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2022 (9) TMI 274 - Insolvency & Bankruptcy
Recovery of outstanding amounts from ‘Sundry Debtors’ under Section 60(5)(b) of the Insolvency and Bankruptcy Code, 2016 - Liquidator is duty bound to prefer Application for recovery of money due to the ‘Corporate Debtor’ under Regulation 39 of the IBBI (Regulation Process), Regulations, 2016 or not - HELD THAT:- The Resolution Professional is required under Section 18 of the Code to take control and custody of the assets of the ‘Corporate Debtor’. The amounts stated to be ‘due and payable’ to the ‘Corporate Debtor’ by other Sundry Debtors are required to be included in the Information Memorandum and when included, the person/entity purchasing the assets of the ‘Corporate Debtor’ would have knowledge of the value of the assets/Liquidation Value as stated in the Information Memorandum.
The remedy for recovery of debts, disputed or not, cannot be determined in summary proceedings and the Code does not contemplate adjudication of any such nature. Any such steps taken under Section 60(5) of the Code before the Adjudicating Authority, would tantamount to bypassing/short-circuiting the Judicial Proceedings - The Appellant is well within its powers to take appropriate steps to file legal proceedings, if the circumstances so warrant. The Code expressly provides for the Liquidator to institute or defend any Suit, Prosecution or other Legal Proceedings, Civil or Criminal, in the name or on behalf of the ‘Corporate Debtor’.
There is no illegality or infirmity in the direction given by the Adjudicating Authority - Appeal dismissed.