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2019 (9) TMI 893 - AT - Insolvency and BankruptcyInitiation of Corporate Insolvency Resolution process - Restoration of non-existent Company (‘Corporate Debtor’) - Power of Tribunal - The Company was struck-off from the Register of the Companies u/s 248 of the Companies Act, 2013 - default in repayment of amount alongwith interest and other charges - Section 7 of the Insolvency and Bankruptcy Code, 2016. Whether an application under Section 7 or 9 for initiating ‘Corporate Insolvency Resolution Process’ is maintainable against a Company/ ‘Corporate Debtor’, if the name of the Company/ ‘Corporate Debtor’ is struck-off from the Register of the Companies? HELD THAT:- As per sub-section (6) of Section 248, before passing an order under sub-section (5) (removing the name from the Register of Companies), the Registrar is to satisfy himself that sufficient provision has been made for realization of all amount due to the company and for the payment or discharge of its liabilities and obligations within a reasonable time and, if necessary, obtain necessary undertakings from the Managing Director, Director or other persons in charge of the management of the Company - As per proviso thereof, notwithstanding the undertakings referred to in sub-section (6), the assets of the Company are to be made available for payment or discharge of its liabilities and obligations even after the date of the order removing the name of the Company from the Register of Companies. From sub-section (7) of Section 248, it is also clear that the liability, if any, of every director, manager or other officer who was exercising any power of management, and of every member of the company dissolved under sub-section (5) of Section 248, shall continue and may be enforced as if the company had not been dissolved - From sub-section (8) of Section 248, it is clear that Section 248 in no manner will affect the power of the Tribunal to wind up a company, the name of which has been struck off from the Register of Companies. Therefore, it is clear that after removal of the name of the Company from the Register of the Company for the purpose of right of realization of all amount due to the Company and for the purpose of payment or discharge of its liabilities or obligations of Company continues. In terms of Part II of I&B Code, for the purpose of liquidation, except ‘Voluntary Liquidation of Corporate Persons’ under Section 59 of the I&B Code, procedure of ‘Corporate Insolvency Resolution Process’ is to be followed, if a proceeding is initiated under Sections 7 or 9 of the I&B code. Instead of liquidation, the first step to be taken is to ensure that in a time bound manner the value of assets of Corporate Debtor/ Company is maximized and to promote entrepreneurship, availability of credit by balancing the interest of all the stakeholders; within an active legal framework for timely resolution of insolvency and bankruptcy. Liquidation of assets of the ‘Corporate Debtor’/ Company is not the object, but object is revival and rehabilitation of the ‘Corporate Debtor’/ Company by way of ‘Resolution’ and maximization of the value of assets of the ‘Corporate Debtor’ and balancing the interest of all the stakeholders. The name of the ‘Corporate Debtor’ (Company) may be struck-off, but the assets may continue. Whether in the present case, there are assets of the ‘Corporate Debtor’ or not can be looked into only by the ‘Interim Resolution Professional’/ ‘Resolution Professional’ - The name of the Company having been struck-off, the Corporate Person cannot file an application under Section 59 for Voluntary Liquidation. In such a case and in view of the provisions of Section 250 (3) read with Section 248 (7) and (8), we hold that the application under Sections 7 and 9 will be maintainable against the ‘Corporate Debtor’, even if the name of a ‘Corporate Debtor’ has been struck-off.' Liability of the Ex-Directors or Shareholders or Officers - HELD THAT:- Section 248 (7) of the Companies Act being clear, we are not expressing specific opinion, till any order is passed by the Adjudicating Authority or demand is made by the ‘Interim Resolution Professional’. The Adjudicating Authority who is also the Tribunal is empowered to restore the name of the Company and all other persons in their respective position for the purpose of initiation of ‘Corporate Insolvency Resolution Process’ under Sections 7 and 9 of the I&B Code based on the application, if filed by the ‘Creditor’ (‘Financial Creditor’ or ‘Operational Creditor’) or workman within twenty years from the date the name of the Company is struck off under sub-section (5) of Section 248 - In the present case, application under Section 7 having admitted, the ‘Corporate Debtor’ and its Directors, Officers, etc. deemed to have been restored in terms of Section 252(3) of the Companies Act. Appeal dismissed.
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