Case Note & Summary
The judgment pertains to two appeals filed against an order dated 04.03.2024 passed by the National Company Law Tribunal (NCLT), New Delhi Principal Bench, in CP(IB)/288(PB)/2019. The NCLT had allowed IA No.4163(PB)/2021, IA No.3422(PB)/2022, and IA No.3534(PB)/2022 for impleadment of allottees as applicants and admitted a Section 7 application under the Insolvency and Bankruptcy Code, 2016 (IBC) filed by creditors in a class (Respondent Nos.1 to 106 in the appeal). The Corporate Debtor is M/s Gayatri Hospitality and Realcon Ltd. The suspended director, Hari Om Dixit, filed Company Appeal (AT) (Insolvency) No. 513 of 2024 challenging the order. Another appeal, Company Appeal (AT) (Insolvency) No. 1053 of 2024, was filed by Ajit Shrivastava against the same order. The NCLAT heard both appeals together. The main legal issue was whether the Adjudicating Authority correctly allowed impleadment and admitted the Section 7 application. The appellant argued that the application was not maintainable and that the allottees were not financial creditors. However, the NCLAT found that the Corporate Debtor had admitted default and the application was complete. The Tribunal held that the Adjudicating Authority had correctly exercised its discretion in allowing impleadment and admitting the application. The appeals were dismissed, upholding the NCLT order.
Headnote
A) Insolvency and Bankruptcy Code - Section 7 Application - Financial Creditor - Creditors in a Class - The appeal challenged the order admitting a Section 7 application filed by allottees (creditors in a class) against the Corporate Debtor. The NCLAT upheld the admission, holding that the application was complete and default was proved. (Paras 1-10)
B) Insolvency and Bankruptcy Code - Impleadment of Allottees - The Adjudicating Authority allowed impleadment of allottees as applicants. The NCLAT found no error in this order, as the allottees were necessary parties. (Paras 2-5)
C) Insolvency and Bankruptcy Code - Default - The NCLAT noted that the Corporate Debtor had admitted default and the application was complete. Hence, admission under Section 7 was justified. (Paras 6-9)
Issue of Consideration
Whether the Adjudicating Authority was justified in allowing the impleadment of allottees as applicants and admitting the Section 7 application filed by creditors in a class against the Corporate Debtor.
Final Decision
Both appeals are dismissed. The order dated 04.03.2024 passed by NCLT, New Delhi Principal Bench, is upheld.
Law Points
- Insolvency and Bankruptcy Code
- 2016
- Section 7
- Financial Creditor
- Creditors in a class
- Allottees
- Default
- Admission of application
- Impleadment
Case Details
2024 LawText (NCLAT) (01) 117
Company Appeal (AT) (Insolvency) No. 513 of 2024 & I.A. Nos.5085, 6475, 7338 of 2024 and Company Appeal (AT) (Insolvency) No. 1053 of 2024
Mr. Abhijeet Sinha, Sr. Advocate with Mr. Ashish Choudhury, Mr. Saikat Sarkar, Mr. Abhishek Arora, Mr. Anand Kamal, Advocates for Appellant; Mr. Ashvary Vikram, Mr. Lucky Sharma, Mr. Vikash C. Shukla, Advocates for Respondents; Mr. Nipun Gautam, Advocate for IRP; Mr. Krishnendu Datta, Sr. Advocate with Mr. Atul Kumar, Mr. Alok Bhardwaj, Advocates for Intervener; Ms. Tanvi Jain, Advocate for Applicant in IA No.7338 of 2024.
Hari Om Dixit (in Appeal No. 513/2024); Ajit Shrivastava (in Appeal No. 1053/2024)
Ajit Srivastava & Ors. (in Appeal No. 513/2024); Anand Sonbhadra (IRP for Gayatri Hospitality & Realcon Ltd.) & Anr. (in Appeal No. 1053/2024)
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Nature of Litigation
Appeals against order of NCLT admitting Section 7 application under IBC and allowing impleadment of allottees.
Remedy Sought
Setting aside the NCLT order dated 04.03.2024 admitting the Section 7 application and allowing impleadment.
Filing Reason
The suspended director and another party challenged the NCLT order admitting the Section 7 application filed by allottees (creditors in a class) against the Corporate Debtor.
Previous Decisions
NCLT, New Delhi Principal Bench, by order dated 04.03.2024, allowed IA No.4163(PB)/2021, IA No.3422(PB)/2022, and IA No.3534(PB)/2022 for impleadment and admitted the Section 7 application.
Issues
Whether the Adjudicating Authority was justified in allowing the impleadment of allottees as applicants.
Whether the Section 7 application filed by creditors in a class was correctly admitted.
Submissions/Arguments
The appellant argued that the impleadment was not maintainable and the Section 7 application was incomplete.
The respondents contended that the default was admitted and the application was complete, justifying admission.
Ratio Decidendi
The Adjudicating Authority correctly allowed impleadment of allottees as they were necessary parties. The Section 7 application was complete and default was established, warranting admission under Section 7 of the IBC.
Judgment Excerpts
Company Appeal (AT) (Insolvency) No. 513 of 2024 has been filed by the suspended Director of the Corporate Debtor... challenging the order dated 04.03.2024 passed by National Company Law Tribunal... allowing IA No.4163(PB)/2021, IA No.3422(PB)/2022 and IA No.3534(PB)/2022 for impleadment as Applicants and admitting Section 7 application filed by the creditors in a class.
Procedural History
The NCLT, New Delhi Principal Bench, passed an order on 04.03.2024 in CP(IB)/288(PB)/2019, allowing impleadment of allottees and admitting a Section 7 application. Aggrieved, the suspended director filed Company Appeal (AT) (Insolvency) No. 513 of 2024, and another party filed Company Appeal (AT) (Insolvency) No. 1053 of 2024. Both appeals were heard together by NCLAT and dismissed.
Acts & Sections
- Insolvency and Bankruptcy Code, 2016: Section 7
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