through POA by the former Administrator

to pursue the Section 7 proceeding on behalf of the Financial Creditor

company. It was further submitted that once the IMC stood dissolved

and the management of the resolved Financial Creditor Company

was handed over to a fresh Board of Directors, this fresh Board also

ratified and accepted all the acts of the IMC by passing a resolution

to that effect, thus validating all actions taken by the IMC including

Page 5 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 the confirmation and ratification of the appointment of Sohan Jha as

POA holder. Thereafter, the fresh Board of Directors authorised its

new CEO to pursue all legal and regulatory matters on behalf of the

resolved Financial Creditor company and the new CEO had issued a

fresh POA on 16.04.2024 authorising Sohan Jha as the attorney

holder. The fresh Board of Directors of SEFL had not only ratified the

POA but also ratified the filing of Section 7 application. Assailing the

impugned order, it was contended that the Adjudicating Authority

had erroneously failed to appreciate that there was a valid

authorisation held by Sohan Jha in his favour to function like an

authorised representative by virtue of being a POA holder.

Submission was pressed that the statutory provisions of IBC clearly

authorises the RP to appoint other professionals as may be necessary

to keep the Corporate Debtor running as a going concern including

taking assistance and cooperation of the officers and employees of

the Corporate Debtor for institution and continuation of legal

proceedings on behalf of the Corporate Debtor. In the present case

too, Sohan Jha as an attorney holder was an employee of the

Corporate Debtor company. The POA holder merely acted as an agent

Page 6 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 of the principal and was clearly entitled to file a Section 7 application

on the strength of the POA.

4. Refuting the submissions made by the Appellant, the Ld.

Counsel for the Respondent, Ms Swati Dalmia contended that the

Section 7 petition had been filed by Sohan Jha as a POA holder of

the Appellant-Financial Creditor on 04.11.2023 by which time the

validity of his POA had expired. It was emphatically asserted that

once the Administrator stood discharged on 11.08.2023, the powers

exercised by him granting POA to Sohan Jha on 28.03.2023 did not

subsist anymore. Since the Adjudicating Authority while approving

the resolution plan of SEFL on 11.08.2023 had discharged the

Administrator of his responsibilities, Sohan Jha as POA holder did

not have a valid authorisation and hence did not have the locus or

authority to file the Section 7 petition. It has been further contended

that though a Board Resolution had been passed by the IMC of the

Appellant-Financial Creditor ratifying and confirming the POA

authorising Sh. Rajneesh Sharma, the former Administrator to

authorise any person to act on his behalf to initiate or defend any

litigation pertaining to the business of the Financial Creditor, this

was not a valid authorisation as the IMC at best was only an agency

Page 7 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 set-up to oversee the monitoring of the implementation of the

resolution plan. The IMC not being a part of the Financial Creditor

company could not have authorised any person to file a Section 7

petition on their behalf. It was vehemently contended that the role of

the IMC cannot be expanded to treat it as part of the Financial

Creditor company which was under resolution.

5. We have duly considered the arguments advanced by the Learned

Counsel for the parties and perused the records carefully.

6. The moot point of consideration before us is whether there was

proper and valid authorisation vested with Sohan Jha the POA holder

to file the Section 7 petition before the Adjudicating Authority for

initiation of CIRP against the Respondent-RIPL.

7. It is the case of the Appellant that the resolution plan of SEFL

had duly authorised the IMC to exercise all duties, functions and

responsibilities of a RP. In exercise of its responsibility, the IMC had

adopted, ratified and confirmed the authority of Sohan Jha to file the

Section 7 petition on behalf of the Appellant in his capacity as POA

holder. While acknowledging that it was an undisputed fact that the

Section 7 petition had been filed on 04.11.2023 by Sohan Jha by

which time the Administrator had been discharged, submission

Page 8 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 was pressed that Sohan Jha was competent to sign and verify the

Section 7 petition since the POA dated 28.03.2023 was valid until

31.03.2024. Since the said POA agency was neither revoked nor

terminated, there was no defect in the authorisation enjoyed by

Sohan Jha as on 04.11.2023 to file the Section 7 petition on behalf

of the Appellant. Thus, the Section 7 application was filed by a

competent person who was validly authorised to do so.

