Case Note & Summary
The present appeal was filed under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC) by Romi Datta, a shareholder of Sahara Q Shop Unique Products Range Limited (the corporate debtor), against the order dated 06.12.2023 passed by the Adjudicating Authority (NCLT, Mumbai Bench-IV) in CP (IB) No. 678 of 2022. By the impugned order, the Adjudicating Authority admitted the petition filed by Sigma Supply Chain Solutions Pvt. Ltd. (the operational creditor) under Section 9 of the IBC, initiating Corporate Insolvency Resolution Process (CIRP) against the corporate debtor. The appellant, claiming to be a shareholder, contended that the admission order was erroneous as there was no debt or default, and that the operational creditor had not provided the required documents. The respondent No.1 (operational creditor) argued that the appellant lacked locus standi to file the appeal as a shareholder is not an 'aggrieved person' under Section 61 of the IBC. The NCLAT examined the issue of maintainability and held that under Section 61 of the IBC, only an 'aggrieved person' can file an appeal. Relying on the Supreme Court's decision in 'Phool Chand v. State of Rajasthan' and other precedents, the NCLAT observed that a shareholder is not a person aggrieved by the admission of a CIRP petition filed by an operational creditor, as the shareholder's rights are not directly affected. The appeal was dismissed as not maintainable. On merits, the NCLAT also noted that the corporate debtor had not raised any dispute regarding the debt prior to the demand notice, and the Adjudicating Authority had correctly admitted the petition. The appeal was dismissed with no order as to costs.
Headnote
A) Insolvency Law - Locus Standi of Shareholder - Section 61 IBC - Appeal against admission of CIRP - The appellant, a shareholder of the corporate debtor, challenged the order admitting the Section 9 petition filed by the operational creditor. The NCLAT held that a shareholder is not an 'aggrieved person' under Section 61 of the IBC and thus lacks locus standi to file an appeal against the admission order. The appeal was dismissed as not maintainable. (Paras 1-19) B) Insolvency Law - Operational Creditor - Section 9 IBC - Admission of CIRP - The Adjudicating Authority admitted the petition filed by the operational creditor under Section 9 of the IBC, finding that the debt and default were established. The NCLAT upheld the admission order on merits, noting that the corporate debtor had not raised any dispute regarding the debt prior to the demand notice. (Paras 1-19)
Issue of Consideration
Whether a shareholder of the corporate debtor is an aggrieved person entitled to file an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 against an order admitting a petition under Section 9 of the IBC.
Final Decision
The appeal is dismissed as not maintainable. The appellant, being a shareholder, is not an aggrieved person under Section 61 of the IBC. No order as to costs.
Law Points
- Shareholder not an aggrieved person under Section 61 IBC
- Operational creditor CIRP admission
- Section 9 IBC
- Section 61 IBC
- Locus standi of shareholder
