Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2017 (7) TMI Tri This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (7) TMI 1364 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCHMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditor - whether a Director who had invested money in his own Company can move a Petition seeking insolvency as "Financial Creditor"? - whether Father as an investor has an alternate remedy under any other provisions of Law? - HELD THAT:- The Act itself is not allowing the related party to participate in the meeting of Committee of Creditors. This Proviso to sub-section (2) of Section 21 has drawn a line of distinction between Creditor and the related party as a Creditor. Naturally, it is very obvious that if the related parties are allowed to vote in a meeting of the Committee of Creditors then the democratic pattern of majority view shall make a mockery of the provision of This Code because the related parties shall not allow to proceed with the insolvency resolution. This distinction has, therefore, buttressed that a Director, although advanced money, is not a "Creditor" in the strict sense as conveyed in this Code. This case is a befitting examples that if presumably the Petition is allowed, then the consequential insolvency commencement shall not take place because the Committee of Creditors having only two Creditors i.e. Father and Son, shall not approve the commencement of the Insolvency Resolution. The exception as carved out in the First Proviso is therefore logical hence to be adhered strictly. In the given situation we are not inclined to expand the scope of this Proviso by holding that a Director can be treated as a "Financial Creditor" so as to be allowed to participate in Committee of Creditors in that capacity. Without going into other allegation of the Respondent Company challenging the signatures of the Petitioner, authority given by the Petitioner to his younger Son, hospitalization of the Petitioner, etc., we are of the conscientious view that on technical ground itself the Petition is not allowed to be admitted - Petition dismissed.
|