INSOLVENCY AND BANKRUPTCY CODE, 2016

Section 7 read with Section 33 Section 2(94A)

Initiation of corporate insolvency process by financial creditor - Alleged default in repayment of loan by corporate debtor - Name of corporate debtor being struck off from Register of Companies (ROC) - Maintainability of application against non-existing company

An application under section 7 for initiating 'Corporate Insolvency Resolution Process' against 'corporate debtor' alleging default in repayment of loan including interest and other charges. NCLT admitted said application. Ex-director and shareholder of 'corporate debtor', filed appeal contending that name of 'corporate debtor' was already struck off from ROC. Therefore, according to appellant, application under section 7 was not maintainable against non-existent company, i.e., corporate debtor. Held: As per amended Clause (94-A) of section 2 of Companies Act, 2013 'winding up' means 'winding up under this Act or liquidation under Insolvency and Bankruptcy Code, 2016, as applicable'. Therefore, it was clear that company, whose name has been removed from Register of Companies can be liquidated under Insolvency and Bankruptcy Code, 2016. Name of Company having been struck off, corporate person cannot file an application under section 59 for voluntary liquidation. Thus, in view of provisions of section 250(3) read with sections 248(7) and (8), application under sections 7 and 9 will be maintainable against 'Corporate Debtor', even if name of a 'Corporate Debtor' was struck off from Registrar of Companies.

Affirmed: Greater Bombay Co-operative Bank Limited v. Penguine Umbrella Works Private Limited [CP 1661 (IB)/MB/2017, dt. 12-6-2019]

REFERRED :

FAVOUR : Against the appellant

A.Y. :

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