8. Per contra, it is the case of the Respondent that though IMC

had similar powers as that of the RP in the conduct of CIRP process,

that does not mitigate or obviate the legal requirement of a duly

authorised individual to affirm the Section 7 petition as provided for

in the Insolvency and Bankruptcy (Application to Adjudicating

Authority) Rules, 2016. In the present case, the action taken by

Sohan Jha to file the Section 7 application as POA holder was not

based on a proper and valid authorisation since Shri Rajneesh

Sharma who had issued the POA in favour of Sohan Jha had been

discharged from acting as an Administrator with effect from

11.08.2023. It was contended that once a person who has issued a

POA ceases to hold the same capacity basis which the POA had been

issued, the authority delegated by him to the POA holder also comes

Page 9 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 to an end. It was contended that the powers and responsibilities of

the IMC in terms of the resolution plan also does not indicate any

right or obligation accorded to the IMC for filing any fresh application

or initiating of CIRP against any third party. Thus, when the IMC

itself was not authorised to initiate CIRP on behalf of Appellant-

Financial Creditor, the question of further delegation to POA holder

does not arise. Buttressing their argument further, it was canvassed

that because Sohan Jha had not taken steps based on valid

authorisation, this had necessitated the fresh Board of Directors to

ratify the authorisation by passing a resolution to this effect on

26.02.2024.

9. For making our analysis, it may be useful to advert our

attention to the POA document of 28.03.2023. When we look at the

POA document which has been placed at page 142 of the APB, we

find that the management of SEFL has been vested with the

Rajneesh Sharma, Administrator and that the Administrator in turn

authorised Sohan Jha, an employee of the SEFL to take action on

legal matters. A reading of the POA of 28.03.2023 shows that it

entrusted Sohan Jha as the POA holder to:

Page 10 of 28

Company Appeal (AT) (Insolvency) No. 46 of 2025 "a. To commence, initiate and/or file or withdraw litigation such as Civil suits, Criminal complaint(s) (including F.I.R.); Arbitration proceedings etc. in the Courts of Justice, Civil, Criminal or Revenue, Original or Appellate, Revision or Special Jurisdiction or Courts of Law, Tribunal, Judicial or Quasi-Judicial authorities/forums, and further for this purpose take all legal actions in such cases including making reference to Arbitration.

.....

f. To sign and verify plaints, ·written statements, counter- statements, Memoranda statement of claim, application/(s), petition/(s), affidavit/(s), opposition/reply or any other documents that may be required, including documents to prefer appeal and/or to apply for reviews and revisions, to apply for execution of any decree or order; ......

i. To issue notice, file/contest/sign vakalatnama /defend any legal proceedings under the provisions of IBC and to appear before National Company Law Tribunal (NCLT) and/or National Company Law Appellate Tribunal (NCLAT) including also before Insolvency and Bankruptcy Board of India for and on behalf of the Company.

AND GENERALLY to do or cause to be done, execute and perform all other acts, deeds and things in connection as the Company could do the same if the Company were personally present in the case in any court of law, judicial or Quasi-judicial authorities or authorities/forum including Consumer Dispute Redressal Forums or tribunals etc. The duration of these presents shall be till the end of the financial year 2023-2024 on 31st March 2024 or as long as the Constituted Attorney remains in its employment or in the employment of its subsidiary company or associate company whichever is earlier, however notwithstanding the above said duration, the Company shall have the power to revoke or renew this presents at any given time, without Page 11 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 stating any reason and without being entitled to any indemnity or compensation for any reason whatever."

(Emphasis supplied)

The above POA document of 28.03.2023 when perused shows that

the Administrator authorized Sohan Jha who happened to be an

officer of the Appellant to execute and perform all acts, deeds and

things for the company in any court of law, judicial or quasi-judicial

authorities until 31.03.2024 or for as long as he remained in its

employment.

