2022 (1) TMI 869 - AT - Insolvency and Bankruptcy

Intervention Application Disposed in CIRP Appeal; Tribunal Orders Vacation of Stay

The intervention application filed by 'Edelweiss Asset Reconstruction Company Ltd.' seeking to intervene in an appeal against a judgment admitting an ... Seeking to intervene and object to the Appeal filed by the Appellant - Rule 11 of the NCLAT Rules, 2016 read with Rule 31 of the NCLAT Rules, 2016 - HELD THAT:- It appears that due to order dated 28.10.2021 entire CIRP has come to standstill and there is no progress in settlement outside the court in the matter and only oral assurance of different dates was given by the Learned Counsel for the Appellant and Respondent. This Bench of this Tribunal invoking inherent power and hereby ordered to vacate the interim order dated 28.10.2021 passed by this Bench in Company Appeal (AT) (Insolvency) No. 884 of 2021 whereby the constitution of COC was stayed - Application disposed off. Issues:1. Intervention application filed seeking to intervene in an appeal against a judgment admitting an application for Corporate Insolvency Resolution Process.2. Request to recall and vacate the stay granted in the larger interest of the creditors of the Corporate Debtor.3. Allegations of continuous default and evasion of payment by the Corporate Debtor.4. Dispute over settlement agreements and resolution plans leading to the initiation of CIRP.5. Application filed against the Corporate Debtor before the Adjudicating Authority.6. Arguments regarding the involvement of the Applicant in the litigation and violation of principles of natural justice.7. Orders passed by the Appellate Tribunal regarding the constitution of the Committee of Creditors (CoC) and settlement talks outside the court.8. Disposal of the intervention application with directions to vacate the interim order and proceed with the CIRP.Analysis:1. An intervention application was filed by 'Edelweiss Asset Reconstruction Company Ltd.' seeking to intervene in an appeal against a judgment admitting an application for Corporate Insolvency Resolution Process. The Applicant claimed to be a Financial Creditor of the Corporate Debtor and requested directions to object to the appeal seeking to set aside the judgment dated 21st October, 2021.2. The Applicant requested the Appellate Tribunal to recall and vacate the stay granted in the appeal for the larger interest of the creditors of the Corporate Debtor. The Applicant highlighted the heavy debt burden on the Corporate Debtor and its continuous default in payment despite consortium approval of resolution plans.3. Allegations were made against the Corporate Debtor for breaching settlement agreements and resolution plans approved by lenders, leading to the initiation of the Corporate Insolvency Resolution Process. The Corporate Debtor was accused of attempting to delay the CIRP process through false promises of settlement.4. Various applications were filed against the Corporate Debtor before the Adjudicating Authority, indicating a history of financial disputes and defaults. The Applicant raised concerns about the Corporate Debtor's actions to evade liabilities and delay the resolution process.5. Arguments were presented regarding the involvement of the Applicant in the litigation and the alleged violation of principles of natural justice during the admission of the CIRP application. The Appellate Tribunal considered the involvement of parties in the proceedings and the fairness of the legal process.6. The Appellate Tribunal issued orders regarding the constitution of the Committee of Creditors (CoC) and ongoing settlement talks outside the court. Various parties were directed to file necessary documents and comply with procedural requirements to move forward with the CIRP proceedings.7. The intervention application was disposed of with directions to vacate the interim order and proceed with the Corporate Insolvency Resolution Process. The Appellate Tribunal invoked inherent power to order the vacation of the stay and instructed the Insolvency Resolution Professional to maintain the timeline for completing the CIRP proceedings.8. The Registry was instructed to upload the order on the Tribunal's website and send a copy to the Adjudicating Authority. The instant appeal was listed for admission after notice on a specified date to continue the legal process effectively.