TaxTMI 
TaxTMI 
2026 (1) TMI 3
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....t that this application as well as the Commercial Execution Application is not maintainable as the Award Debtor viz. Ogene Systems (I) Pvt Ltd. has been dissolved by the order dated 13th April 2023 of the National Company Law Tribunal ("NCLT") and also that this Court has no jurisdiction to entertain this application as well as the Execution Application, in as much as, there are allegations of fraud and misrepresentation involved in the way in which the order dated 13th April 2023 of the NCLT was obtained and the Award Debtor company dissolved as well as the allegation that the directors of the Award Debtor company in connivance with the Resolution Professional have misappropriated the funds of the company, and would have to be decided only by the NCLT or the National Company Law Appellate Tribunal ("NCLAT") and not this Court. 3. Mr. Arsiwalla, learned Counsel for the Applicant, has at the outset submitted that the Applicant did not have any notice of the proceedings before the NCLT nor was any notice as per Regulation 6-A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulation, 2016, given/sent to the Applicant. That, th....
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.... No. 909 of 2018 the Award Debtor company was directed to file an affidavit of disclosure disclosing its movable and immovable assets and this Court had also restrained the Award Debtor company from dealing with its movable and immovable assets till the adjourned date of hearing and the matter was adjourned to 25th February 2020. That the matter was not listed on 25th February 2020 and was thereafter listed on 04th March 2020 when due to paucity of time the matter was adjourned to 17th March 2020 and thereafter on 11th March 2020, by consent, the matter was stood over to 16th March 2020 and that the stay was operating against the Award Debtor and that the Resolution Professional dealing with the Award Debtor company should have noted the same and the operational debt of the Applicant of around Rs. 15 Crores should not have gone unnoticed by the Resolution Professional. 7. Mr. Arsiwalla submits that even the disclosure dated 14th March 2020 filed by the Managing Director of the Award Debtor was fraught with discrepancies. Mr. Arsiwalla has drawn this Court's attention to a table at paragraph 2 of the disclosure Affidavit submitting that the immovable assets are nil, the movable a....
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....iction over the places where registered office of the corporate person is located. Referring to Section 60(5)(c) of the IBC, Mr. Tamboly submits that the said clause is a non-obstante clause which clearly provides that the NCLT shall have jurisdiction to entertain or dispose of any question of priorities or any question of law or facts arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under the IBC. Mr. Tamboly submits that, therefore, this Court, in execution has no jurisdiction to decide whether the proceedings under the IBC have been vitiated on account of fraud. Mr. Tamboly relies upon the decision of the Hon'ble Supreme Court in the case of Gujarat Urja Vikas Nigam Limited v. Amit Gupta and Others (2021) 7 SCC 209 in support. Mr. Tamboly further submits that Section 65 of IBC expressly vests the NCLT/NCLAT with jurisdiction over the question of alleged fraudulent initiation of CIRP or liquidation proceedings and relies upon the decision of the Hon'ble Supreme Court in the case of Embassy Property Developments Private Ltd v State of Karnataka and Others (2020) 13 SCC 308. Mr. Tamboly further sub....
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....olution Professional of the Award Debtor also submits that in addition to the application not being maintainable, this Court has no jurisdiction under Sections 63 and 231 of the IBC, and the application ought to be dismissed. 15. In addition to adopting the arguments canvassed by Mr. Tamboly on want of jurisdiction, Ms. Mohanty submits that under Section 231 of the IBC also there is a bar of jurisdiction of a Civil Court in respect of any matter in which the NCLT or the Insolvency and Bankruptcy Board of India (the "IBBI") is empowered by or under the IBC to pass any order. Ms. Mohanty submits that any challenge to the dissolution order or process of CIRP has to be filed before the NCLT/NCLAT under Section 65 of the IBC and the jurisdiction of a Civil Court is expressly barred, and that, therefore, this Court has no jurisdiction to entertain this application. 16. As regards the allegations levelled against the Respondent No. 4 that the resolution professional has not performed her duties, Ms. Mohanty submits that the same are incorrect in as much as proposed Respondent no. 4 has diligently performed her duties under the IBC and followed the due process as a Resolution Profess....
