Locus standi of secured creditor denied where resolution was complete and no enforceable right was shown

A secured financial creditor who was not a party before the Adjudicating Authority was held not to have locus standi to seek leave to appeal against an order setting aside an avoidance transaction and related security interest. The Tribunal noted that the corporate debtor had already undergone resolution under an approved plan on a clean slate, and that the impugned order did not extinguish any enforceable right of the appellant as claimed. It also observed that the original transferee entity had already appealed, so the appellant could not advance a separate case in these proceedings. Leave to appeal was refused, the impleadment request was not entertained, and the company appeal was rejected.

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Issues: Whether a secured financial creditor, not arrayed as a party in the proceedings before the Adjudicating Authority, had locus standi and could be treated as a person aggrieved so as to seek leave to prefer an appeal against the order setting aside the impugned transaction and related security interest.

Analysis: The Tribunal noted that the corporate debtor had already undergone resolution and that the approved resolution plan had brought in a resolution applicant on a clean slate. In that setting, the appellant's challenge to the corporate insolvency resolution process and the order passed in the avoidance proceedings could not be maintained. The Tribunal further held that the impugned order did not take away any enforceable right of the appellant in the manner contended, and that the application seeking leave to appeal was filed with inordinate delay. The Tribunal also observed that, since the original transferee entity had itself preferred an appeal, the appellant could not set up a case different from that entity in the present proceedings.

Conclusion: The appellant was held to have no locus standi to maintain the appeal, and leave to appeal was refused.

Final Conclusion: The leave application failed, the connected impleadment request was not entertained, and the main company appeal was not entertained and stood rejected.

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