The Kerala High Court held that the Liquidator’s decision can be challenged before the tribunal under section 42 of the Insolvency and Bankruptcy (I&B) Code.
As many as 28 petitions were filed against the decision taken by the Liquidator regarding the claims of the petitioners, requesting the court to direct the liquidator not to proceed with the liquidation without giving the claims of workmen.
The counsel for the petitioners has submitted that the decision taken by the Liquidator regarding the claims of the petitioners is incorrect and hence a direction is to be issued to the Liquidator to take a decision afresh after hearing the parties and considering the documents produced by the parties.
The court noted that the decision taken by the liquidator is appealable under Section 42 of the Code.
Section 42 of the I&B Code says that a creditor may appeal to the Adjudicating Authority against the decision of the liquidator accepting or rejecting the claims within fourteen days of the receipt of such decision.
The court said that it is not just and proper for this Court to pass any order exercising the supervisory jurisdiction under Article 227 of the Constitution of India, particularly when so many appeals in this connection are pending consideration by the Tribunal.
The Single Judge Bench of Justice B. Sudheenra Kumar noted that since so many appeals are pending before the Tribunal relating to the issue involved in this case, the Tribunal is directed to dispose of all the appeals, including the appeals to be filed by the petitioners in this case, in accordance with law, as expeditiously as possible, affording reasonable opportunity of hearing to all the affected parties.
The court further directed that no amount shall be disbursed to the creditors until the appeals are disposed of.
However, the court further said that its judgment will not stand in the way of the Liquidator in affecting the sale of the property in accordance with law.Subscribe Taxscan AdFree to view the Judgment