Shareholder lacks standing to challenge corporate debtor sale without filing claim form under Section 61(3) IB Code 2016

The NCLAT Chennai dismissed a leave application filed by a shareholder seeking to appeal against a corporate debtor's sale during liquidation proceedings. The petitioner was not part of the Stakeholders Consultation Committee, had not filed any claim form during liquidation, and lacked standing in the liquidation process under Section 61(3) of the IB Code, 2016. The liquidator had properly conducted stakeholder consultations and secured creditor meetings regarding the sale proposal, which the petitioner's terms were rejected. The tribunal found the petitioner had no vested interest in the corporate debtor and the sale consideration was distributed per Section 53 of the IB Code.

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Issues Involved:
1. Whether the Petitioner/Appellant, a shareholder of the Corporate Debtor, has the locus standi to file an appeal against the impugned order.
2. Whether the Petitioner/Appellant, not being a party to the original proceedings, can prefer an appeal.
3. Whether the Petitioner/Appellant's proposed scheme was considered by the Liquidator.

Summary:

Issue 1: Locus Standi of the Petitioner/Appellant
The Petitioner/Appellant, holding 55.19% equity shares of the Corporate Debtor, sought 'Leave' to appeal against the impugned order dated 19.01.2023. The Petitioner contended that his proposed scheme was not considered by the Liquidator, thereby prejudicing his interests. However, the Tribunal noted that the Petitioner had not filed any 'Claim Form' during the liquidation period and was not part of the 'Stakeholders Consultation Committee'. Consequently, the Petitioner had no connection to the liquidation process or the sale of the Corporate Debtor, and thus, lacked the locus standi to file the appeal.

Issue 2: Appeal by Non-Party to Original Proceedings
The Petitioner/Appellant argued that even a person not party to the original proceedings could prefer an appeal, citing Supreme Court judgments. However, the Tribunal observed that the Petitioner had not taken steps to be impleaded in the original proceedings and had not filed objections to the application for the sale of the Corporate Debtor. The Tribunal emphasized that the Petitioner was aware of the ongoing proceedings and could have filed an application before the Adjudicating Authority if aggrieved. Therefore, the Petitioner's appeal was not maintainable as he was not a party to the original proceedings.

Issue 3: Consideration of Petitioner's Proposed Scheme
The Liquidator and the 2nd Respondent contended that the Petitioner's proposed scheme was considered but found unacceptable by the Stakeholders Consultation Committee and the Secured Creditors. The Tribunal noted that the Petitioner had submitted a proposal for settlement under Section 230 of the Companies Act, 2013, but it was rejected by the stakeholders. The Tribunal also highlighted that the Petitioner had previously filed appeals before the Appellate Authority and the Supreme Court, which were dismissed.

Conclusion:
The Tribunal concluded that the Petitioner/Appellant, not being a stakeholder in the liquidation process and having no vested interest in the Corporate Debtor, could not be granted leave to appeal. Consequently, IA No. 125 of 2023 was dismissed, and the main appeal, Comp. App (AT) (CH) (INS.) No. 34 of 2023, was rejected. The connected pending IA Nos. 126 and 127 of 2023 were also closed.

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