10. Next we turn towards the relevant portions of the resolution

plan of SEFL which focuses on the constitution, responsibilities and

operational functioning of the IMC which came into play with the

approval of resolution plan submitted by NARCL as approved by the

Adjudicating Authority. The relevant excerpts of the resolution plan

which has been placed at page 27-34 of Appeal Paper Book ("APB"

in short) is as reproduced below:

6.1 Implementation and Monitoring Committee 6.1.1 Upon the occurrence of the NCLT Approval Date, a committee shall be constituted which shall comprise of the Administrator, 1 (One) nominee of the Resolution Applicant, 1 (one) nominee of IDRCL and 3 (three) nominees of the Approving Financial Creditors ("Implementation and Monitoring Committee"). On and from the NCLT Approval Date and till the Closing Date, the affairs of the Corporate

Page 12 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 Debtors shall be managed by the Implementation and Monitoring Committee. The Implementation and Monitoring Committee shall stand dissolved on Closing Date without any further action or deed required from the Corporate Debtors.....

.....

6.1.5 The newly appointed Implementation and Monitoring Committee shall be responsible for the supervision of the day to day affairs of the Corporate Debtors till the Closing Date. On and from the NCLT Approval Date till the Closing Date, the powers of the Erstwhile Board of the Corporate Debtors shall continue to remain superseded and shall be exercised by the Implementation and Monitoring Committee in accordance with the Resolution Plan.

SECTION 7: SUPERVISION OF AND IMPLEMENTATION THE RESOLUTION PLAN 7.1 The Implementation and Monitoring Committee shall have the responsibility of management of the Corporate Debtor and implementation and supervision of the Resolution Plan till the Closing Date and the Implementation and Monitoring Committee shall be deemed to have all the powers vested with a 'resolution professional' under the provisions of the Code.

.....

7.3. The implementation of the Resolution Plan shall be carried out by the Implementation and Monitoring Committee, till Closing Date. The responsibilities of the Implementation and Monitoring Committee shall include the following:

(a) To oversee the implementation of the Resolution Plan as approved by the NCLT and oversee the management of the affairs of the Corporate Debtors;

.......

(i) At all times, be empowered to do all such acts, deeds or things and exercise all rights and privileges and perform all Page 13 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 duties, which now or hereafter, may appertain to the Implementation and Monitoring Committee in order to accomplish the purpose of the Resolution Plan including signing of any Definitive Documents;

......

(l) undertake those tasks as directed by the Resolution Applicant which are required to maintain the Corporate Debtors as a going concern with sound financial health in the interim period;

........

(s) take all steps necessary to ensure that the value of the assets of the Corporate Debtors do not deteriorate.

(Emphasis supplied)

11. When we look at the above terms of the resolution plan, it

becomes clear that in terms of Clause 6.1.1 and 6.1.5 the IMC was

to inter alia comprise of the Administrator and that the powers of the

erstwhile Board of the Corporate Debtor was to be exercised by the

IMC in accordance with the resolution plan till the closing date.

Clause 7.1 also clearly sets out that the IMC shall be deemed to have

all the powers vested with the RP under the IBC and also authorized

to exercise all such powers of the RP. Clause 7.3 further elaborating

on the responsibilities of the IMC also clearly provided that the IMC

was to oversee the management of the affairs of the Corporate Debtor

and maintain it as a going concern besides taking all necessary steps

to ensure that the value of the assets of the Corporate Debtor does

Page 14 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 not undergo any deterioration and sign any definitive documents to

accomplish the purpose of the resolution plan.

12. We next advert our attention to the decision taken by the IMC

in its second meeting held on 17.08.2023 and the resolution

passed which is as reproduced below:

4. Authorise the Administrator to continue to undertake various activities as are required to ensure the Company's status as a going concern during the implementation of the Resolution Plan ......

