2017 (11) TMI 1887 - AT - Insolvency and Bankruptcy

Power to recall an order - validity of initiation of CIRP - HELD THAT - Admittedly the Appellant is an Investor therefore the Appellant cannot claim to be an aggrieved person for preferring appeal against the order dated 2nd May 2017 passed by Adjudicating Authority whereby the application under Section 9 of the I B Code was admitted. In fact the Appellant being an investor is entitled to file its claim before the Insolvency Resolution Professional - Further as the order dated 2nd May 2017 is not under challenge in this appeal this Appellate Tribunal cannot express any opinion with regard to the order of admission dated 2nd May 2017. If the said order dated 2nd May 2017 is allowed to be challenged the appeal will be barred by limitation under sub-section (2) of Section 61 of the I B Code . In absence of any power of review or recall vested with the Adjudicating Authority the Adjudicating Authority rightly refused to recall the order of admission dated 2nd May 2017 - Appeal dismissed.

Summary

Issues:
1. Challenge to the initiation of Corporate Insolvency Resolution Process.
2. Power of Adjudicating Authority to recall or dismiss a Company Petition.
3. Allegations of fraudulent initiation of the Corporate Insolvency Resolution Process.
4. Appellant's standing as an investor to challenge the order of admission under Section 9 of the I&B Code.
5. Limitation period for challenging the order of admission.
6. Review or recall powers of the Adjudicating Authority.

Analysis:
1. The Appellant challenged the initiation of the Corporate Insolvency Resolution Process against a company, alleging collusion between the Operational Creditor and the Directors. The Adjudicating Authority rejected the prayer to recall the order of admission under Section 9 of the I&B Code, leading to the appeal.

2. The Adjudicating Authority held that it lacked the power to recall or dismiss the Company Petition post-admission under the I&B Code. The Appellant contended that the Operational Creditor filed the Petition fraudulently, and relevant facts were not disclosed, making the initiation null and void.

3. The Appellant, being an investor, claimed to be an aggrieved person and sought to challenge the admission order. However, the Tribunal clarified that the Appellant's status as an investor did not confer the right to appeal the admission order. The Tribunal could not review the order dated 2nd May, 2017, as it was not challenged in the present appeal.

4. Due to the absence of review or recall powers with the Adjudicating Authority, the Tribunal upheld the decision to refuse the recall of the admission order. Consequently, no relief could be granted, and the appeal was dismissed. The Appellant was directed to file its claim before the Insolvency Resolution Professional despite the dismissal of the appeal.

This detailed analysis of the judgment highlights the key issues raised, the arguments presented, and the Tribunal's decision on each matter, providing a comprehensive overview of the legal proceedings.