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2024 (5) TMI 998 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHIDismissal of application filed for resolution - application dismissed on the ground that since the name of the Corporate Debtor has already been struck off by the RoC, therefore, the application under Section 9 cannot be further prosecuted - whether the application under Section 9 is filed for winding up or for initiation of CIRP? - HELD THAT:- Winding up is the process by which a company is dissolved and its assets are liquidated to pay off its creditors and any remaining assets are distributed to its shareholders. The winding up of a company can be initiated voluntarily by the company’s shareholders by passing a resolution and appointing liquidator to oversee the process and winding up can also be by an order of the Court wherein the Court appoints the liquidator and the process is governed by the Rules set up in the Act and other applicable laws. This process is initiated when the company is unable to pay its debts or when it is just and equitable to do so. The mechanism of winding up is applied for the recovery of debt. On the other hand, it has been repeatedly held by the Hon’ble Supreme Court that the Code is not a debt recovery mechanism but a mechanism for revival of a company fallen in debt. It has been held that the Code is a beneficial legislation intended to put the corporate debtor back on its feet and is not a mere money recovery legislation. The CIRP is not intended to be adversarial to the CD but is aimed at protecting the interests of the CD. The primary focus of the legislation is thus to ensure the revival and continuation of the CD by protecting the CD from its own management and from a corporate death by liquidation. The preamble of the Code speaks of maximisation of value of assets of the CD and balancing the interests of all the stakeholders with an object to keep the CD as a going concern. Section 252(3) travels into an altogether different direction rather than the way it has been observed in the case of Hemang (Supra) because Section 252(3) gives a right of appeal to a company, member, director or workmen to challenge the order of the Registrar passed under Section 248 (5) on the three grounds, namely, while its name was struck off it was carrying on business, or was in operation or otherwise it is just which has to be established by pleadings and evidence before the Tribunal and only then the order can be passed which shall again be a subject of an appeal in terms of Section 61 of the Code but in our humble opinion, there is nothing like automatic restoration on the filing of the application under Section 7 or 9 of the Code. There are no error in the order of the Adjudicating Authority which requires any interference by this Court - appeal dismissed.
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