TaxTMI 
TaxTMI 
2025 (6) TMI 30
X X X X Extracts X X X X
X X X X Extracts X X X X
....nsolvency and Bankruptcy Code, 2016 ("IBC" in short) by the common Appellant-Managing Director of the Corporate Debtor which arises out of two orders dated 28.03.2025 and 29.04.2025 (hereinafter referred to as "Impugned Order") passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench-II) in IA No. 450(AHM)/2025 in Company Petition (IB) No. 354(AHM)/2024. Aggrieved by the impugned order dated 28.03.2025, Company Appeal No. 800 of 2025 has been filed by the Appellant challenging the said order passed in I.A No. 450 of 2025 by which the Adjudicating Authority has directed that status quo as on date be maintained with regard to the Liquidator-Respondent No.1. The second Company Appeal No. 801 of 2025 has been filed challenging the impugned order dated 29.04.2025 passed in I.A. No. 450 of 2025 by which the Adjudicating Authority has de-reserved its earlier order of 02.04.2025 for judgement and pronouncement on IA No. 450 of 2025 challenging removal of Respondent No.1-Liquidator. 2. It may be pertinent to mention that the facts of both the appeals stem from the same sequence of events. We are therefore conjointly outlining the relevant event for deciding both....
X X X X Extracts X X X X
X X X X Extracts X X X X
....; in response to the Removal Application. 28.03.2025 The Adjudicating Authority directed parties to file replies to the Removal Application and to maintain status quo in respect of the Liquidator. This "status quo order" has been impugned by the Appellant in CA (AT) (Ins) No.800 of 2025. 01.04.2025 Respondent No. 2 filed reply to the Removal Application. The Appellant and Respondent Nos. 3 to 5 filed affidavits adopting the reply filed by Respondent No. 2. 02.04.2025 After hearing the parties, Adjudicating Authority reserved final order and judgment in the Removal Application and directed the Appellant and Respondent No.1 to file written submissions. 03.04.2025 The Appellant filed written submissions before the Adjudicating Authority. 29.04.2025 The Adjudicating Authority de-reserved final order and judgment in the Removal Application. Aggrieved by the Impugned Order, the Appellant has come up in CA (AT) (Ins) No.801 of 2025. 3. Making his submissions, Shri Abhijit Sinha, Ld. Sr. Counsel for the Appellant submitted that that the Corporate Debtor-TIIPL was undergoing voluntary liquidation process in accordance with Section 59 of the IBC which is a self-contained statutory....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tely stamped; that the Appellant had signed the replies filed on behalf of Respondent No. 2 to 5 who were foreign citizens without proper authority and supporting Board Resolutions. It was submitted that the Adjudicating Authority was well aware of these purported procedural defects at the time of reserving the order on 02.04.2025. It was further asserted that the Respondent No.1 had also raised these grounds even at the time of hearing when the order was reserved on 02.04.2025. Hence, when these grounds were already in the knowledge of the Adjudicating Authority at the time of passing of the orders on 02.04.2025 reserving the judgement, these grounds could not have formed the basis for de-reserving final order and judgment on the removal application. 6. Refuting the contentions of the Appellant, it was submitted by Shri Gaurav Mitra, Ld. Counsel for the Respondent that the removal of the Liquidator by the Appellant and Respondent Nos. 2 to 5 was not in compliance with statutory requirement and without proper authorisation. Submission was made that the Adjudicating Authority had correctly noted that there was no Board Resolution passed by Respondent No.2 authorising the foreign sh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....It was contended that the Appellant could have challenged the status quo order of 28.03.2025 if it was opposed to the status quo instead of waiting until 12.05.2025 to file the appeal. Per contra, the Appellant submitted that since the IA No. 450 of 2025 was listed for further consideration on 02.04.2025 on which date the IA was reserved for final order and judgment, the Appellant for bonafide reasons awaited the final order. However, only on 29.04.2025 when the Adjudicating Authority passed an order de-reserving the final judgment which once again led to effective continuance of the status quo of Respondent No.1 as Liquidator, it immediately proceeded to file the appeal. In any case, it was contended that it was filed within the permissible extended period of 45 days. 9. Having considered the rival submissions made on the subject of limitation, we are of the considered view that it lies within the jurisdiction of this Tribunal under proviso to Section 61(2) of IBC to condone delay when appeals are filed after expiry of a period of 30 days as long as such delay does not exceed 15 days if the Tribunal is satisfied that there was sufficient cause for the delay. In the present facts ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Board was also ratified by the EGM. This status quo order of the Adjudicating Authority tantamount to transgression of jurisdiction by the Adjudicating Authority rendering the impugned order of 28.03.2025 as one being in the teeth of the express provisions of the IBC and VL Regulations. 11. At this stage, it may be useful and constructive to notice the relevant provisions contained in Section 59 of IBC and Regulation 5 of VL Regulations which reads as under: Section 59. Voluntary liquidation of corporate persons. 1. A corporate person who intends to liquidate itself voluntarily and has not committed any default may initiate voluntary liquidation proceedings under the provisions of this Chapter. 2. The voluntary liquidation of a corporate person under sub-section (1) shall meet such conditions and procedural requirements as may be specified by the Board. IBBI (VOLUNTARY LIQUIDATION) REGULATIONS, 2017 5. Appointment of Liquidator.-(1) Subject to Regulation 6, the corporate person shall appoint an insolvency professional as liquidator, and, wherever required, may replace him by appointing another insolvency professional as liquidator, by a resolution passed under cl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efore the orders directing the maintenance of status quo was passed by the Adjudicating Authority on 28.03.2025. 14. Given this backdrop, we therefore find force in the contention of the Appellant that the Adjudicating Authority by the impugned order directing the continuance of Respondent No.1 as Liquidator on the Corporate Debtor acted in violation of the statutory framework of IBC. Moreover, when the statutory provisions provide an enabling framework to the Directors and Shareholders of the Corporate Debtor to replace the Liquidator "wherever required", the Adjudicating Authority did not have the jurisdiction to force status quo upon the Corporate Debtor for continuing with Respondent No.1 as the Liquidator. 15. We put all emphasis at our command to point out that the process of replacement of a Liquidator in the voluntary liquidation process of a solvent Corporate Debtor falls in an entirely different regime from liquidation process undertaken following CIRP. Present being a case of voluntary liquidation, we are of the considered view that the process of replacement of the Respondent No.1-Liquidator is complete in all respects. When no further approval of the Adjudicating Aut....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e vakalatnama himself with respect to Respondent No.2 that can be taken on record." Thus, if while reserving the order on 02.04.2025, the Adjudicating Authority had taken a conscious decision to proceed basis the vakalatnama and other documents produced by the present Appellant, it remains unexplained why after a gap of 27 days, the Adjudicating Authority suddenly turned volte face and de-reserved the same order by questioning the compliances on the part of Respondent No.2 to 5. Facts concerning the Affidavits and Letters of Authority etc. of the Respondent Nos 3 to 5 were already in the full knowledge of the Adjudicating Authority and only after taking due cognisance of these, it had reserved the judgment. Thus, the impugned order of 29.04.2025 and the earlier order of 02.04.2025 are in contradiction of each other. 19. We are also constrained to observe that the Adjudicating Authority while passing the impugned order of 29.04.2025 has failed to apply its mind on the observations made by itself in its order dated 02.04.2025 wherein it has noted that IA 450 of 2025 "is filed by the Liquidator who has been changed by the Respondents with a new Liquidator R 6 during the voluntary liq....