Court Halts Insolvency Process, Grants Petitioner Time to AppealMaintainability of application - initiation of CIRP - petitioners justify the approach to this court challenging the same alleging that even before the order is served on them, the third respondent, the Interim Resolution Professional appointed by the Tribunal in terms of the order, has commenced the insolvency resolution process, including public announcement - HELD THAT:- It is deemed appropriate to dispose of the writ petition directing the third respondent to defer further proceedings pursua... ... ... Issues:
Challenge to order admitting corporate insolvency resolution process, Allegation of irreparable damage due to premature initiation of insolvency resolution process by Interim Resolution Professional.

Issue 1: Challenge to order admitting corporate insolvency resolution process

The judgment concerns a challenge to an order passed by the National Company Law Tribunal (the Tribunal) admitting an application for initiating corporate insolvency resolution process against the first petitioner. The petitioners, despite the order being appealable, approach the court alleging that the Interim Resolution Professional appointed by the Tribunal has commenced the insolvency resolution process, including public announcement, even before serving the order on them. The petitioners claim to have sustainable grounds to challenge the order before the appellate authority and argue that the actions taken by the Interim Resolution Professional before the expiry of the period of limitation for appeal are causing irreparable damage to the first petitioner.

Issue 2: Allegation of irreparable damage due to premature initiation of insolvency resolution process by Interim Resolution Professional

The High Court, after hearing the counsel for the petitioners and the Standing Counsel for the first respondent Bank, decides to dispose of the writ petition by directing the third respondent, the Interim Resolution Professional, to defer further proceedings pursuant to the challenged order until a specified date. The court orders the third respondent to defer proceedings till 23.10.2019 and further defers proceedings for an additional week if the petitioners file an appeal against the order by the specified date. This decision aims to prevent irreparable damage to the first petitioner due to the premature initiation of the insolvency resolution process by the Interim Resolution Professional.

This judgment from the Kerala High Court addresses the challenge to an order admitting a corporate insolvency resolution process and the allegation of irreparable damage caused by the premature initiation of proceedings by the Interim Resolution Professional. The court's directive to defer further proceedings aims to protect the interests of the petitioner and ensure a fair opportunity to challenge the order before the appellate authority. Maintainability of application - initiation of CIRP - petitioners justify the approach to this court challenging the same alleging that even before the order is served on them, the third respondent, the Interim Resolution Professional appointed by the Tribunal in terms of the order, has commenced the insolvency resolution process, including public announcement - HELD THAT:- It is deemed appropriate to dispose of the writ petition directing the third respondent to defer further proceedings pursuant to Ext.P5 till 23.10.2019. Ordered accordingly. If the petitioners prefer an appeal challenging Ext.P5 order on or before 23.10.2019, further proceedings pursuant to Ext.P5 shall be deferred for a further period of one week also. M/s. Sargam Builders Pvt. Ltd., V.K. Abdul Rahim Versus The Federal Bank Limited, The National Company Law Tribunal, Mr. Jasin Jose Ponmattam
Companies Law
2019 (10) TMI 1299 - KERALA HIGH COURT - TMI
KERALA HIGH COURT - HC
Dated:- 1-10-2019
WP(C).No. 25642 OF 2019(E) - -
Corporate Laws
Mr. P.B.Suresh Kumar, J. By Advs.: SRI.S.Easwaran, Sri.P.Muraleedharan (Irimpanam), Sri.M.A.Augustine, Sri.P.Sreekumar (Thottakkattukara), Smt.Soumya James By Adv.: Sri.Mohan Jacob George JUDGMENT Ext.P5 order passed by the National Company Law Tribunal (the Tribunal) in terms of which the Tribunal has admitted an application for initiating corporate insolvency resolution process against the first petitioner, is under challenge in the writ petition. The impugned order is though appealable, the petitioners justify the approach to this court challenging the same alleging that even before the order is served on them, the third respondent, the Interim Resolution Professional appointed by the Tribunal in terms of the order, has commenced the insolvency resolution process, including public announcement. The case set out by the petitioners in the writ petition is that they have sustainable grounds to challenge the order of the Tribunal before the appellate authority and the steps that are being taken by the Interim Resolution Professional before the expiry of the period of limitation prescribed for appeal against the order of the Tribunal are causing irreparable damage to the first petitioner. 2. Heard the learned counsel for the petitioners as also the learned Standing Counsel for the first respondent Bank. There is no appearance for the third respondent. Having regard to the facts and circumstances of the case, I deem it appropriate to dispose of the writ petition directing the third respondent to defer further proceedings pursuant to Ext.P5 till 23.10.2019. Ordered accordingly. If the petitioners prefer an appeal challenging Ext.P5 order on or before 23.10.2019, further proceedings pursuant to Ext.P5 shall be deferred for a further period of one week also.
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