2019 (6) TMI 833 - AT - Insolvency and Bankruptcy

Appeal found not maintainable due to delay issue condonation, Impleadment Application rejection upheld, and Insolvency and Bankruptcy Code provisions clarified.

DAMONT DEVELOPERS P. LTD. Versus BANK OF BARODA AND ANOTHER

The appeal was found to be not maintainable as the delay issue was condoned, the rejection of the Impleadment Application was upheld, and the ... Admissibility of petition - initiation of CIRP - Impleadment Application filed by the Appellant was initially rejected and by subsequent order dated 18th March, 2019 the application u/s 7 was admitted - applicant claimed as purchaser of CD property - HELD THAT:- From the decision of Supreme Court in “Innoventive Industries Ltd. Vs. ICICI Bank and Ors. [2017 (9) TMI 58 - SUPREME COURT] it is clear that the Adjudicating Authority is required to go through the record to find if there is a debt and default and while doing so it was open for the Corporate Debtor to show that there is no debt payable and no default, at the stage of admission of the petition. Except the Corporate Debtor, no other party has right to intervene at the stage of admission of a petition u/s 7 or 9. However, an aggrieved party may prefer an appeal if the order of admission affects the person. In the present case, we find that the order of admission dated 18th March, 2019 in no manner has cast any impact on the case of the Appellant. It is merely an order of admission of the application under Section 7 against the Corporate Debtor. In view of the provisions of the I&B Code, in case, the Interim Resolution Professional or Resolution Professional wants to take possession of the Hotel namely ‘Hotel Brys Fort, Jaisalmer’, the Appellant may bring facts regarding its claim to the notice of the Interim Resolution Professional/ Resolution Professional. The Interim Resolution Professional/ Resolution Professional will consider it in the light of explanation to Section 18(f) of the I&B Code. Even if, after that the Appellant has some grievance he can move before the Adjudicating Authority under Sub-Section 5 of Section 60 and thereafter, if his grievance is not resolved, he may prefer an appeal under Section 61 before this Appellate Tribunal. The appeal is not maintainable and is dismissed. Issues:1. Delay in preferring the appeal.2. Impleadment application rejection by the Adjudicating Authority.3. Challenge to the orders dated 4th February, 2019, and 18th March, 2019.4. Interpretation of provisions of the Insolvency and Bankruptcy Code.5. Maintainability of the appeal.Analysis:1. Delay in Preferring the Appeal:The judgment begins by addressing the delay of 7 days in preferring the appeal, which was condoned after hearing the counsel for the Appellant and 'Bank of Baroda.' The delay issue was disposed of through this order.2. Impleadment Application Rejection:The Appellant claimed to have purchased 'Hotel Brys Fort, Jaisalmer' and sought to be impleaded before the Adjudicating Authority when a petition under Section 7 of the Insolvency and Bankruptcy Code was filed by 'Bank of Baroda.' The Adjudicating Authority rejected the Impleadment Application, which was challenged in this appeal along with the subsequent order admitting the application under Section 7.3. Challenge to Orders:The appeal challenged the orders dated 4th February, 2019, and 18th March, 2019. The Appellant contested the rejection of the Impleadment Application and the subsequent admission of the application under Section 7 by the Adjudicating Authority.4. Interpretation of I&B Code Provisions:The judgment extensively quoted the Hon'ble Supreme Court's decision in 'Innoventive Industries Ltd. Vs. ICICI Bank and Ors.' to explain the scheme of the Insolvency and Bankruptcy Code. It highlighted the definitions of debt, default, financial creditor, operational creditor, and the process for triggering the corporate insolvency resolution process under Section 7.5. Maintainability of the Appeal:The Tribunal found that the order of admission dated 18th March, 2019 did not impact the Appellant's case. It clarified the steps the Appellant could take if the Interim Resolution Professional or Resolution Professional intended to take possession of the hotel. The judgment concluded that the appeal was not maintainable, with no infirmity found in the orders dated 4th February, 2019, and 18th March, 2019.In summary, the judgment addressed the delay in appeal, rejection of the Impleadment Application, interpretation of I&B Code provisions, and the maintainability of the appeal. It provided detailed analysis and guidance on the legal processes involved, citing relevant legal precedents and outlining the steps for the parties involved to follow in the given situation.