Power to file Application u/s 7 of the IBC can be delegated by AGM to GM: NCLT [Read Order]

The Delhi Bench of the National Company Law Tribunal (NCLT) has held that the power to file application u/s 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) can be delegated by AGM to GM.

Ms Vaishnavi Viswanathan, Advocate appeared for the appellant and Mr Akshat Khare, Advocate appeared for the respondent.

Mr Rakshit Dhirajlal Doshi, the Appellant filed petition under Section 61 of the IBC being aggrieved and dissatisfied by the order dated 31.08.2021 passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad whereunder the Respondent herein filed an Application under Section 7 of the IBC for initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor / Appellant – M/s  Doshion  Private  Limited was allowed and appointed Mr Ramchandra Dallaram Choudhary as IRP.

Doshion Private Limited is a private company engaged in the business of manufacturing and supply of water solutions for over 30 years. The Company obtained financial assistance under Consortium Finance from various banks to meet its working capital requirements. The Respondent Bank agreed to financial assistance to the Appellant was Rs. 32.70 crores and the financial loan was sanctioned by the Respondent Bank.

After more than 3 years of classifying the Appellant’s company account as N.P.A, the Respondent applied Section 7 of the IBC before the Adjudicating Authority and after hearing the parties the impugned order was passed.

It was contended by the petitioner that the Committee of Creditors in its meeting resolved to initiate liquidation of the Corporate Debtor and accordingly Resolution Professional had filed under Section 31 of the IBC and the same is pending for consideration.

The NCLT bench of Justice Anant Bijay Singh agreed with the reasons given by the Adjudicating Authority while passing the impugned order and as the CoC has recommended for liquidation of the Company which is pending before the Adjudicating Authority.

The Impugned Order dated 31.08.2021 passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench) was affirmed by the NCLT and dismissed the appeal.

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