Ex post facto leave in liquidation proceedings can regularise a liquidator's challenge to an arbitral award where prior approval was omitted.

Where liquidation proceedings require prior approval before the liquidator institutes litigation, the Adjudicating Authority may, in an appropriate case, grant ex post facto leave and regularise the proceeding through inherent jurisdiction. The Tribunal treated the approval requirement as procedural, held that subsequent permission was not barred, and relied on the need to advance the objectives of liquidation and maximise the corporate debtor's asset value. Ex post facto leave was therefore granted, and the liquidator was permitted to proceed with the section 34 applications.

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Issues: Whether leave could be granted ex post facto for prosecuting applications under section 34 of the Arbitration and Conciliation Act, 1996 without prior approval under section 33(5) of the Insolvency and Bankruptcy Code, 2016, and whether the Tribunal's inherent power under rule 11 of the National Company Law Tribunal Rules, 2016 could be invoked for that purpose.

Analysis: Section 33(5) requires prior approval of the Adjudicating Authority before the liquidator institutes any suit or other legal proceeding on behalf of the corporate debtor. The question was whether the omission to obtain such prior approval is incurable, or whether the Tribunal can subsequently regularise the proceeding by granting leave ex post facto. The reasoning proceeded on the basis that the object of liquidation is to preserve and maximise the value of the corporate debtor's assets, and that inherent powers may be exercised where necessary to meet the ends of justice and where the statute does not expressly forbid such regularisation. The Tribunal treated the leave requirement as procedural in nature and relied on the principle that a proceeding may be validated by subsequent permission.

Conclusion: Ex post facto leave was granted, and the liquidator was permitted to proceed with the section 34 applications.

Final Conclusion: The liquidator's omission to obtain prior approval did not prevent subsequent regularisation, and the proposed challenge to the arbitral award was allowed to continue with the Tribunal's permission.

Ratio Decidendi: Where liquidation proceedings require prior approval for instituting litigation, the Adjudicating Authority may, in an appropriate case, grant ex post facto leave and regularise the proceeding by invoking its inherent jurisdiction to advance the objectives of liquidation.

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