"RESOLVED FURTHER THAT Mr. Rajneesh Sharma, the Administrator and Member of the Monitoring Committee be and is hereby authorised to file replies/affidavits/ application/rejoinder/surrejoinder/statement and or any other document or authorize any other personnel employee of SEFL or SIFL to act on his behalf, as may be required, for initiating or defending any litigations pertaining to the ordinary course of business of SEFL and SIFL and which do not pertain to the corporate insolvency resolution process of SEFL and SIFL or any matter arising in relation thereto, before National Company Law Tribunals, National Company Law Appellate Tribunal, High Courts, Supreme Court , other courts and any judicial and quasi-judicial authority."

"RESOLVED FURTHER THAT the Powers of Attorney already issued by the Administrator of SIFL and SEFL during the CIRP to the officials of the Company which authorize such persons in the ordinary course of business so that the activities of SEFL and SIFL are carried out as a going concern, be and are hereby ratified, confirmed and

Page 15 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 considered valid for the purpose for which the same have been granted for by the Administrator."

(Emphasis supplied)

13. The above minutes of the second meeting of the IMC makes it

amply clear that the IMC was fully aware of the authorisation made

by the former Administrator by issuing POA in favour of Sohan Jha

and desired to maintain continuity in respect of the POA. The

adoption by the IMC of the authorization given by the former

Administrator further validated the authority of Mr. Sohan Kumar

Jha as POA holder. Thus, when we look at the above Resolution

No.4 approved by the IMC, Sohan Jha who had been duly

authorised by former Administrator to file and initiate legal

proceedings on behalf of the Appellant also continued to enjoy the

same power of authorisation conferred upon by the IMC.

14. At the time when Sohan Jha filed the Section 7 petition, the

Administrator was not in place and the IMC was responsible for the

management of the Corporate Debtor company. Be that as it may,

IMC had authorised Sohan Jha to act on behalf of the Appellant vide

its resolution dated 17.08.2023. This conferment of authorisation

by the IMC gave validity to the filing of the Section 7 petition on behalf

of the Appellant by Sohan Jha. Further the said agency was neither

Page 16 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 expressly revoked nor terminated in terms of Section 201 of the

Indian Contract Act, 1872. Hence, the subsisting authorization was

adequate and the observation of the Adjudicating Authority that

the Section 7 petition suffered from lack of valid authorization

cannot be sustained.

15. It is pertinent to note that when the IMC was subsequently

dissolved on 26.02.2024 and a fresh Board of Directors of the

Appellant was reconstituted, the said Board of Directors on the

very same day ratified and accepted all the acts of the IMC by way

of Board Resolution including the POA issued in favour of Sohan

Jha. That the new Board of Directors had consciously approved the

POA issued in favour of Sohan Jha is further established by the

fact that the Board had also cancelled certain other authorisations

given by the IMC.

16. For better clarity, it may be constructive to notice the relevant

minutes of the meeting of the Board of Directors held on

26.02.2024 and the resolution passed as appearing at page 459-

460 of the APB which is as reproduced below:

BOARD TO TAKE NOTE OF THE HANDOVER FROM IMPLEMENTATION AND MONITORING COMMITTEE (IMC) ALONG WITH THE LIST OF DOCUMENTS

Page 17 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 The Board was informed that as per clause 6.1.1 of the Approved Resolution Plan as approved by the Hon'ble National Company Law Tribunal, Kolkata vide Order dated August 11, 2023, the Implementation and Monitoring Committee shall stand dissolved on the re-constitution of the Board.

....

CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT 98TH MEETING OF' THE BOARD OF DIRECTORS OF THE COMPANY The existing POAs/Authorizations issued by erstwhile Administrator/ Chairman of Implementation and Monitoring Committee.

