Case Note & Summary
The appeal was filed by Mekaster Finlease Limited, a financial creditor, against the order of the National Company Law Tribunal, Jaipur Bench, which dismissed its application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Prayag Polytech Private Limited, the corporate debtor. The Appellant had advanced a total of Rs. 1,55,00,000/- to the Respondent, which was stated to be repayable on demand, and claimed an amount of Rs. 2,14,73,221/- as default. The Tribunal rejected the application, leading to the present appeal. During the pendency of the appeal, another creditor, Union Bank of India, initiated CIRP against the same corporate debtor, which was admitted on 10.02.2026. The Appellant lodged its claim in the ongoing CIRP, but it was not admitted based on the earlier findings of the Adjudicating Authority. The Appellant contended that the appeal should continue as the findings affected its status in the ongoing CIRP. However, the Respondent argued that the appeal had become infructuous due to the commencement of CIRP, which barred any parallel proceedings. The Tribunal analyzed the submissions and concluded that the relief sought by the Appellant had already been granted through the CIRP initiated by Union Bank, and thus, the appeal was dismissed as infructuous, with the Appellant advised to pursue its claim through the ongoing CIRP process.
Headnote
A) Insolvency Law - Corporate Insolvency Resolution Process - Appeal Dismissal - Insolvency and Bankruptcy Code, 2016, Section 61 - The appeal was dismissed as infructuous due to the initiation of CIRP against the Corporate Debtor, which rendered the original prayer for initiation of CIRP incapable of grant. The court held that the Appellant's grievance regarding non-admission of its claim must be pursued through the remedies available under the Code in the ongoing CIRP (Paras 31-32).
Issue of Consideration
Whether the present Appeal survives in view of the subsequent commencement of CIRP against the same Corporate Debtor?
Final Decision
The appeal was dismissed as infructuous due to the initiation of CIRP against the Corporate Debtor, which rendered the original prayer for initiation of CIRP incapable of grant. The Appellant was advised to pursue its claim through the ongoing CIRP process.
Law Points
- Insolvency and Bankruptcy
- Corporate Insolvency Resolution Process
- Financial Debt
- Moratorium
- Claims Adjudication
