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2017 (10) TMI 913

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....ocates JUDGMENT SUDHANSU JYOTI MUKHOPADHAYA, J. ICICI Bank Limited (Financial Creditor) filed an application under section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "I&B Code") for initiation of 'Corporate Insolvency Resolution Process' against 'Palogix Infrastructure Private Limited'- (Corporate Debtor). 2. The case was heard by a Division Bench of the Adjudicating Authority which having noticed that the 'Financial Creditor' preferred the application under section 7 through Power of Attorney Holder, passed two separate orders, one holding the application through Power of Attorney is not maintainable (Member Judicial) and the other (Member Technical) held that the application was maintainable as the Power of Attorney was given in favour of the Legal Manager to initiate proceedings before the National Company Law Tribunal which is the Adjudicating Authority under 'I&B Code'. 3. The case was referred to the Hon'ble President, National Company Law Tribunal exercising power under sub Section (5) of Section 419 of the Companies Act, 2013 for constituting a larger Bench for decision on the following questions: - ....

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....ity Rules") and submitted that the 'form and manner' in which an application under section 7 of the 'I&B Code' is to be filed by a 'Financial Creditor' is provided in 'Form-i' of 'Adjudicating Authority Rules'. 9. Upon perusal of the Adjudicating Authority Rules and Form-1, it may be duly noted that the 'I&B Code' and the 'Adjudicating Authority Rules' recognize that a 'Financial Creditor' being a juristic person can only act through an "Authorised Representative". Entry 5 & 6 (Part I) of Form No.1 mandates the 'Financial Creditor' to submit "name and address of the person authorised to submit application on its behalf (Enclose Authorisation)". 10. The signature block of the aforementioned Form-1 also provides for the authorised person's detail is to be inserted and also includes inter alia the position of the authorised person in relation to the 'Financial Creditor'. Thus, it is clear that an authorised person of the 'Financial Creditor' can make an application under Section 7 of the 'I&B Code'. 11. Learned Counsel for the 'Financial Creditor' referred to Rule 2(6) of t....

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....ditor' submitted that ICICI Bank vide Board's Resolutions dated 3rd May, 2002 and 30th October, 2009 resolved to authorise and execute Power of Attorney in favour of designated officers of the Bank. These resolutions continue to be in force, and authorise officers/Power of Attorney Holders of Bank are entitled to deal with all the legal proceeding for or against the Bank. 19. Reliance has been placed on Hon'ble Supreme Court's decision in "A. C. Narayanan vs. State of Maharashtra (2014) 11 SCC 790" wherein the Hon'ble Supreme Court held: "28. The power:ofattomey holder is the agent of the grantor. When the grantor , a uthorises the attorney holder to initiate legal proceedings and the attorney holder accordingly initiates such legal proceedings, he does so as the agent of the grantor and the initiation is by the grantor represented by his attorney holder in his personal capacity..." 20. According to Learned Counsel for the 'Corporate Debtor', the application under Section 7 of the 'I&B Code' if signed and filed by a 'General Power of Attorney Holder' without specific authorization is not maintainable. According to him, the procedure ....

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....he 'Financial Creditor' within seven days. 25. In reply, Learned Counsel for the 'Financial Creditor' pointed out that during seven days' period, there were Saturday, Sunday and other holidays which cannot be counted for the purpose of counting seven days' period of completion of removal of defect. Otherwise defect was removed within seven days. 26. Having regard to objection regarding the removal of defect, we reject the submission made on behalf of the 'Corporate Debtor, in view of the proviso to sub-section (5) of Section 7 of the 'I&B Code', which reads as follows:- "Provided that the Adjudicating Authority shall, before rejecting the application under clause (b) of sub-section (5), give a notice to the applicant to rectify the defect in his application within seven days of receipt of such notice from the Adjudicating Authority." Similar provision has been made under proviso to sub-section (5) of Section 9 and sub-section (4) of Section 10 of the 'J&B Code'. 27. The seven days for rectification of defects is to be counted not from the date of the order passed by the Adjudicating Authority but from the date of "receipt of such n....

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....on'ble Supreme Court further held: - "60. It is settled law that a consolidating and amending act like the present Central enactment forms a code complete in itself and is exhaustive of the matters dealt with therein The Hon'ble Supreme Court further proceeded to held: - "63. There can be no doubt, therefore, that the Code is a Parliamentary law that is an exhaustive code on the subject matter of insolvency in relation to corporate entities, and is made under Entry 9, List III in the 7th Schedule which reads as under: "9. Bankruptcy and insolvency" 31. As per Section 7 of the 'I&B Code' an application for initiation of 'Corporate Insolvency Resolution Process' requires to be filed by 'Financial Creditor' itself. The form and manner in which an application under section 7 of the 'I&B Code' is to be filed by a 'Financial Creditor' is provided in 'Form-l' of the Adjudicating Authority Rules. Upon perusal of the Adjudicating Authority Rules and Form-1, it may be duly noted that the 'I&B Code' and the Adjudicating Authority Rules recognize that a 'Financial Creditor' being a juristic person can only act t....

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....do needful in the legal proceedings by and against the Bank. If general authorisation is made by any 'Financial Creditor' or 'Operational Creditor' or 'Corporate Applicant' in favour of its officers to do needful in legal proceedings by and against the 'Financial Creditor' / 'Operational Creditor'! 'Corporate Applicant', mere use of word 'Power of. Attorney' while delegating such power will not take away the authority of such officer and 'for all purposes it is to be treated as an 'authorization' by the 'Financial Creditor'! 'Operational Creditor'! 'Corporate Applicant' in favour of its officer, which can be delegated even by designation. In such case, officer delegated with power can claim to be the 'Authorized Representative' for the purpose of filing any application under section 7 or Section 9 or Section 10 of 'I&B Code'. 37. As per Entry 5 & 6 (Part I) of Form No. 1, 'Authorised Representative' is required to write his name and address and position in relation to the 'Financial Creditor'/Bank. If there is any defect, in such case, an application under se....