Liquidator can Pursue Writ Petition for CD on allowance of Liquidator to Prosecute u/s 33(5) of IBC: NCLAT [Read Order]
The NCLAT ruled that the liquidator can pursue writ petition for the CD on allowance of liquidator to prosecute under Section 33(5) of the IBC
NCLAT – National Company Law Appellate Tribunal – Writ Petition – Liquidator Writ Petition – Corporate Debtor Prosecution – Taxscan
NCLAT – National Company Law Appellate Tribunal – Writ Petition – Liquidator Writ Petition – Corporate Debtor Prosecution – Taxscan
The New Delhi Bench of the National Company Law Appellate Tribunal ( NCLAT ) ruled that the liquidator can pursue writ petition for the Corporate Debtor ( CD ) on allowance of liquidator to prosecute under Section 33(5) of the Insolvency and Bankruptcy Code, 2016 ( IBC ).
The Appellant Liquidator subsequently come to know that the Re-Assessment Proceedings has been initiated by the Commercial Tax Department. To protect the interest of the Corporate Debtor, the Appellant – Liquidator immediately filed a Writ Petition seeking necessary direction for quashing the Re-assessment order and the demand raised thereon. When the Writ Petition was heard, objection was raised on behalf of the Respondent that the Liquidator has not sought prior approval from the Adjudicating Authority for preferring the Writ Petition.
The application which was filed by the Liquidator came to be dismissed by the impugned order, aggrieved by which order the present Appeal has been filed.
The counsel for the Appellant challenging the order dated 29.11.2023 contended that when the order is taken into spirit and connotation, the order gives permission to the Liquidator to prosecute any proceedings to protect the interest of the Corporate Debtor. The Writ Petition was filed by the Appellant to protect the interest of the Corporate Debtor and I.A. was filed only for regularization or ex-post facto approval to enable the Liquidator to meet the objection of the Respondent that Writ Petition was filed with due prior permission of the Adjudicating Authority.
A Three Member Bench comprising Justice Ashok Bhushan, Chairperson, Barun Mitra, Member ( Technical ) and Arun Baroka, Member ( Technical ) observed that “There cannot be any exception to requirement of law as contained in Section 33(5) of the Code i.e. legal proceeding may be instituted by the liquidator, on behalf of the corporate debtor, with the prior approval of the Adjudicating Authority. When the application was filed by the Liquidator, this was with intent and purpose to obtain prior approval of the Adjudicating Authority to instituted legal proceeding on behalf of the Corporate Debtor, which application was allowed by the Adjudicating Authority by the order passed on 28.04.2022, which we have already extracted above. The subsequent application became necessary as the objection was raised to the maintainability of the Writ Petition on the ground that there is no prior approval with regard to filing of the Writ petition.”
“Though it is not disputed that there was no specific approval for filing Writ Petition, however, when the Adjudicating Authority has allowed the Liquidator to prosecute on behalf of the Corporate Debtor, we are of the view that the Adjudicating Authority ought to have issued necessary order as prayed in I.A. to clarify that the Liquidator was fully entitled to peruse the Writ Petition on behalf of the Corporate Debtor” the Bench concluded.
To Read the full text of the Order CLICK HERE
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