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2021 (9) TMI 929 - AT - Insolvency and BankruptcyEx-parte order filed by the Corporate Debtor filed for initiation of CIRP - power of Adjudicating Authority to use power under Rule 49 of National Company Law Tribunal Rules, 2016 at belated stage - Section 424 (1) of the Companies Act, 2013 r/w Rule 11 of the National Company Law Tribunal, Rules, 2016 - HELD THAT:- Admittedly, the Ld. Adjudicating Authority has vide order dated 27.05.2020 admitted the application under Section 9 of the IBC filed by the Operational Creditor Respondent No. 1 and the Appellant has filed the Application for setting aside the ex-parte order on 06.11.2020 under Section 424 (1) of the Act r/w Rule 11 of NCLT Rules, 2016 stating that the Corporate Debtor has not received the notice. It is also an admitted fact that CoC has been constituted on 20.11.2020 i.e. after filing of the aforesaid Application for setting aside ex-parte order of admission. It is settled that once the Application under Section 7 or 9 is admitted and CIRP initiated, such proceeding is in rem. Being a proceeding in rem, it is necessary that the body which is to oversee the resolution process must be consulted before any individual corporate debtor is allowed to settle its claim. Before a CoC is constituted, a party can approach the Adjudicating Authority directly and the Adjudicating Authority may in exercise of its powers under Section 12A of the IBC r/w Regulation 30A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 allow or disallow an application for withdrawal or settlement - after constitution of CoC the Adjudicating Authority cannot set aside even ex-parte admission order and in such a situation the Corporate Debtor has to file the Appeal under Section 61 of the IBC. In the present case, the Application under Section 9 was admitted on 27.05.2020 and the Appellant (Corporate Debtor) has filed the Application for setting aside the ex-parte admission order on 06.11.2020 whereas the CoC has been constituted thereafter on 20.11.2020. In such a situation before constitution of CoC the Ld. Adjudicating Authority can consider the Application for setting aside ex-parte admission order but after constitution of the CoC the Ld. Adjudicating Authority cannot in exercise of power under Rule 49(2) of the NCLT Rules, 2016 set aside the ex-parte admission order. Ld. Adjudicating Authority has passed the impugned order after constitution of CoC i.e. on 23.03.2021, therefore, there are no illegality in the impugned order. Appeal dismissed.
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