Appeal Against Deferred Intervention Application In Insolvency Case Not Maintainable: NCLAT Chennai

The Chennai Bench of the National Company Law Appellate Tribunal (NCLAT) on 15 June held that an appeal under Section 61(1) of the Insolvency and Bankruptcy Code, 2016 cannot be filed against an order that only defers an intervention application for consideration along with a revised resolution plan after reconsideration by the Committee of Creditors (CoC).

Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain dismissed the appeal filed by AYRA Consortium, a prospective resolution applicant, against the order of the National Company Law Tribunal (NCLT) deferring its intervention application. The Bench observed:

“the Appellant happens to be a Resolution Applicant and as such he at this juncture when the plan was directed to be reconsidered by way of revision by the CoC, the Appellant may not become the necessary party who could have been considered at all by the CoC and hence no orders could have been passed at this stage by this Appellate Tribunal”.

The matter arose during proceedings concerning approval of the resolution plan submitted for Amar Prakaash Developers Private Limited. The Adjudicating Authority had pointed out deficiencies in the resolution plan and remitted it to the CoC for reconsideration. It directed the CoC to deliberate on the issues and submit a fresh decision.

Subsequently, AYRA Consortium filed an intervention application before the NCLT seeking permission to participate in the resolution plan approval proceedings. It sought rejection of the non-compliant resolution plan and its remand to the CoC. The NCLT, however, deferred consideration of the intervention application and directed that it would be considered along with the resolution plan after the CoC submitted its reconsidered plan. AYRA Consortium challenged this deferment before the NCLAT.

The NCLAT noted that the impugned order contained two separate directions. The first direction remitted the resolution plan to the CoC for reconsideration, while the second deferred the intervention application until the revised resolution plan was placed before the NCLT. The Bench observed that the appellant had not challenged the direction requiring reconsideration of the resolution plan and had only challenged the deferment of its intervention application. It held that since the intervention application had not been decided either in favour of or against the appellant, no right of the appellant had been affected.

It further noted that the substantive reliefs sought by AYRA Consortium, including rejection of the resolution plan, were contingent upon it first being permitted to intervene in the proceedings. The Tribunal held that no cause of action had yet crystallised and ruled that the appeal under Section 61 of the Insolvency and Bankruptcy Code was premature and not maintainable.

Accordingly the NCLAT dismissed the appeal.

For Appellant: Mr Bilal Ali, Advocate

For Respondent: Mr. Raghav Menon, Advocate