Initiation of Corporate Insolvency Resolution Process was maintainable against a company whose name had been struck off from the Register of the Companies under Section 248 of the Companies Act, 2013. The judgment passed by the NCLAT New Delhi (principle bench), in its decision in Mr. Hemang Phophalia vs The Greater Bombay Co-operative Bank Limited (Company Appeal (AT) (Insolvency) No. 765 of 2019) by Hon’ble Shri Justice A.I.S. Cheema and Justice S. J. Mukhopadhaya
The facts of the case was such that – The Respondent (Greater Bombay Co-employable Bank Limited) had documented an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 for starting CIRP against Penguine Umbrella Works Private Limited (‘Corporate Debtor’), claiming a default in reimbursement including revenue and different charges.
Ld .counsel showing up for the Appellant presented that name of the ‘Corporate Debtor’ was struck-off from the Register of the Companies under Section 248 of the Companies Act, 2013, in this way, the application under Section 7 against non-existent Company (‘Corporate Debtor’) isn’t viable.
Further, Appellant submitted that in view of the initiation of ‘corporate insolvency resolution process, now, the ‘resolution professional’ will ask the appellant, ex-director, and others to hand over the records and assets of the ‘corporate debtor’, which are not available. however, in absence of any such order passed by the ‘resolution professional’ or the adjudicating authority (NCLT), we are not inclined to decide such an issue.
Section 252(3), it will be clear that the Tribunal, by the request, before the expiry of a long time from the distribution in the Official Gazette of the Notice under sub-Section (5) of Section 248, on an application made by a leaser or laborer, may pass request and give such different headings and make such arrangements as considered only for putting the name of the Company and any remaining people similarly situated as almost as might be as though the name of the Company had not been struck off from the Register of Companies.
Thusly, if an application is recorded by the creditor before the expiry of a long time from the distribution in the Official Gazette of the Notice under subsection (5) of Section 248, it is available to the Adjudicating Authority to give such headings and make such arrangements as considered only for putting the name of the Company and any remaining people similarly situated almost as might be as though the name of the Company had not been struck off from the Register of Companies.
The name of the ‘Corporate Debtor’ (Company) may be struck off, but the assets may continue. Whether in the present case, there are assets of the ‘Corporate Debtor’ or not can be looked into only by the ‘Resolution Professional’
Adjudicating Authority who is additionally the Tribunal is enabled to re-establish the name of the Company and any remaining people in their separate situation with the end goal of inception of ‘Corporate Insolvency Resolution Process’ under Sections 7 and 9 of the I&B Code dependent on the application whenever documented by the Creditor or labourer inside a long time from the date the name of the Company is struck off under sub-area (5) of Section 248. In the current case, an application under Section 7 had conceded, the ‘Corporate Debtor’ and its Directors, Officers, and so forth considered to have been re-established as far as Section 252(3) of the Companies Act.