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....13th April 2023 has not been challenged by any party including the Applicant and is final. 22. It is not in dispute that on 11th February 2020 this Court in execution had directed disclosure of movable and immovable assets by the Award Debtor and also injuncted the Award Debtor from in any manner dealing with their movable and immovable assets till the adjourned date of hearing, however, what is pertinent to observe is that the said order of disclosure clearly provided that the same was without in any manner foreclosing the entitlement and right of the Award Debtor to contend that this Court has no jurisdiction. It is also pertinent to note that the said order of injunction was not in force on the date on which the CIRP has been initiated viz. on 26th September 2022 or when the Award Debtor was dissolved on 13th April 2023 as the suo moto order of the Hon'ble Supreme Court dated 10th January 2022 ended in May 2022. 23. After filing of the application under Section 7 of the IBC by the financial creditor against the Award Debtor before the NCLT Hyderabad, and after the Application was admitted by the NCLT Hyderabad and CIRP was initiated against the Award Debtor on 26th Sep....
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....solved. It has, in my view, therefore been rightly contended on behalf of the Respondents that no proceedings can be initiated or continued against the Award Debtor, who is non-existent. 32A. But what the Applicant is seeking by this application is to implead the Respondents who are the ex-directors of the dissolved Award Debtor and its erstwhile Resolution Professional and to execute the award against them in their personal capacities on the ground that the proceedings under the IBC were fraudulent and only intended to defeat the claim of the Applicant and frustrate the Award. 33. The first submission that has been canvassed on behalf of the Applicant is that no proper notice under Regulation 6A of the IBBI (Insolvency Resolution Process of Corporate Persons) Regulation 2016 had been given to the Execution Applicant and since the Execution Applicant is an Award holder, who had no knowledge of the same, the entire CIRP and the dissolution stand vitiated. I am afraid, I am unable to accept this contention. Regulation 6-A pertains to communication to the creditor by the IRP along with a copy of the public announcement made under Regulation 6 to all the creditors as per the last....
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....iquidation proceeding of such corporate debtor. (4) The National Company Law Tribunal shall be vested with all the powers of the Debt Recovery Tribunal as contemplated under Part III of this Code for the purpose of sub-section (2). (5) Notwithstanding anything to the contrary contained in any other law for the time being in force, the National Company Law Tribunal shall have jurisdiction to entertain or dispose of - (a) any application or proceeding by or against the corporate debtor or corporate person; (b) any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries situated in India; and (c) any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code. (6) Notwithstanding anything contained in the Limitation Act, 1963 (36 of 1963) or in any other law for the time being in force, in computing the period of limitation specified for any suit or application by or against a corporate debtor for which an order of moratorium h....
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.... shall have jurisdiction to entertain or dispose of any question of priorities or any question of law or facts arising out of or in relation to the insolvency resolution or liquidation proceedings of the Corporate debtor or Corporate person under the IBC. The other ground, as noted above, that has been sought to be canvassed on behalf of the Execution Applicant is fraud and misappropriation of funds in obtaining the order dated 13th April 2023 from the NCLT. Fraud, misrepresentation, misappropriation of funds are allegations involving facts and which have to be proved by adducing evidence. The challenge on the basis of these allegations is to the order dated 13th April 2023 passed by the NCLT whereby the NCLT has passed an order directing dissolution of the Award debtor recording that there are no assets to be disposed of and that the operations of the Award debtor have been completely wound up. In my view, the NCLT/NCLAT have jurisdiction to determine the aforesaid facts and also to decide whether the order dated 13th April 2023 was vitiated by fraud, misrepresentation and misappropriation thereby. Infact, Section 65, as noted above, also provides for penalty for fraud or maliciou....