Tribunal denies consolidation of Corporate Debtors due to lack of locus standi. Liquidation application directed.

The Tribunal rejected the application for substantive consolidation of Corporate Debtors, as the Applicant lacked the locus standi and failed to establish a prima facie case for relief. The Tribunal directed the Resolution Professional of Respondent No.1 to file an appropriate application for liquidation and the appointment of a liquidator.

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Issues Involved:
1. Substantive consolidation of Corporate Debtors.
2. Locus standi of the Applicant to maintain the application.
3. Prima facie case for relief sought by the Applicant.

Issue-wise Detailed Analysis:

1. Substantive Consolidation of Corporate Debtors:
The Applicant, an Operational Creditor, sought the substantive consolidation of the Corporate Debtors into a single proceeding for the purposes of the Corporate Insolvency Resolution Process (CIRP). The Applicant argued that the businesses of Respondent No.1 and Respondent No.2 are inextricably interlinked and intertwined, given that Respondent No.2 operates as the landholding company for Respondent No.1, and both companies are promoted, owned, and controlled by the same family. The Applicant also highlighted that Respondent No.2 stood as the guarantor for the financial debt of Respondent No.1, thus interlinking their assets and liabilities.

2. Locus Standi of the Applicant:
The Tribunal examined whether the Applicant, being an Operational Creditor who initiated CIRP against Respondent No.1, had the locus standi to maintain the application for consolidation. The Tribunal noted that the Applicant had previously filed an application seeking to club the cases of Respondent No.1 and Respondent No.2, which was dismissed. The Tribunal emphasized that the Applicant had suppressed material facts and had come to the Adjudicating Authority with unclean hands. The Tribunal concluded that the Applicant had no locus standi to interfere in the CIRP of Respondent No.1 by filing the instant application.

3. Prima Facie Case for Relief Sought:
The Tribunal considered whether the Applicant had made out a prima facie case for the relief sought. The Tribunal observed that the Committee of Creditors (CoC) of Respondent No.1 had unanimously decided to liquidate the company and appoint a liquidator. The Tribunal also noted that the Applicant had cited various judgments to support its case but failed to substantiate how the ratio of those cases applied to the instant case. The Tribunal found that the facts of the cited cases were not applicable to the present case. Consequently, the Tribunal determined that the application was filed on a misconception of facts and law and lacked merit.

Conclusion:
The Tribunal rejected the application for substantive consolidation of the Corporate Debtors, concluding that the Applicant had no locus standi to maintain the application and had not made out a prima facie case for the relief sought. The Tribunal directed that an appropriate application could be filed by the Resolution Professional of Respondent No.1 to seek liquidation and appointment of a liquidator.

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