Case Note & Summary
The dispute arose in the context of a Corporate Insolvency Resolution Process (CIRP) initiated against N. Kumar Housing & Infrastructure Private Limited, where the appellant, a suspended director, sought interim relief through an application. The appellant aimed to deposit a significant amount as security for creditors and requested the Tribunal to maintain status quo during the proceedings. The appellant's application was based on the premise that it would not close the CIRP or withdraw the Section 7 application. The financial creditor, Omkara, had claimed dues exceeding Rs. 128 crores, which had escalated over time since the CIRP commenced on 24.02.2023. The appellant's previous attempts to negotiate a settlement had been unsuccessful, and the application was seen as an attempt to circumvent the established legal framework under the Insolvency and Bankruptcy Code, 2016. The Tribunal noted that the appellant had previously been set ex parte for non-cooperation and had failed to comply with directives to hand over assets. The respondent argued that the application was misconceived and sought to halt the CIRP process, which was barred under Section 12A of the Code. The Tribunal concluded that the application was an abuse of process and dismissed it, emphasizing that the appellant could not compel the financial creditor to settle against its will. The appeal was scheduled for further proceedings on 02.11.2026.
Headnote
A) Insolvency Law - Interim Relief - Application for Deposit - The Appellant sought permission to deposit amounts as security for creditors and maintain status quo during pending proceedings. The Tribunal found the application to be an abuse of process as it sought to halt the CIRP and was barred under Section 12A of the Insolvency and Bankruptcy Code, 2016. Held that the application lacked merit and was dismissed (Paras 32-32).
Issue of Consideration
Whether the interim application for deposit and stay of proceedings in the Corporate Insolvency Resolution Process was valid.
Final Decision
The Tribunal dismissed the interim application, finding it lacked merit and constituted an abuse of process, emphasizing compliance with the provisions of the Insolvency and Bankruptcy Code, 2016.
Law Points
- Interim relief
- Corporate Insolvency Resolution Process
- Non-cooperation
- Withdrawal of application
- Abuse of process
