Petitioner's Collusion Allegations Dismissed by Tribunal

The High Court granted the petitioner liberty to approach NCLT for suspected collusion in the fraudulent initiation of CIRP. The Tribunal rejected the recall of the order dated 10.05.2018, citing lack of authority under the IB Code. The applicant's request for costs on the operational creditor was dismissed due to insufficient evidence. The Tribunal found no merit in the application, rejecting the recall of the order and liquidation of the Corporate Debtor.

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Issues:
1. Application filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 regarding fraudulent initiation of CIRP.
2. Exclusion of plant and machinery from insolvency proceedings.
3. Recall and setting aside of the order dated 10.05.2018.
4. Imposition of cost to the operational creditor under section 65 of the IB Code.
5. Liquidation of the Corporate Debtor.

Analysis:
1. The application was filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, alleging fraudulent initiation of Corporate Insolvency Resolution Process (CIRP). The High Court granted the petitioner liberty to approach NCLT if collusion or fraudulent initiation was suspected. The applicant, an auction purchaser, sought exclusion of plant and machinery from proceedings and the recall of the order dated 10.05.2018. The bank, a secured creditor, informed the applicant about the CIRP against the Corporate Debtor initiated by an operational creditor, leading to a moratorium period.

2. The RP and COC countered the application, stating that the sale confirmation letter issued after the CIRP initiation became void. They argued that the bank was unaware of the insolvency proceedings during the auction. The applicant defended the auction, stating it was held under the SARFAESI Act, 2002, and unaffected by subsequent IB Code proceedings.

3. The Tribunal rejected the application for recalling the order dated 10.05.2018, citing lack of authority to review or recall orders under the IB Code. It was clarified that the auction was incomplete due to the applicant's failure to deposit the auction money timely, thus not acquiring any vested rights over the property. Exclusion of the asset from the Corporate Debtor was deemed unnecessary.

4. The applicant's request for imposing costs on the operational creditor under section 65 of the IB Code was dismissed due to insufficient evidence of fraudulent or malicious intent. The Tribunal admitted the petition under Section 9 of the IBC after assessing the petitioner's claims but found no substantial evidence to invoke section 65.

5. The COC member, Bank of Baroda, admitted to informing the applicant about the CIRP initiation and subsequently refunded the bid amount collected from the auction purchaser. The Tribunal found the application devoid of merit and rejected it, concluding that the recall and setting aside of the order and liquidation of the Corporate Debtor were unwarranted.

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