Mr. Rahul Gupta &Anr vs Mr Chandra Prakash - (NATIONAL COMPANY LAW APPELLATE TRIBUNAL) (19 Oct 2023)

In order to initiate prosecution under Section 70 of the IBC, the complaint has to be filed by the IBBI or Central Government or person authorized by Central Government

MANU/NL/0860/2023

Insolvency

The instant appeal has been preferred against order passed by the National Company Law Tribunal, thereby, allowing the Application under Section 19(2) read with Section 19(3) of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 11 of the NCLT Rules, 2016. The Adjudicating Authority imposed a cost of Rs. 10,00,000 each on the Appellants under Section 70 of the IBC.

In decision of this Appellate Tribunal in the matter of Vikram Puri v. Universal Buidwell (P.) Ltd., Appellate Tribunal has observed that the prosecution under Section 70 of the Code is a separate and independent proceedings, which in no manner fetter power upon the Tribunal to invoke the Section 70 of the IBC.

In the matter of Sapan Mohan Garg, Resolution Professional of Sort India Enviro Solution Ltd. v. Manish G Patel &Anr. it has been held that in order to initiate prosecution under Section 70 of the IBC, the complaint has to be filed by the Insolvency and Bankruptcy Board of India (IBBI) or Central Government or person authorized by the Central Government.

Based on above detailed analysis, present Tribunal is unable to sustain the Impugned Order. The Impugned Order is set aside and matter remanded back to the National Company Law Tribunal, to have a fresh look of the case and decide in accordance with the law and pass suitable order. Appeal allowed.

Tags : PROSECUTION COST IMPOSITION