2019 (9) TMI 1445

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M.M. Kumar, C.J. (President) and Santanu Kumar Mohapatra, Member (T) For the Appellant : Dhruv Gupta, Advocate For RP: Ajay Goel, RP For the Respondents : Siddharth Vaid and Sowmya Saikumar, Advocates ORDER Santanu Kumar Mohapatra, Member (T) 1. This is an application filed by the petitioner Financial Creditor, M/s. Endless Services Private Limited under Section 12A of Insolvency and Ban .....

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..... ion but before constitution of CoC under inherent power under rule 11 of NCLT Rules (in view of the decision in Swiss Ribbons Case). c) Withdrawal in terms of Section 12A of the Code. 3. In order to appreciate the matter in its proper perspective the relevant date wise development of the present case as per the affidavit of IRP is furnished below: a. 31.07.2019 -Application u/s 7 admitted. IR .....

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..... t has observed as follows" "79. It is clear that once the Code gets triggered by admission of a creditor's petition under Sections 7 to 9, the proceeding that is before the Adjudicating Authority, being a collective proceeding, is a proceeding 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 co .....

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..... triggered after admission of the application the proceedings becomes a collective proceeding and proceeding in rem. Therefore, inherent power is to be used by the Adjudicating Authority after hearing the parties and considering all relevant factors of each case. 7. In the present case the application has been wrongly filed under Section 12A of the Code as meetings of CoC has not yet commenced and .....

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..... ancial creditor. That apart once the application is allowed it may amount to preferential payment of 100% debt of the petitioner, whereas the other financial creditor may be exposed to substantial haircut. 10. In the facts in our considered opinion this is not a fit case to use inherent power at this stage of the proceeding and at the back of the other financial creditor holding 85.08% of the fin .....

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