Persons Authorised to file Applications under Insolvency & Bankruptcy Code [IBC] in National Company Law Tribunal [NCLT]
The National Company Law Appellate Tribunal [NCLAT] Judgment dated Sept. 20, 2017 wherein it has been held that a Power of Attorney [POA] Holder is not authorised to file proceedings under IBC and only an ‘Authorised Representative’ by the Board of Directors can file the same.
Background:
ICICI Bank had initiated CIRP against M/s Palogix, the Corporate Debtor for default in honouring its debt obligations. NCLT vide order dated May 16, 2017 accepted the application and appointed an IRP. The Corporate Debtor, M/s Palogix had not raised any dispute with respect to the existence of debt and default on their part.
The issue which was raised by the M/s Palogix that person initiating the Corporate Insolvency Resolution Process [CIRP] was authorised by a Board Resolution of 2002 and 2009, which was much before the IBC was enacted.
When application was taken by the division bench of NCLT, Kolkata, the Member (Judicial) and Member (Technical) had divergent views and hence the matter was referred to the larger bench. By a majority judgment, NCLT held that that for initiating CIRP, there should be a specific authorization to the POA holder.
The Corporate Debtor, M/s Palogix Infrastructure preferred an appeal before NCLAT the order of NCLT dt. April 12, 2017 (vide which ICICI Bank, the
Financial Creditor was allowed to rectify the defects in Form.1) and also against order dated May 16, 2017 ordered appointment of IPR.
Issues:
