2023 (1) TMI 906 - AT - Insolvency and Bankruptcy

Tribunal denies revival of case under Insolvency and Bankruptcy Code, warns against prolonging litigation and judicial impropriety.

Tulip Star Hotels Ltd. & Anr. Versus Asset Reconstruction Company (India) Ltd. & Anr.

The Tribunal dismissed the application for revival and relisting of a case under the Insolvency and Bankruptcy Code, emphasizing that filing a fresh ... Maintainability of second application on the same cause of action - exactly similar application had earlier been filed as I.A. No. 3431-3433 of 2022 which was argued for sometime and withdrawn with liberty to avail any other remedy but for the remedy before this Tribunal - Prayer for revival and relisting of CA (AT) (Ins) No. 627 of 2019 and to adjudicate the same upon the questions of facts and law as raised therein, except upon the question of limitation - seeking to direct Respondent No. 2 not to proceed with the CIRP till disposal of present application - how a second application on the same cause of action is maintainable? HELD THAT:- Such a procedure cannot be followed as it is against the judicial propriety and public policy in as much as it will breed an unending litigation before the Courts of Law. Even otherwise, liberty was not granted by the Hon’ble Supreme Court to the Applicants to file the application rather the Applicants themselves proposed to file a fresh application before this Tribunal and withdrew the application filed before the Hon’ble Supreme Court. There are no reason to entertain the present application and hence the same is hereby dismissed. Issues:1. Maintainability of the application for revival and relisting of a previous case.2. Judicial propriety and public policy considerations regarding filing a fresh application on the same cause of action.Issue 1: Maintainability of the application for revival and relisting:The judgment addressed the application filed for revival and relisting of a case under the Insolvency and Bankruptcy Code, 2016. The Respondent, an Asset Reconstruction Company, had initiated insolvency proceedings against a Corporate Debtor. The Corporate Debtor challenged the maintainability of the application, leading to subsequent appeals and orders. The Tribunal allowed the appeals filed by the Corporate Debtor, setting aside the earlier order. However, the Appellants/Applicants later withdrew their applications seeking revival and relisting before the Tribunal, opting to explore other remedies. Subsequently, the Appellants/Applicants filed fresh applications before the Supreme Court, which were dismissed. The Appellants/Applicants then refiled the application before the Tribunal, leading to a contention on the maintainability of the fresh application. The Respondents argued against the maintainability of the new application, highlighting the earlier withdrawal of similar applications without permission. The Tribunal, after considering the arguments, concluded that allowing a fresh application on the same cause of action without any change in circumstances would lead to prolonged litigation and was against judicial propriety and public policy. The Tribunal dismissed the application, emphasizing that the liberty to file a new application was not granted by the Supreme Court, but was a decision made by the Appellants/Applicants themselves.Issue 2: Judicial propriety and public policy considerations:The judgment delved into the importance of judicial propriety and public policy considerations in the context of filing repeated applications on the same cause of action. The Tribunal expressed concerns that permitting such practices would result in endless litigation before the Courts of Law, undermining the efficiency and finality of legal proceedings. The Tribunal emphasized that the liberty to file a fresh application was not explicitly granted by the Supreme Court but was a choice made by the Appellants/Applicants themselves. By dismissing the application, the Tribunal sought to uphold the integrity of the legal process and prevent the abuse of filing repetitive applications without substantial changes or new circumstances. The decision aimed to maintain the sanctity of legal proceedings and discourage litigants from engaging in tactics that could lead to unnecessary delays and burdens on the judicial system.