Adjudicating Authority Upholds CIRP Decisions; Rejects Request to Quash Proceedings

The Adjudicating Authority upheld the finality of decisions made during the Corporate Insolvency Resolution Process (CIRP), including the approval of a Resolution Plan, as the Corporate Debtor did not challenge the admission order. The Authority rejected the applicant's request to quash the CIRP proceedings, invalidate the Committee of Creditors' constitution, and return the advance sale consideration, emphasizing its lack of power to review or recall orders under the Insolvency and Bankruptcy Code or NCLT Rules. Previous similar claims were dismissed, and the Authority deemed the application beyond its jurisdiction, ultimately rejecting it.

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Issues:
1. Maintainability of application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016.
2. Time-barred claim of the Operational Creditor.
3. Legality of admission of the petition under Section 9 of the IB Code.
4. Request to quash CIRP proceedings and related decisions.
5. Return of advance sale consideration.
6. Power of review/recall of the Adjudicating Authority.

Analysis:
1. The application was filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, by the Sole Proprietor of an entity claiming to be a financial creditor of the Corporate Debtor. The applicant sought to recover an advance sale consideration paid for a purchase transaction. The Respondent had undergone Corporate Insolvency Resolution Process (CIRP), and a Resolution Plan had been approved by the Adjudicating Authority.

2. The Respondent argued that the application was time-barred as it was filed after around 10 months, making it a claim of the Operational Creditor beyond the permissible period. The Respondent contended that the admission of the petition was in violation of the provisions of the IB Code.

3. The applicant requested to quash the CIRP proceedings, invalidate the Committee of Creditors' constitution, and declare decisions taken during the process as illegal. The applicant also sought the return of the advance sale consideration paid for the transaction.

4. The Adjudicating Authority noted that the admission order had reached finality as the Corporate Debtor did not challenge it before the Appellate Authority. The Resolution Plan had been accepted and approved, further solidifying the finality of the decisions taken during the CIRP.

5. The applicant had previously filed an application seeking recognition as a financial creditor during the CIRP, which was dismissed. Similar claims were rejected by the Adjudicating Authority in other instances, and appeals against those decisions were also dismissed by higher courts, upholding the Adjudicating Authority's orders.

6. The Adjudicating Authority clarified that it did not have the power to review or recall its own orders under the IB Code or NCLT Rules. Citing legal precedents, the Authority emphasized that the power of review is not inherent and must be explicitly granted by law, which was not the case in this situation. Therefore, the application for recalling/quashing the order and related prayers were deemed beyond the jurisdiction of the Adjudicating Authority and were rejected.

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