"RESOLVED THAT in supersession of all the earlier resolution the following Power of Attorneys/ Authorizations issued by the Administrator/ Chairman of Implementation and Monitoring Committee (IMC) be and are hereby ratified and any POA or authorization issued not included in the following list stands cancelled:

Power of Attorney:

SL No. Name in PAN Office POA for Dept. whose Address the favour POA Region issued 5. Mr. Sohan AFHPJ HO All India Legal Kumar Jha 3708C

(Emphasis supplied)

17. A perusal of the above resolution shows that after a fresh

Board of Directors had been constituted on 26.02.2024, the said

Board had ratified and accepted all the acts of the IMC with regard

to POA/Authorisation issued by it. It therefore becomes clear that Page 18 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 the fresh Board of Directors had ratified the POA in favour of Sohan

Jha and also ratified the action of filing of Section 7 application by

the POA holder.

18. In this context, reliance has been placed by the Appellant on

the judgment of the Hon'ble Supreme Court of India in National

Institute of Technology Vs Pannalal Choudhury, (2015) 11

SCC 669 wherein the principal of ratification has been enunciated

as under:

"29. The expression "ratification" means "the making valid of an act already done". This principle is derived from the Latin maxim "ratihabitio mandato aequiparatur"

meaning thereby "a subsequent ratification of an act is equivalent to a prior authority to perform such act". It is for this reason, the ratification assumes an invalid act which is retrospectively validated."

It is the case of the Appellant that the ratio of the above judgment

correctly supports their case that the ratification of the POA

initially issued by the Administrator in favour of Sohan Jha by the

IMC on 17.08.2023 and subsequently by the fresh Board of

Directors on 26.02.2024 tantamount to valid authorisation of

Sohan Jha for filing the Section 7 petition. This fact was also

brought to the knowledge of Adjudicating Authority by the

Page 19 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 Appellant through a Supplementary Affidavit on 18.05.2024 as can

be seen placed at page 452 of APB.

19. In view of the judgment in National Institute of Technology

supra, it becomes clear that the word "ratification" by its definition

means the making valid of an act already done. Furthermore,

"ratification" relates back to the date of the original act so ratified

and hence once any action is ratified it implies that the action

stands retrospectively validated. In the present case, it therefore

follows that the Administrator having issued POA to Sohan Jha and

the POA having been ratified both by the IMC and the fresh Board

of Directors, actions taken by the POA holder cannot be said be

suffer from irregularities on grounds of lack of valid authorisation.

20. This brings us to the second limb of the argument canvassed

by the Respondent that the Adjudicating Authority had rightly

noticed that neither the RP nor the IMC could have delegated their

powers to a third party to file the Section 7 petition in the absence

of any express provision of law allowing them to do so. It was also

contended that the Adjudicating Authority had correctly relied on

the legal maxim of "delegatus non potus delegare". It was also

contended that the role of the IMC was limited to implementing

Page 20 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 the plan and could not have transcended to give authorisation to

any other person for initiation of CIRP by filing a Section 7 petition

against a third person.

21. It is the contention of the Appellant that the Adjudicating

Authority failed to notice that the statutory framework of the IBC

makes the RP responsible for the conduct of the entire CIRP;

manage the continued business operations of the Corporate Debtor

during CIRP; preserve and protect the assets of the Corporate

Debtor and for achieving this purpose, the RP is required to

represent and act on behalf of the Corporate Debtor with third

parties besides exercising rights for the benefit of the Corporate

Debtor in judicial, quasi-judicial or arbitration proceedings.

22. When we look at the statutory construct of IBC, the RP is

authorized under Section 25(2)(b) of the IBC to "represent and act on

behalf of the corporate debtor with third parties, exercise rights for the

benefit of the corporate debtor in judicial, quasi-judicial or arbitration

proceedings" for the over-arching purpose of preserving and

protecting the assets of the Corporate Debtor, including the

continued business operations of the Corporate Debtor. The RP

cannot be expected to practically perform its duties enshrined

Page 21 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 under Section 25(2)(b) of the IBC on a stand-alone basis and hence

