No Prohibition of appearance of Advocate in representing different Company, in separate proceedings u/s 7 IBC: NCLAT [Read Order]

The New Delhi Bench of the National Company Law Appellate Tribunal (NCLAT), held that there is No prohibition of appearance of Advocate in representing different company, in separate proceedings under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016.

The Appellant, Anand Varma was appointed as the Resolution Professional in the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor, ‘National Plywood Industries Ltd.’

The Appellantwas approached on behalf of ‘Damayanti Tea Industries’ for file a Section 7 Application against an entity ‘Bochapathar Tea Estate’. An Application under Section 7 of IBC was filed by the Appellant as Advocate for ‘Damayanti Tea Industries’. Later Piyush Periwal (Respondent 1) filed an application before the Adjudicating Authority alleging the conflict of interest and collusion between Appellant, Respondent Nos. 2, 3 and 4.

The Adjudicating Authority made certain prejudicial observations against the appellant and in the present appeal, the only prayer is to expunge the remarks made against the Appellant in the order.

The Counsel for the appellant contended that that the Adjudicating Authority has observed that the Appellant has appeared for the Resolution Professional in the CIRP of the Corporate Debtor and has also appeared on behalf of the Resolution Applicant. The very basis of observations by the Adjudicating Authority that Appellant has appeared for Respondent Nos 2 and 4 is unfounded. The Appellant was not representing Respondent No.4 in the CIRP of the Corporate Debtor.

The Counsel further submitted that the Appellant had filed an Application under Section 7 on behalf of ‘Damayanti Tea Industries’ a separate company and that the Adjudicating Authority has jumped to the conclusion that the Appellant has appeared both for Respondent Nos.2 and 4 which observation is factually incorrect.

A Bench consisting of Justice Prashant Bhushan, Chairperson, Dr Alok Srivastava, Technical Member and Barun Mitra, Technical Member observed that “No prohibition can be read in the statutory provision governing appearance of an Advocate in representing a different company in separate proceedings filed under Section 7. The present is not a case that Appellant has appeared for Resolution Professional and Resolution Applicant i.e. Respondent No.4 in the CIRP of the Corporate Debtor.”

To Read the full text of the Order CLICK HERE

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