TMI Blog2022 (9) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... PPELLATE TRIBUNAL, NEW DELHI] , has held similar view. The impugned orders passed by the Adjudicating Authority cannot be sustained in the eye of law - Appeal allowed. - Company Appeal (AT) (Insolvency) No. 769-770 of 2021 - - - Dated:- 1-9-2022 - [Justice Anant Bijay Singh] Member (Judicial) And [Ms. Shreesha Merla] Member (Technical) For the Appellant : Ms. Madhavi Divan, ASG. Mr. Vikas Mehta and Mr. Adith Nair, Advocates For the Respondent : Mr. Arnav Kumar, Advocate for R-1, 3. Mr. Mrinal Harsh Vardhan, Advocate for R-2. Mr. Suprateek Neogi, Advocate for R-3. JUDGMENT Justice Anant Bijay Singh ; This Appellant Board have preferred this Appeal being aggrieved and dissatisfied by the orders dated 06.07.2021 and 29.07.2021 passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi Court-IV) in IB-2691/(ND)/2019 whereby and whereunder the Adjudicating Authority passed the following orders: We direct IBBI not to initiate any enquiry till further orders, if any enquiry is initiated, the same be halted till further direction from this Court. List IA No. 1346/ND/2021, IA No. 3253/ND/2021 on 05.08.2021 with another application f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direction to the IBBI to take appropriate steps. iv) The Appellant sent an email dated 14.07.2021 (Annexure A/4) to the Respondent No. 1, seeking an explanation from him regarding the observations made by the Adjudicating Authority. Vide its reply dated 15.07.2021 (Annexure A/5), the Respondent No. 1 stated that it could not take charge as IRP of the Corporate Debtor because he was not aware about his appointment as an IRP in the said matter. v) Further case is that while Appellant Board was reviewing the reply of Respondent No. 1, the Respondent No. 1 filed an Interim application bearing I.A. No. 3523/ND/2021 in (IB)-2691(ND) 2019 assailing the order dated 06.07.2021 of the Adjudicating Authority thereafter, the Adjudicating Authority vide order dated 29.07.2021 disposed of the application with the following observations: We direct IBBI not to initiate any enquiry till further orders, if any enquiry is initiated, the same be halted till further direction from the court. vi) Further case is that the Appellant Board was preferred the Appeal bearing Company Appeal (AT) (Ins.) No. 324 of 2019 against order dated 05.02.2019 passed by the Adjudicating Authority, New D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Orders passed by the Ld. Adjudicating Authority are against the principles of natural justice, equity and good conscience. 4. The Learned Counsel for the Appellant during the course of arguments and in his written submissions submitted that vide order dated 20.03.2020 the Ld. Adjudicating Authority appointed Respondent No. 1 as an IRP in an insolvency proceedings against Adjoin Built and Developers Pvt. Ltd. From the record, it appears that the Respondent No. 1 failed to take charge of the Corporate Debtor as an IRP and therefore, an Application was filed by the Operational Creditor seeking to change the name of the IRP since the IRP had not taken over the Corporate Debtor and the CIRP period of 330 days had expired. By way of first impugned order, the Ld. Adjudicating Authority referred the matter to the Appellant Board, directing the Board to make appropriate enquiry with respect to the conduct and actions of Respondent No. 1. 5. It is further submitted that after perusing the order of the Ld. Adjudicating Authority, the Appellant Board independently examined the issue and vide email dated 14.07.2021 directed the Respondent No. 1 to file a response along with relevant d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 196 of the Code, the Appellant Board has power, inter alia, to register the IPs and to regulate their working and practices in furtherance to the purposes of the Code. Importantly, Section 196(f) confers exclusive power on the Appellant Board to carry out inspections and investigations on the Insolvency Professionals and to pass such orders as may be required for compliance of the provisions of the Code and regulations made thereunder. Apart from this, Section 196(g) specifically empowers the Appellant Board to monitor the performance of the IPs and pass any directions as may be required for compliance of the provisions of the Code and regulations made thereunder. c. In terms of Section 218, the Appellant Board has plenary power to order for inspection or investigation. It is submitted that such powers are not subservient to any directions from the Adjudicating Authority. 8. It is further submitted that Section 240 of the Code empowers the Board to make necessary regulations and rules to carry out the provisions under the Code. In furtherance to the said powers conferred under the Code, the Appellant Board has made various regulations, including, 'IBBI (Insolvency an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ems Jewels Pvt. Ltd. Vs. Vijay Verma Ors. [C.A. (AT) (Ins.) No. 849 of 2020] , very succinctly described the role of Adjudicating Authority, it is observed as under: 26. It is well settled proposition that the legality and propriety of any Regulations/Notifications/Rules/Act cannot be looked into by NCLT or NCLAT. The Tribunal can only ascertain whether the procedures provided for under the Code/Companies Act, 2013 are being followed or not. The Adjudicating Authority cannot beyond this 11. It is further submitted that a perusal of the aforementioned judgments passed by Hon'ble Supreme Court and this Appellate Tribunal as well as provisions of the Code would evince that the Ld. Adjudicating Authority has not been vested with the power to give any directions to the Board and therefore, being a creature of a statute, the Adjudicating Authority cannot travel beyond the powers granted to it under the Statute. It is pertinent to note that during the pendency of the present Appeal, the Ld. Adjudicating Authority, vide Order dated 07.03.2022 (at page 8 of the Reply filed by the Respondent No. 2) has allowed the Respondent No. 1 to continue as the IRP in said matter. Insp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he IRP if the Order dated 29.07.2021 directing IBBI to halt enquiry is set aside, but not the order dated 06.07.2021 whereby the Adjudicating Authority directed the IBBI to initiate enquiry against the Respondent No. 1 (especially in view of the final order dated 07.03.2022 passed by NCLT). Even if this Appellate Tribunal holds that the Adjudicating Authority has the power to direct IBBI to initiate enquiry against IRP, but not to halt the enquiry proceeding against the IRP, the IRP requested this Appellate Tribunal to set aside the Order dated 29.07.2021 only to that extent. 14. The Ld. Counsel for the Respondent No. 2 in his Reply Affidavit submitted that in view of the order dated 07.02.2022 passed by the Ld. Adjudicating Authority, the Respondent No. 2 has conceded to the appointment of Aditya Kumar to be the IRP for the Corporate Insolvency Resolution Process of the Corporate Debtor. The Respondent No. 2 declares that so far as the appointment of Aditya Kumar as an IRP by the Ld. Adjudicating Authority is concerned the Respondent No. 2 is left with no grievance and accepts him as the IRP. 15. After hearing the parties and having gone through the record, we place rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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