Applicant-Bank can’t file intervene plea before NCLAT if it isn’t a party to proceedings before NCLT: NCLAT

Case details: State Bank of India v. Limtex Tea & Industries Ltd. - [2021] 128 taxmann.com 326 (NCLAT- New Delhi)

Judiciary and Counsel Details

• • Anant Bijay Singh | Judicial Member and Ms. Shreesha Merla | Technical Member.
  • Abhijeet Sinha, CS, Suhita Mukhopadhyay, Avirup Chaterjee and Saikat Sarkar, Advs. for the Appellant.
  • Shantanu Parashar and Abhishek Sharma, Advs. for the Respondent.

Facts of the Case

The Application under section 7 of the Insolvency and Bankruptcy Code, 2016 was filed by the financial creditor against the corporate debtor. However, the NCLT by order dismissed the application and released the corporate debtor from the rigour of ‘Corporate Insolvency Resolution Process (CIRP) and directed Interim Resolution Professional/Resolution Professional to hand over records and assets of the ‘corporate debtor’ to the director of ‘corporate debtor’ immediately.

Thereafter, the Applicant bank submitted that during ongoing CIRP, defaults had been committed by corporate debtor in repayment of financial facilities availed from applicant bank, thus it had taken symbolic possession of land leased to the appellant.

Since the said land did not fall under the category of ‘assets of corporate debtor’ and the same be returned to applicant bank and not to the corporate debtor.

NCLAT Held

However, the NCLAT found that the applicant was not a party in proceedings before Tribunal and had the first time brought these new facts before Appellate Tribunal through intervention application, which could not be permitted, therefore, an instant application was to be dismissed as not maintainable.

Case Review

• • Limtex Tea & Industries Ltd. v. Shri Bihariji Cold Rollers (P.) Ltd. [2021] 128 taxmann.com 325 (NCLT – Kol.) affirmed