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of <h1>Authority dismisses jurisdictional challenge by Appellant in insolvency case, emphasizes third-party limitations.</h1> The Adjudicating Authority dismissed the Interlocutory Applications filed by the Appellant, citing lack of jurisdiction as the properties in question ... Various illegal acts committed by Corporate Debtor in collective connivance to strip the SPV Company - HELD THAT:- It is clear that at present, the Corporate Debtor is in Liquidation and the Liquidation Proceedings which are time bound proceedings are pending. In Liquidation Proceedings of the Corporate Debtor investigations with regard to the transactions relating to some other entity referred as SPV cannot be said to be relevant. The Adjudicating Authority has already observed that the Applicant/Appellant can initiate appropriate criminal/civil proceedings, if any, before the Appropriate Authority and Forum. If the Appellant has any grievances against the acts committed by the Corporate Debtor with regard to the SPV Company, the appropriate legal recourse would always be open. In Liquidation proceedings of the Corporate Debtor it is not necessary to decide the issue as filed by the Appellant. Proceedings under Insolvency and Bankruptcy Code are basically summary in nature and it is not possible to decide what the Learned Sr. Counsel is claiming to be fraud. The proceedings of IBC cannot be so conducted, so as to make IBC unworkable. The Appeal is dismissed at the stage of Admission. Issues:1. Jurisdiction of the Adjudicating Authority over the applications filed by the Appellant.2. Locus standi of the Applicants to challenge fraudulent transactions under the Insolvency and Bankruptcy Code.3. Dismissal of Interlocutory Applications by the Adjudicating Authority.4. Relevance of investigations into transactions related to a separate entity during the liquidation proceedings of the Corporate Debtor.Jurisdiction of the Adjudicating Authority:The Appellant alleged fraud in the conduct of a Special Purpose Vehicle (SPV) company associated with the Corporate Debtor and filed three Interlocutory Applications (I.As) before the Adjudicating Authority. The Adjudicating Authority, after hearing both parties, noted that the properties in question did not belong to the Corporate Debtor but to its subsidiary, the SPV company. It also highlighted that the Applicants were not directly involved in the transactions under investigation and did not have the right to challenge such transactions under the Insolvency and Bankruptcy Code (IBC). Consequently, the Adjudicating Authority held that the matter did not fall under its purview, leading to the dismissal of the Applications.Locus Standi of Applicants:The Adjudicating Authority emphasized that the Applicants lacked the necessary locus standi to challenge the transactions related to a loan allegedly made in favor of the Corporate Debtor by a third party. It clarified that the IBC does not allow third parties to file applications challenging fraudulent transactions. The Applicants had already approached various forums with similar prayers for investigation, indicating that their requests were not within the scope of the Adjudicating Authority's jurisdiction. The Authority concluded that the Applications were not maintainable and dismissed them.Dismissal of Interlocutory Applications:The Adjudicating Authority, in its observations, highlighted that the Applicants could pursue appropriate civil or criminal proceedings before the relevant authorities if they wished to challenge the alleged fraudulent acts by the Corporate Debtor. The Authority disposed of the Applications without passing any comments on the merits of the allegations. It made it clear that the Applicants had the option to seek appropriate reliefs through other legal avenues as envisaged under the law.Relevance of Investigations during Liquidation Proceedings:The Adjudicating Authority underscored that the ongoing liquidation proceedings of the Corporate Debtor were time-bound and focused on specific matters. It stated that investigations into transactions involving a separate entity, referred to as the SPV, were not pertinent to the liquidation proceedings. The Authority emphasized that the Appellant could initiate suitable legal actions against the Corporate Debtor if they had grievances, but such matters were not relevant to the current insolvency proceedings. Consequently, the Authority dismissed the Appeal at the admission stage, emphasizing the summary nature of proceedings under the IBC and the need to maintain the functionality of the insolvency framework.
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