Vinod Singh Vs Chandra Prakash Jain (NCLAT Delhi)
NCLAT Delhi held that status quo order by forcing corporate debtor to restore liquidator amounts to stalling the voluntary liquidation process. Thus, adjudicating authority cannot restore status quo under voluntary liquidation process.
Facts- The Corporate Debtor-TIIPL was undergoing voluntary liquidation process in accordance with Section 59 of the IBC which is a self-contained statutory provision for purposes of voluntary liquidation.
It is alleged that in the present case, when the Corporate Debtor had passed Board Resolution on 28.02.2025 and EGM Resolution on 17.03.2025 for removal of Respondent No.1 from the position of Liquidator of the Corporate Debtor, the Adjudicating Authority did not have the jurisdiction to interfere with the decision of the Directors and Shareholders of the Corporate Debtor for removing Respondent No.1 from the position of Liquidator. It was vehemently contended that the order of the Adjudicating Authority dated 28.03.2025 directing the parties to maintain status quo with respect to the Liquidator was erroneous and beyond the jurisdiction of the Adjudicating Authority in terms of the statutory framework of IBC.
Conclusion- Held the status quo order by forcing the Corporate Debtor to continue with Respondent No.1 as Liquidator amounts to stalling the voluntary liquidation process. When the Directors and Shareholders have lost their confidence in the Liquidator-Respondent No.1, and Board Resolutions had been passed to remove him, the Adjudicating Authority could not have restored the status quo without assigning strong, justifiable and cogent grounds.
