V.P. Singh JUDGMENT
V.P. Singh, Member (T)
1. This appeal emanates from the Order dated 13 December 2019 passed by the Adjudicating Authority in Company Petition (IB) No. 252/NCLT/AHM/2019, whereby the Application filed by Appellant under Section 9 of the I & B Code 2016 was rejected on the ground of maintainability for want of proper Authorisation, which is of the year 2013 when I & B Code 2016 was not in existence. The parties are represented by their original status in the Company Petition for the sake of convenience.
Appellants Contention;
2. The Applicant/Appellant filed an Application under Section 9 of the I & B Code 2016 (in short 'code'), which was dismissed on the ground that the Authorisation annexed with the application was of the year 2013, i.e. before the Insolvency & Bankruptcy Code, 2016 came into force.
3. It is contended that there is no specific provision neither in the Code nor under the Rules and Regulations made thereunder, which mandates authorisation post-enactment of the Insolvency & Bankruptcy Code 2016. Instead of deciding the Section 9 Application on merit, the Learned Adjudicating Authority rejected the application as not maintainable for want of proper Authorisation, which happens to be of 2013 when the I & B Code was not in existence.
4. The Appellant contends that the Adjudicating Authority should have granted the liberty to rectify the defects if any. However, the Learned Adjudicating Authority failed to provide an opportunity of being heard to the Appellant either on account of principles of natural justice or account of non-compliance of the proviso to Section 9(5)(ii)(a) of the Code.
Respondent's Contention
5. The Respondent/Corporate Debtor contends that the Application filed by the Operational Creditor under Section 9 of the Code is based on a Board Resolution passed by the Appellant Company in the year 2013, which limits itself to recovery proceedings on behalf of the Appellant. The Authorisation contemplated under the Insolvency and Bankruptcy Code could only be of the post-enactment of the Code.
6. It is stated that the Appellant was not at all entitled to be granted seven days under the proviso to Section 9(5)(ii)(a) of the Code to rectify the defects in the Application concerning the issue of Authorisation. The proper and specific Authorisation forms the basis of entire proceedings under the Code. Since Authorisation goes to the root of the matter, the same cannot be treated as a 'curable defect' that can be rectified within seven days. An incomplete or improper authorisation vitiates the entire proceedings at the inception itself. The period provided under the proviso to Section 9(5)(ii) for curing a defect is only concerning the sufficient details of the Company and about mistakes in the Application filed under Section 9 of the Code. An invalid authorisation vitiates the very foundation of Application and cannot be cured in Section 9(5)(ii) of the Code.
Discussions and Finding:
7. The present Appeal arises out of the Order dated 13 December 2019........