for reasons of practical necessity, the RP is required to take the

assistance and cooperation of the officers and employees of the

Corporate Debtor for institution and continuation of legal

proceedings on behalf of the Corporate Debtors and represent the

Corporate Debtor before various forum. The IBC framework

acknowledges this practical necessity as is evident from the

scheme of Section 19(1) of the IBC which provides that "the

personnel of the corporate debtor, its promoters or any other person

associated with the management of the corporate debtor shall

extend all assistance and cooperation to the interim resolution

professional as may be required by him in managing the affairs of

the corporate debtor." Further, Section 17(b) of the IBC provides

that "the powers of the board of directors or the partners of the

corporate debtor, as the case may be, shall be suspended and be

exercised by the interim resolution professional." Section 20(2)(d) of

the IBC allows the RP to "issue instructions to personnel of the

corporate debtor as may be necessary for keeping the corporate debtor

as a going concern". Section 25(2)(d) of the IBC is yet another enabler

which allows the RP "to appoint accountants, legal or other

Page 22 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 professionals" which is further reinforced by Section 23(2) read with

Section 20(2)(a) of the IBC which also authorizes the RP to "appoint

accountants, legal or other professionals as may be necessary."

23. Attention has been adverted to certain judicial precedents by

the Appellant wherein it has been held that the Interim Resolution

Professional can delegate his duties and functions to the personnel

of the Corporate Debtor as may be required by him in managing

affairs of the Corporate Debtor. The relevant extracts of the judgment

of the High Court of Hyderabad in M/s Golden Jubilee Hotels Ltd.

Vs M/s EIH Ltd. 2018 SCC Online Hyd 315 which has been relied

upon by the Appellant is as reproduced below:

"22. In reply, Sri. S. Niranjan Reddy, learned senior counsel, would state that as per Section 25(2)(d) of the Code of 2016, it is the resolution professional who has to undertake appointment of legal or other professionals and therefore, Subodh Kumar Agrawal, the interim resolution professional, could not have delegated this statutory function to an employee of the first defendant company.

23. This contention however does not hold water. It may be noted that Section 25 of the Code of 2016 deals with the resolution professional appointed under Section 22 of the Code of 2016 and not an interim resolution professional appointed under Section 16 thereof. Further, the various duties of an interim resolution professional enumerated under Section 18 of the Code of 2016 clearly manifest that one individual cannot, by himself, undertake all of them. He

Page 23 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 would necessarily have to take the assistance of others. In this regard, it may be noted that Section 19 of the Code of 2016 mandates that the personnel of the corporate debtor, its promoters or any other person associated with its management shall extend all assistance and co-operation to the interim resolution professional as may be required by him in managing the affairs of the corporate debtor. In the light of this provision, the argument that the interim resolution professional cannot delegate some of his duties and functions to such personnel has to be rejected."

24. That the statutory provisions of IBC do not place any bar on

the RP to have petition filed through any authorised person has also

been affirmed by the Hon'ble Supreme Court in Rajendra

Narottamdas Sheth and Another Vs Chandra Prakash Jain

(2022) 5 SCC 600 after taking into account the judgment of this

Tribunal in Palogix Infrastructure Pvt. Ltd. Vs ICICI Bank in

CA(AT)(Ins) No. 30 of 2017. The Hon'ble Apex Court has laid down

that if a general authorisation to file any legal proceeding is granted

by way of a POA, it suffices for an attorney holder to file a Section 7

application under the IBC. This judgment is as reproduced below:

13.NCLAT in its judgment in Palogix Infrastructure held that a "power-of-attorney holder" is not competent to file an application under Section 7 on behalf of the financial creditor. However, Nclat made certain further observations, as reproduced below: (SCC OnLine Nclat para 41)

Page 24 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 "41. Insofar as the present case is concerned, the "Financial Creditor"-Bank has pleaded that by Board's Resolutions dated 30-5-2002 and 30-10-2009, the Bank authorised its officers to do needful in the legal proceedings by and against the Bank. If general authorisation is made by any "Financial Creditor" or "Operational Creditor" or "Corporate Applicant" in favour of its officers to do needful in legal proceedings by and against the "Financial Creditor"/"Operational Creditor"/"Corporate Applicant" in favour of its officer, mere use of word "Power of Attorney"

while delegating such power will not take away the authority of such officer and for all purposes it is to be treated as an "authorisation" by the "Financial Creditor"/"Operational Creditor"/"Corporate Applicant" in favour of its officer, which can be delegated even by designation. In such case, officer delegated with power can claim to be the "Authorised Representative" for the purpose of filing any application under Section 7 or Section 9 or Section 10 of "I &B Code"."

