Acute Daily Media Pvt. Ltd. & Ors. Vs Rockman Advertising and Marketing (India) Ltd. & Ors. (NCLAT Delhi)
NCLAT Delhi held that in case there is fraudulent and malicious initiation of Corporate Insolvency Resolution Proceedings [CIRP], adjudicating authority has jurisdiction under the IBC to recall CIRP admission order.
Facts- The present appeal filed under Section 61 of Insolvency and Bankruptcy Code 2016 by the Appellants arises out of the Order dated 12.06.2024 passed by the Adjudicating Authority. By the impugned order, the Adjudicating Authority has allowed application under Section 65 of IBC terminating the Corporate Insolvency Resolution Proceedings initiated against the Corporate Debtor aggrieved by which order, the Appellants have come up in appeal.
Conclusion- Held that there is ample proof to show that the Section 7 application was a motivated attempt to bring the Corporate Debtor into the rigours CIRP proceedings. The bonafide of the Appellants in the filing of the Section 7 application is clearly doubtful. Viewed from the angle of the totality of circumstances, the findings of the Adjudicating Authority that the insolvency proceedings in C.P.(IB)-50(PB)/2021 resulting in the order dated 17.05.2022 were initiated fraudulently and with malicious intent for a purpose other than the resolution of the insolvency of the Corporate Debtor, is neither dehors the records nor unwarranted. When such fraudulent CIRP proceedings are initiated, the Adjudicating Authority has jurisdiction under the IBC to consider the allegations of fraudulent and malicious initiation of CIRP proceedings in terms of Section 65 and recall the CIRP admission order.
