2023 (7) TMI 1338 - AT - Insolvency and Bankruptcy

NCLAT remands case for fresh hearing due to natural justice violations and inadequate examination of evidence

Bank of India Versus Naresh Seth; Vinod Kumar Ambavat RP for ACTIF Corporation Ltd.

Bank of India Versus Naresh Seth; Vinod Kumar Ambavat RP for ACTIF Corporation Ltd. - TMI Issues involved:The issues involved in this judgment include the dismissal of applications under Section 7 of the Insolvency and Bankruptcy Code, 2016, the constitution of the Committee of Creditors (CoC), the appointment of Resolution Professionals, and the validity of CoC meetings.Dismissal of Applications under Section 7:- Seven companies filed applications under Section 7 of the Code against a Corporate Debtor, which were admitted by the Adjudicating Authority.- The Respondent Company admitted the total amount claimed in the petition, leading to the admission of the application.- The Adjudicating Authority dismissed the applications, prompting the filing of appeals by the Bank of India.Constitution of Committee of Creditors and Appointment of Resolution Professionals:- The Bank of India filed applications seeking to dissolve the CoC of the Corporate Debtor, remove the Resolution Professional, and appoint a new Resolution Professional.- The Bank of India requested additional time for the new Resolution Professional to verify creditors' claims and constitute a new CoC.- The Adjudicating Authority consolidated the applications and disposed of them through a common order.- The Bank of India challenged the impugned order, leading to the filing of two appeals before the National Company Law Appellate Tribunal.Validity of Committee of Creditors Meetings:- The Bank of India argued that the applications should have been allowed due to the involvement of unsecured creditors with related parties at a high interest rate.- The Tribunal found that the Adjudicating Authority did not consider all aspects of the matter, including evidence presented by the Appellant.- The Tribunal set aside the impugned orders and remanded the matters back to the Adjudicating Authority for a reevaluation, emphasizing the need for specific findings on raised issues.Conclusion:The appeals were allowed, and the impugned orders were set aside, with the matters remanded back to the Tribunal for a fresh decision considering all prayers made by the Appellant. The Adjudicating Authority was directed to decide the cases promptly, preferably within three months, while maintaining the interim order. The parties were instructed to appear before the Adjudicating Authority for further proceedings.