TMI Blog2019 (8) TMI 1731X X X X Extracts X X X X X X X X Extracts X X X X ..... the NCLT Rules, 2016. Normally, before the constitution of Committee of Creditors if on behalf of the Corporate Debtor a shareholder or Director settles the claim of the Applicant who files an application u/s 7 or 9 of the I B Code, the Adjudicating Authority in normal course can exercise its inherent power under Rule 11 of the NCLT Rules, 2016 - However, it is seen that when allowing an application under Rule 11 of the NCLT Rules, 2016 may result into triggering a large number of cases as a number of creditors, including the Financial Creditors (allottees) are also in the queue to trigger the process against the Corporate Debtor , it is open to the Adjudicating Authority to refuse to exercise its inherent power under Rule 11 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Adjudicating Authority and opposed the prayer for withdrawal on the ground that their claim is settled by the Corporate Debtor , the Infrastructure Company / builder. In view of the same, the Adjudicating Authority referred to the decision of Hon ble Supreme Court in Swiss Ribbons Pvt. Ltd. Vs. Union of India refused to invoke the inherent power under Rule 11 of the NCLT Rules, 2016 by impugned order dated 5th July, 2019. 3. The Hon ble Supreme Court in Swiss Ribbons Pvt. Ltd. Vs. Union of India held that the Directors or the shareholders of the Corporate Debtor may settle before the constitution of the Committee of Creditors and it was observed that in such case, it was open to the Adjudicating Authority to exercise its inher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcise its inherent power under Rule 11 of the NCLT Rules, 2016. However, it is seen that when allowing an application under Rule 11 of the NCLT Rules, 2016 may result into triggering a large number of cases as a number of creditors, including the Financial Creditors (allottees) are also in the queue to trigger the process against the Corporate Debtor , it is open to the Adjudicating Authority to refuse to exercise its inherent power under Rule 11 of the NCLT Rules, 2016 otherwise it may result into triggering number of cases. 5. For the reasons aforesaid, we are not inclined to interfere with the impugned order dated 5th July, 2019, however we allow the Appellant or shareholders on behalf of the Corporate Debtor to move an applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
