Case Note & Summary
The appellant, Mr. C. Sivasami, was the successful resolution applicant and promoter of M/s. Topknit Processing Mills Pvt. Ltd., the corporate debtor. He filed an appeal against the order dated 10.05.2024 passed by the National Company Law Tribunal, Chennai Bench, in IA/IBC/1748/2023 in IBA/902/2019. By the impugned order, the Adjudicating Authority rejected the appellant's application seeking (i) stay of the operation of its earlier order dated 26.07.2023 directing liquidation of the corporate debtor and appointment of liquidator, to enable the appellant to deposit the balance amount of Rs.9,37,50,000/- into the liquidation account, and (ii) direction to the liquidator to put on hold the liquidation proceedings. The appellant contended that the impugned order was erroneous. The Appellate Tribunal, after hearing the parties, found that the appellant had been given sufficient time to deposit the balance amount but failed to do so. The Tribunal noted that the Adjudicating Authority had already extended time for deposit, and the appellant's failure to comply justified the rejection of the application. Consequently, the appeal was dismissed, upholding the impugned order.
Headnote
A) Insolvency and Bankruptcy Code - Liquidation - Stay of Liquidation - Section 33, Section 61 - The appellant, a successful resolution applicant, sought stay of liquidation order and extension of time to deposit balance amount of Rs.9,37,50,000/-. The Adjudicating Authority rejected the application. The Appellate Tribunal held that the appellant failed to deposit the balance amount within the extended time and thus no interference is warranted. (Paras 1-9)
Issue of Consideration
Whether the Adjudicating Authority erred in rejecting the application of the successful resolution applicant seeking stay of liquidation and extension of time to deposit the balance amount.
Final Decision
The appeal is dismissed. The impugned order dated 10.05.2024 is upheld.
Law Points
- Insolvency and Bankruptcy Code
- 2016
- Section 61
- Section 33
- Liquidation
- Resolution Plan
- Extension of Time
- Deposit of Balance Amount
Case Details
2024 LawText (NCLAT) (01) 77
Company Appeal (AT) (CH) (Ins) No. 246/2024 (IA No. 651/2024)
Mr. TK Bhaskar, Advocate for Mr. Sankar Varadharajan, Advocate for Appellant; Mr. Sathiyanarayanan, Advocate for Respondent No.1; Mr. Dhruva, Advocate for Respondent No.2
Mr. A.R. Ramasubramania Raja, Liquidator of M/s. Topknit Processing Mills Pvt. Ltd. & M/s. Small Industries Development Bank of India
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Appeal against rejection of application seeking stay of liquidation and extension of time to deposit balance amount.
Remedy Sought
Appellant sought stay of liquidation order and direction to liquidator to hold proceedings to enable deposit of balance amount.
Filing Reason
Appellant failed to deposit balance amount within extended time, leading to rejection of his application by Adjudicating Authority.
Previous Decisions
Adjudicating Authority passed order dated 26.07.2023 directing liquidation and appointing liquidator; later rejected IA No.1748/2023 on 10.05.2024.
Issues
Whether the Adjudicating Authority erred in rejecting the application for stay of liquidation and extension of time to deposit balance amount.
Submissions/Arguments
Appellant argued that he should be allowed to deposit the balance amount and liquidation should be stayed.
Respondents opposed the application, stating that appellant had already been given sufficient time.
Ratio Decidendi
The successful resolution applicant failed to deposit the balance amount within the extended time granted by the Adjudicating Authority, and therefore, the rejection of the application for stay of liquidation and extension of time was justified.
Judgment Excerpts
The Appellant contends that the Impugned Order rejecting the aforesaid IA preferred by the Appellant being IA No.1748/2023 was rejected.
Procedural History
The Adjudicating Authority passed an order on 26.07.2023 directing liquidation of the corporate debtor and appointment of liquidator. The appellant filed IA No.1748/2023 seeking stay of that order and extension of time to deposit balance amount. The Adjudicating Authority rejected the IA on 10.05.2024. The appellant then filed the present appeal before NCLAT.
Acts & Sections
- Insolvency and Bankruptcy Code, 2016: Section 33, Section 61
