The Liquidator of the Corporate Debtor filed an application U/s.60(5) of the Code seeking permission to file an Application under Section 9 of the Code against the Companies, which are liable to pay debts to the Corporate Debtor. The said Application was dismissed by the NCLT. As against the order of Adjudicating Authority, the Liquidator filed Appeal before the National Company Law Appellate Tribunal.
Upon hearing the Appeal, the NCLAT ruled that there is a specific prohibition in Section 11 (d) of the Code to that effect that a Corporate Debtor in respect of whom a Liquidator order has been made is not entitled to file application under Chapter II of the Code.
Though an argument was advanced that by virtue of the Powers conferred U/s.33(5) of the Code, the Liquidator is entitled to initiate CIRP proceedings, it has been rejected by the NCLAT on the ground that Section 33(5) is subject to Section 52, which deals with the right of the Secured Creditor.
It is held by NCLAT that “However, in case where matter does not relate to any secured asset and recovery of any money by the ‘Corporate Debtor’, which is not under Liquidation, a suit or other legal proceedings may be instituted by the Liquidator on behalf of the ‘Corporate Debtor’, but not an application under Section 9 of the I&B Code.”
(Case Law: Abhay N. Manudhane . Vs Gupta Coal India Pvt. Ltd. – Date of Decision of NCLAT- 01-10-2019)
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