NCLAT allows Impleadment of Party after Closure of Initial CIRP Plea against Corporate Debtor [Read Order]
It was allowed the interlocutory application and the appeal's cause title was directed to be amended to include M/s RDC Concrete India Pvt. Ltd. as a respondent
NCLAT – Impleadment – Party after Closure – Initial CIRP Plea – Corporate Debtor – taxscan
NCLAT – Impleadment – Party after Closure – Initial CIRP Plea – Corporate Debtor – taxscan
The Chennai bench of the National Company Law Appellate Tribunal ( NCLAT ),allowed the impleadment application filed by an Operational Creditor, on the ground that its application to initiate CIRP proceedings against the Corporate Debtor were closed due to initiation of CIRP by another creditor.
M/s RDC Concrete India Pvt. Ltd. (RDC) filed an interlocutory application before the NCLAT for its impleadment as a party in the matter of M/s Ozone Projects Pvt. Ltd. (Corporate Debtor). RDC claimed that it was involved in certain business transactions with Ozone for supplying ready-mix concrete between May 2019 to October 2021. Ozone defaulted in payments and the unpaid dues amounted to Rs. 4.48 Crore.
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The Corporate Insolvency Resolution Process (“CIRP”) had already been initiated against Ozone. Further, the Interim Resolution Professional (“IRP”) was also appointed. RDC contended that Ozone committed fraud against its Operational Creditors. It first defaulted in the payment of dues and once the proceedings to recover dues were initiated, it entered into settlements to get the proceedings dropped. After the proceedings were dropped, it failed to honour the terms of such settlements.
RDC contended that it was necessary to implead it as a party to protect its claim and interest. It was submitted that RDC also filed a petition to initiate CIRP proceedings against Ozone. However, since the CIRP proceedings were initiated against Ozone by another creditor, RDC was directed to file its claim before the IRP. The subject matter of the proceedings also included claims of RDC against Ozone. Therefore, RDC wanted to be impleaded as a party in the matter.
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On the other hand, Ozone contended that the appeal concerned only the dispute between M/s. Shapoorji Pallonji and Co. Ltd. (“Shapoorji”) and Ozone. Further, the inclusion of additional parties could prolong the proceedings.
It was noted that RDC had previously initiated CIRP proceedings against Ozone, which were closed due to CIRP being initiated under another application by another creditor. Since RDC was directed to file claims in the ongoing CIRP, the NCLAT found it to be a necessary party for effective adjudication.
The Chennai bench of Justice Sharad Kumar Sharma ( Judicial Member ) and Mr Jatindranath Swain (Technical Member) allowed the interlocutory application and the appeal's cause title was directed to be amended to include M/s RDC Concrete India Pvt. Ltd. as a respondent. The amendment was required to be completed within 48 hours.
To Read the full text of the Order CLICK HERE
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