14.NCLAT was of the opinion that general authorisation given to an officer of the financial creditor by means of a power of attorney, would not disentitle such officer to act as the authorised representative of the financial creditor while filing an application under Section 7 of the Code, merely because the authorisation was granted through a power of attorney. Moreover, Nclat in Palogix Infrastructure has held that if the officer was authorised to sanction loans and had done so, the application filed under Section 7 of the Code cannot be rejected on the ground that no separate specific authorisation letter has been issued by the financial creditor in favour of such officer. In such cases, the corporate debtor cannot take the plea that while the officer has power to sanction the loan, such officer has no power to recover the loan amount or to initiate corporate insolvency

Page 25 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 resolution process, in spite of default in repayment. We approve the view taken by Nclat in Palogix Infrastructure.

15. In the present case, Mr Praveen Kumar Gupta has been given general authorisation by the Bank with respect to all the business and affairs of the Bank, including commencement of legal proceedings before any court or tribunal with respect to any demand and filing of all necessary applications in this regard. Such authorisation, having been granted by way of a power of attorney pursuant to a resolution passed by the Bank's Board of Directors on 6-12-2008, does not impair Mr Gupta's authority to file an application under Section 7 of the Code. It is therefore clear that the application has been filed by an authorised person on behalf of the financial creditor and the objection of the appellants on the maintainability of the application on this ground is untenable.

25. Keeping in view the complexity and multifarious nature of

tasks which are to be undertaken by the RP so as to successfully

conclude the insolvency resolution within tight time-lines set out

under IBC, the exigencies of the situation requires the RP to delegate

tasks if the situation so requires and the statutory framework of IBC

not only recognises this eventuality but also provides for meeting

such eventualities. Such delegation does not diminish the powers of

the delegating authority. Such delegation cannot be misconstrued to

be read as renunciation or abdication of powers by the delegator. The

POA document of 28.03.2023 had authorized Sohan Jha who

Page 26 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025 happened to be an officer of the Appellant to execute and perform all

acts, deeds and things for the company in any court of law, judicial

or quasi-judicial authorities until 31.03.2024 or for as long as he

remained in its employment. The POA holder merely acts as an agent

of the principal. Hence, when power is exercised by the POA holder,

which in the present case is Sohan Jha who happens to be an

employee of the company, his actions do not suffer from any

infirmity.

26. The Adjudicating Authority in the impugned order has

returned the finding that debt and default stood clearly established

on the part of the Corporate Debtor. The existence of debt and

default as adjudicated by the Adjudicating Authority has also not

been assailed by the Respondent. The Adjudicating Authority has

also held that the Section 7 petition filed by the Appellant was not

barred by limitation which has also not been challenged by the

Respondent. The only ground on which Adjudicating Authority has

dismissed the Section 7 petition is improper filing of the Section 7

application on account of there being no valid and proper

authorisation for the POA holder to have filed the same which for

reasons discussed above cannot be sustained.

Page 27 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025

27. In result, we are of the view that ground for rejection of the

application under Section 7 of IBC was erroneous. Appeal is allowed.

We set aside the impugned order dated 21.11.2024 and direct the

Adjudicating Authority to pass an order of admission of Section 7

application under IBC within a period of one month from the date

when the copy of this order is produced and to take further steps in

accordance with the law. No order as to costs.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

Place: New Delhi Date: 05.02.2026

Harleen/Abdul

Page 28 of 28 Company Appeal (AT) (Insolvency) No. 46 of 2025