The Chennai bench of the National Company Law Appellate Tribunal (NCLAT) held that since the Impugned Order does not fall to be a part of any of the orders contemplated under part II of the Insolvency Bankruptcy Code (I & B Code), 2016 it will not be appealable under Section 61 of the code.
Renuka Devi Rangaswamy, the appellant who is the Resolution Professional of Powertech Private Limited (RPPL) & Regen Infrastructure And Services Private Limited (RISPL) filed the appeal against the adjudication authority’s order. The basic argument of the Counsel for the appellant would be confined to the directives, which have been given by the Adjudicating Authority by referring the matter to the Insolvency and Bankruptcy Board of India, (IBBI) as against the present appellant for seeking an appropriate and necessary action.
One of the issues which will be involved consideration and would be answered by us too is, “whether it is a conclusive direction containing a positive direction, or not as it has been portrayed by the Ld. Counsel for the Appellant”. If the dichotomy of the definition of the resolution professional given under the code is concerned, it means that it is to conduct of the corporate insolvency resolution processes, which is to be performed by a person who is appointed by a body which has been constituted by Insolvency and Bankruptcy Board of India Regulations, 2016 (IBBI) and its powers to regulate the functioning of the Resolution Professional. Thus, appointment has been envisaged under Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016.
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When a body is statutorily created, and particularly when the powers of formulating its regulation are being derived from powers given under Sections 196, 208, and 207 of the I & B Code, a reference to the aforesaid sections are relevant for the purposes of answering the argument extended by the Ld. Counsel for the Appellant, while putting a challenge to the Impugned Order. Section 196 of the I & B Code, provides for the powers and functions of the board and the bifurcation of the powers which has been contained therein in Part IV Chapter 2 of the I & B Code, it is inclusive within itself for holding of an action against the erring registered resolution professional or any authority has registered under Regulation 7 of the IBBI (IP) Regulations of 2016.
When the regulations are deriving their powers, for formulation of regulations from Sections 196, 207 & 208, the reference of Section 208 has to be a power derived for formulation of a regulation that will be inclusive of taking disciplinary action against the resolution professional by the body which has registered the resolution professional, if there is any complaint which is brought to the notice of the registering body, that is Insolvency and Bankruptcy Board of India.
It was observed that the adjudicating authority at the stage of passing the Impugned Order, had not determined any allegation against the present appellant on merits nor any conclusion has been recorded. All the issues which were forming to be part of the basis of referring the issue before the IBBI, are not conclusively determinative in nature. Still, rather the issues are yet to be ventured into merits after conducting an inquiry by the IBBI in accordance with the regulations prescribed under the IBBI regulations of 2016, which would be only, when the registering body is satisfied for taking of any action under the given set of circumstances. The registering body has been completely left open to take an appropriate and necessary action, that may not be determined as to be conclusive in nature, as if, the Adjudicating Authority has already decided the action.
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Since the Impugned Order does not fall to be a part of any of the orders contemplated under part II of the I & B Code, it will not be appealable under Section 61 of the I & B Code. Though the respective counsels have tried to address this Appellate Tribunal, on the various issues pertaining to touching the vitalities, as to whether the set of action complete against the present appellant falls to be a set of allegations, which at all requires the reference to be made to the IBBI for taking of an appropriate action.
As far as the analysis of the allegations and counter-allegations made by the respective counsels against the present appellant, for action or inaction taken by the Appellant during the conduct of the CIRP proceedings and with regard to the implications of the consolidation of the CoC process, is concerned that is exclusively an issue, which is to be determined by the registering body if the IBBI, as to whether at all, the Appellant has erred in non-compliance of the order rendered by the ld. Adjudicating Authority on 10.10.2023, and the earlier judgment of this Appellate Tribunal dated 31.08.2023.
The earlier bench of this Appellate Tribunal has already observed that, the consolidation of the CIRP proceedings would be permissible, though the subject matter is already pending consideration before the Apex Court. It was observed that the direction issued by the Adjudicating Authority by the order of 10.10.2023, which is shown to be apparently not-complied and which has been taken as to be the basis for referring the matter to the IBBI for taking appropriate action, does not call for any interference by this Appellate Tribunal.
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A two member bench of Justice Sharad Kumar Sharma, Member (Judicial) and Jatindranath Swain, Member (Technical) viewed that as far as the specific mandate of the law, the appeal under Section 61 will not lie as against the order and the nature of the order, which is under challenge in the absence of the same being falling under Part II of the I & B Code, where reference of disciplinary action against the resolution professional is directed to be taken by the IBBI itself, since not being an order falling under Part II of the I & B Code, the same would not be appealable.
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