Financial Creditor’s Director Was Competent to File CIRP Plea Even If He Was a Director in a Struck Off Company | NCLT

Case Details: Airwil JKM Infrastructure (P.) Ltd. v. Cadillac Infotech (P.) Ltd. - [2024] 169 taxmann.com 159 (NCLT-New Delhi)

Judiciary and Counsel Details

• Mahendra Khandelwal, Judicial Member & Rahul Bhatnagar, Technical Member
• Gaurav Mitra, Abhinav Mukhi & Shantanu Tomar, Advs. for the Applicant.
• Sajeve Deora, Ms Bani Dikshit, Aditya Puri & Uddhav Khanna, Advs. for the Respondent.

Facts of the Case

In the instant case, the petitioner-financial creditor filed an application to initiate the CIRP against the corporate debtor. The corporate debtor filed an instant application seeking dismissal of the CIRP application on account of the lack of authority of the authorized signatory of the financial creditor, i.e. ‘V’, to sign and verify the application.

According to the corporate debtor, ‘V’ was the director of the financial creditor as well as of its sister concern ‘Airwil’. The name of ‘Airwill’ was struck off from the register of companies, and ‘V’ was disqualified under section 164(2) of the Companies Act, 2013 to act as director in ‘Airwill’, and the said disqualification would render office of ‘V’ vacant in all companies, other than defaulting company, as per proviso to Section 167(1)(a) of the Act.

It was noted that disqualification referred under Section 164(2) of the Act shall come into force only when the company of which he is a director has failed to file financial statements or annual returns for a continuous period of three years.

However, in the instant case, striking off of ‘Airwil’ was not for non-filing of financial statements or Annual returns but rather for not carrying on business or operations for a period of two immediately preceding financial years and for not obtaining the status of a dormant company.

NCLT Held

The NCLT held that the provisions contained under section 167(1)(a) of the Act would not be applicable in the instant case, and hence, disqualification referred to under Section 164(2) of the Act would not extend to ‘Airwil’. In view of the aforesaid, the instant application was to be dismissed.

List of Cases Reviewed

• Mukut Pathak v. Union of India [W.P.(C) 9088/2018 & CM Appln. No. 35006/2018] decided on 04.11.2019, (para 9) followed.