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Supreme Court upholds NCLAT's stay on Committee of Creditors formation in newspaper publication case The Supreme Court declined to interfere with the NCLAT's interim order staying the constitution of the Committee of Creditors in a case involving a ...
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Supreme Court upholds NCLAT's stay on Committee of Creditors formation in newspaper publication case
The Supreme Court declined to interfere with the NCLAT's interim order staying the constitution of the Committee of Creditors in a case involving a leading newspaper publication as the Corporate Debtor. The Court directed the NCLAT to conclusively decide the appeal on the scheduled hearing date. The appeal was disposed of, emphasizing the importance of the NCLAT resolving the matter definitively.
Issues: - Appeal against NCLAT order staying constitution of Committee of Creditors (CoC) - Request to stay proceedings before CoC due to Corporate Debtor's reputation as a renowned newspaper
Analysis: The judgment involves an appeal filed by a suspended Director (Appellant) of a Corporate Debtor, a leading Newspaper publication, against an order of the NCLAT staying the constitution of the Committee of Creditors (CoC). The appeal was made under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) by another Director (Respondent No.1) based on alleged default of 'financial debt,' which was acknowledged by the NCLT. The NCLAT initially kept the CoC constitution on hold after being informed by the Interim Resolution Professional that the CoC had not been formed. However, the interim order was later vacated upon discovering that the CoC was already constituted.
During the proceedings, the Appellant's counsel argued for a stay on the CoC proceedings, citing the Corporate Debtor's long-standing reputation in the newspaper industry. The Supreme Court, comprising Justices L. Nageswara Rao, B.R. Gavai, and B.V. Nagarathna, declined to interfere with the interlocutory order of 03.08.2021. Instead, the Court directed the NCLAT to conclusively decide the appeal, Company Appeal (AT) (Insolvency) No.128 of 2021, on 05.10.2021, the scheduled hearing date.
In conclusion, the Supreme Court disposed of the appeal accordingly, with any pending applications also being disposed of. The judgment highlights the Court's decision not to intervene in the interim order while emphasizing the need for the NCLAT to resolve the appeal definitively on the upcoming hearing date.
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