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        Insolvency and Bankruptcy

        2023 (2) TMI 1266 - AT - Insolvency and Bankruptcy

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        Section 60(2) of the Insolvency Code refers to the same NCLT Bench, not the same courtroom, for guarantor filings. Section 60(2) of the Insolvency and Bankruptcy Code is explained as requiring a personal guarantor application to be filed before the same National ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                            Section 60(2) of the Insolvency Code refers to the same NCLT Bench, not the same courtroom, for guarantor filings.

                            Section 60(2) of the Insolvency and Bankruptcy Code is explained as requiring a personal guarantor application to be filed before the same National Company Law Tribunal Bench where the related CIRP or liquidation is pending, not before the same courtroom or member-combination. The Bench is treated as the relevant adjudicatory unit, while allocation between its courtrooms is governed by roster arrangements and administrative orders. A connected insolvency matter may therefore be heard by another court of the same Bench without affecting jurisdiction, and internal listing does not displace the validity of the assigned forum.




                            Issues: (i) Whether an application under Section 95 of the Insolvency and Bankruptcy Code, 2016 can be heard by another court of the same National Company Law Tribunal Bench when the corporate insolvency proceeding is pending before a different court of that Bench. (ii) Whether Section 60(2) of the Insolvency and Bankruptcy Code, 2016 requires the personal guarantor application to be filed before the same courtroom of the National Company Law Tribunal or only before the same Bench.

                            Issue (i): Whether an application under Section 95 of the Insolvency and Bankruptcy Code, 2016 can be heard by another court of the same National Company Law Tribunal Bench when the corporate insolvency proceeding is pending before a different court of that Bench.

                            Analysis: The statutory scheme treats the National Company Law Tribunal Bench as the relevant adjudicatory unit. The allocation of matters between different courtrooms of the same Bench is governed by the President's general or special orders and by roster arrangements. The Code does not create a right in a litigant to insist that both matters be heard in the same courtroom merely because they arise from the same corporate debtor and personal guarantor relationship. The jurisdiction of the court to which the matter is assigned is not displaced merely because a connected insolvency proceeding is listed before another court of the same Bench.

                            Conclusion: The order passed by another court of the same Bench is not without jurisdiction and is valid.

                            Issue (ii): Whether Section 60(2) of the Insolvency and Bankruptcy Code, 2016 requires the personal guarantor application to be filed before the same courtroom of the National Company Law Tribunal or only before the same Bench.

                            Analysis: Section 60(1) identifies the National Company Law Tribunal as the adjudicating authority, and Section 60(2) directs that the personal guarantor application be filed before such National Company Law Tribunal when a CIRP or liquidation proceeding is already pending. Read with the definitions of "bench" under the Code and the National Company Law Tribunal Rules, the provision refers to the same Tribunal Bench and not to a particular courtroom or a particular member-combination within that Bench. The provision is intended to avoid different Benches dealing with connected proceedings, not to regulate internal roster distribution within one Bench.

                            Conclusion: Section 60(2) requires filing before the same National Company Law Tribunal Bench and not before the same courtroom.

                            Final Conclusion: The appeals were rejected because the impugned orders were within jurisdiction, and the connected personal guarantor proceedings could be listed and decided by another court of the same Bench under the Tribunal's internal roster .

                            Ratio Decidendi: For purposes of Section 60(2) of the Insolvency and Bankruptcy Code, 2016, the relevant forum is the same National Company Law Tribunal Bench, while allocation among courts or members within that Bench remains subject to the Tribunal's administrative roster and does not affect jurisdiction.


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