Order Admitting CIRP by NCLT Mumbai Against CD with Registered Office in Chandigarh was Set Aside: NCLAT

Case Details: Ankit Miglani v. State Bank of India - [2023] 151 taxmann.com 180 (NCLAT-New Delhi)

Judiciary and Counsel Details

• • Justice Ashok Bhushan, Chairperson & Barun Mitra, Technical Member
  • Gaurav Mitra, Ishan Roy Chowdhury, Ms Lavanya Pathak, Akshat Singh, Bhanu Gupta & Sanampreet Singh, Advs. for the Appellant.
  • Harshit Khare, Adv. for the Respondent.

Facts of the Case

In the instant case, the respondent bank filed a CIRP application u/s 7 against the corporate debtor before the Chandigarh Bench and the same was transferred to the Mumbai Bench, where a CIRP application was pending against the associate company of the corporate debtor.

Both the proceedings were completed before the Mumbai Bench by approving the resolution plan. The respondent bank then filed another application u/s 95 of the IBC against the corporate debtor, who acted as a personal guarantor of the associate company. The application was admitted.

Aggrieved by the admission of the section 95 application, the appellant (i.e. personal guarantor of the corporate debtor) filed an instant appeal, and contended that since the registered office of the corporate debtor was situated in the State of Haryana, an application filed u/s 95 before the Mumbai Bench was not maintainable and lacked territorial jurisdiction.

NCLAT Held

The NCLAT observed that as per section 60 of the IBC, the NCLT in relation to insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors shall be the NCLT having territorial jurisdiction over the place where the registered office of a corporate person is located.

In the instant case, the corporate person was the corporate debtor, whose registered office admittedly was in the State of Haryana. Further, section 60(2) includes an additional provision stating that if a CIRP or liquidation proceeding of a corporate debtor is pending before the NCLT, an application relating to the insolvency resolution process of a corporate guarantor or personal guarantor shall be filed before the same NCLT

The NCLAT held that the jurisdiction to entertain a CIRP application was only before the NCLT under whose jurisdiction the registered office of the corporate debtor was situated. In the instant case, the jurisdiction was with the NCLT Chandigarh, therefore, the instant appeal was to be allowed and the order passed by the NCLT, Mumbai Bench was to be set aside.

List of Cases Reviewed

• • State Bank of India v. Ankit Miglani [2023] 151 taxmann.com 179 (NCLT – Mum.) (para 12) reversed [See Annex].

List of Cases Referred to

• • State Bank of India v. Mahendra Kumar Jajodia [2022] 136 taxmann.com 371/171 SCL 232 (NCLAT – New Delhi) (para 7)
  • Mahendra Kumar Jajodia v. State Bank of India [2022] 139 taxmann.com 350/172 SCL 665 (SC) (para 8).