Corporate Debtor's Appeal Dismissed Under Section 7

The appeal filed by the Corporate Debtor against the order admitting the application under Section 7 of the Insolvency and Bankruptcy Code was dismissed. The Tribunal found the appeal not maintainable based on the Supreme Court decision that once an insolvency professional is appointed, former Directors cannot appeal on behalf of the Company. The Tribunal also confirmed the disbursement of funds to the Corporate Debtor by Financial Creditors, rejecting the argument of non-receipt of funds. The appeal was ultimately dismissed with no costs awarded.

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Issues:
- Appeal against order admitting application under Section 7 of the Insolvency and Bankruptcy Code, 2016.
- Maintainability of appeal by Corporate Debtor.
- Disbursement of funds to Corporate Debtor by Financial Creditors.
- Applicability of the decision in "M/s. Innoventive Industries Ltd. Vs. ICICI Bank & Anr. 2017 SCC OnLine SC 1025".

Analysis:

1. Appeal against order admitting application under Section 7 of the Insolvency and Bankruptcy Code, 2016:
The appeal was filed by the Corporate Debtor against the order passed by the Adjudicating Authority admitting the application under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Financial Creditors had approached the Corporate Debtor with financial assistance, and funds were disbursed to the Corporate Debtor. The argument made by the appellant that no amount was given to the Corporate Debtor was dismissed by the Tribunal, citing the disbursement of funds as per the application.

2. Maintainability of appeal by Corporate Debtor:
The Tribunal observed that the appeal filed by the Corporate Debtor was not maintainable based on the decision of the Hon’ble Supreme Court in "M/s. Innoventive Industries Ltd. Vs. ICICI Bank & Anr. 2017 SCC OnLine SC 1025". The Supreme Court's decision highlighted that once an insolvency professional is appointed to manage the Company, the erstwhile Directors who are no longer in management cannot maintain an appeal on behalf of the Company. Therefore, the Tribunal found the appeal by the Corporate Debtor to be not maintainable.

3. Disbursement of funds to Corporate Debtor by Financial Creditors:
The Tribunal noted that funds were disbursed to the Corporate Debtor by the Financial Creditors, including a specific amount given by an individual. The Tribunal rejected the argument that no amount was given to the Corporate Debtor, emphasizing the disbursement of funds as per the records presented during the proceedings.

4. Applicability of the decision in "M/s. Innoventive Industries Ltd. Vs. ICICI Bank & Anr. 2017 SCC OnLine SC 1025":
The Tribunal cited the decision of the Hon’ble Supreme Court in "M/s. Innoventive Industries Ltd. Vs. ICICI Bank & Anr. 2017 SCC OnLine SC 1025" to support its finding that the appeal filed by the Corporate Debtor was not maintainable. The Supreme Court's decision emphasized the appointment of an insolvency professional to manage the Company, which rendered the appeal by the erstwhile Directors of the Company as not maintainable. As a result, the Tribunal dismissed the appeal by the Corporate Debtor, with no order as to costs in the circumstances of the case.

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