The National Company Law Appellate Tribunal (“NCLAT”), in the case Subrata Maity v Mr. Amit C. Poddar & Ors, the principal bench comprising of Justice Ashok Bhushan (Chairperson), Technical Member, Dr. Alok Srivastava and the Technical Member, Mr. Barun Mitra, the bench while adjudicating an appeal observed and has held that the Adjudicating Authority can invoke its inherent powers to replace the Liquidator and to do substantial justice.
Background of the Case
The Appellant, Mr. Subrata Maity was the Liquidator of the Corporate Debtor, Seam Industries Ltd. Vide order dated 22.09.2022, the Adjudicating Authority had replaced the Appellant with another Liquidator namely Mr. Amit C. Poddar. It has been noted by the Adjudicating Authority that the Appellant was arrested by CBI, due to which 116 days were lost due the Appellant’s incapability for acting as a Liquidator.
However, the Appellant being the erstwhile Liquidator, challenging the Order dated 22.09.2022 before the Adjudicating Authority. It had been contended by the appellant that no notice has been issued to him and was not even served the copy of the Application filed by the Stakeholders Consultation Committee wherein seeking appointment of Mr. Amit C. Poddar. Further, the Appellant was granted bail when he was immediately arrested.
NCLAT Decision
The bench observed that as criminal prosecution is going on against the Appellant and the Appellant was arrested by the CBI, it was not err by the Adjudicating Authority in replacing the Appellant with another Liquidator. However, no personal right has been provided to the liquidator to continue in the Liquidation Process. In the impugned order, the reasons noted are sufficient to exercise even the inherent power by NCLT to replace the Liquidator. Thus, the present case is not being a fit case to interfere in exercise of our Appellate Jurisdiction.
The Learned Counsel appearing for the Appellant contended before the bench that there is no provision in law for replacement of Liquidator by the Adjudicating Authority. However, the present case is a case where inherent power can be exercised by the Adjudicating Authority for doing substantial justice.
Accordingly, it was held by the bench that the Adjudicating Authority has an inherent power for replacing the Liquidator. The bench dismissed the appeal.
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