2023 (2) TMI 240 - AT - Insolvency and Bankruptcy

Dismissal of Insolvency Petition Appeal for Lack of Standing and Genuine Grievance

The Company Petition under Section 7 of the Insolvency and Bankruptcy Code was dismissed by the Tribunal as the Corporate Debtor was deemed financially ... Maintainability of petition - aggrieved person being IBBI - lack of authorization in favour of the authorized signatory of the Respondent No. 2 - HELD THAT:- The present appeal has been filed by the Insolvency and Bankruptcy Board of India impleading GTL Infrastructure Limited as Respondent and Canara Bank as Performa Respondent. It is averred in the appeal that the Appellant is responsible for the enforcement of various rules and regulations concerning the corporate insolvency resolution and amongst others. Therefore, it becomes imperative for the Appellant to file the instant appeal as the impugned order is based on an incorrect interpretation of the provisions of Insolvency & Bankruptcy Code, inter alia Section 7. At the outset, Counsel for the Appellant has been asked as to how the Appellant Board is an aggrieved person especially when the aggrieved person (Canara Bank) has already filed the appeals i.e. CA (AT) (Ins) No. 68 & 69 of 2023. In merely requested that the present appeal may be renotified to be heard alongwith aforesaid two appeals on 17.03.2023. However, from the perusal of the memorandum of appeal, we could not find the cause of concern much less the grievance of the Appellant for preferring the present appeal especially when the appeals have already been filed by the aggrieved person. The Appellant has nothing to do with the litigation between two parties i.e. ‘Financial Creditor’ and ‘Corporate Debtor’, in order to challenge the impugned order by which the petition filed by the Financial Creditor has been dismissed for whatever reasons. The appeal is thus totally misconceived and not maintainable and hence, the same is hereby dismissed. Issues:1. Dismissal of Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016.2. Appeal filed by the Insolvency and Bankruptcy Board of India challenging the impugned order.Issue 1: Dismissal of Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016:The Respondent No. 2, Canara Bank, filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor for resolution of a substantial amount. The Corporate Debtor filed an application seeking dismissal of the petition due to lack of authorization of the signatory of Respondent No. 2. The Tribunal, after considering various factors including the financial health of the Corporate Debtor, held that the Corporate Debtor had monthly revenues, had repaid significant amounts, and had pending claims that could cover the debt. Citing the judgment in Vidarbha Industries Power Limited Vs. Axis Bank Limited, the Tribunal concluded that the Corporate Debtor was a viable going concern and dismissed the petition. The Tribunal refrained from expressing an opinion on the authorization issue due to the dismissal of the petition.Issue 2: Appeal filed by the Insolvency and Bankruptcy Board of India challenging the impugned order:The Insolvency and Bankruptcy Board of India filed an appeal against the impugned order, contending that it was based on an incorrect interpretation of the provisions of the Insolvency and Bankruptcy Code, particularly Section 7. The Tribunal questioned the standing of the Board as an aggrieved party when the actual aggrieved party, Canara Bank, had already filed appeals. The Tribunal noted that the Board's appeal seemed devoid of any genuine concern or grievance, referencing a previous case where a similar appeal by the Board was held not maintainable. The Tribunal concluded that the Board had no direct involvement in the dispute between the Financial Creditor and the Corporate Debtor and dismissed the appeal as misconceived and not maintainable.In summary, the judgment involved the dismissal of a Company Petition under the Insolvency and Bankruptcy Code due to the Corporate Debtor's financial viability and pending claims. Additionally, the appeal filed by the Insolvency and Bankruptcy Board of India was dismissed for lack of standing and genuine grievance.