The NCLAT held that the Erstwhile Liquidator (Petitioner) has no Locus Standi to file a Review Application, and does not possess any inherent rights to contest the matter in their personal capacity.
The National Company Law Appellate Tribunal (NCLAT), Chennai Bench comprising Justices M. Venugopal and Sharad Kumar Sharma (Judicial Members) and Jatindranath Swain (Technical Member) was hearing an appeal and observed that the Erstwhile Liquidator (Petitioner) has no Locus Standi to file a Review Application. The NCLAT noted that the Erstwhile Liquidator has `No Vested Right’, to agitate and contest the matter in his `personal capacity’
In this case, the National Company Law Appellate Tribunal (NCLAT) was approached by the erstwhile liquidator of M/s. The Jeypore Sugar Co. Ltd. through a Review Petition (No. 3/2024) challenging an order issued on 05.01.2024 in Comp. App (AT) (CH) (INS) No. 8/2022. The petitioner raised serious allegations against the new liquidator, accusing them of suppressing issues of fraud, cheating, and obstruction of the liquidation process. They also argued that the Tribunal's failure to hear them violated principles of natural justice.
On the other hand, the respondents, representing secured creditors, argued that the review application was not maintainable since the petitioner was no longer the liquidator. They contended that the new liquidator had the authority to withdraw the appeal, which was properly exercised. Additionally, they emphasized that the petitioner lacked the standing to challenge the order.
After careful consideration, the Appellate Tribunal dismissed the review petition, affirming the validity of the order issued on 05.01.2024. The NCLAT upheld the withdrawal of the appeal by the new liquidator, stating that the petitioner no longer held the authority to contest the matter in a personal capacity. The NCLAT observed that the Erstwhile Liquidator (Petitioner) has no Locus Standi to file a Review Application, and does not possess any inherent rights to contest the matter in their personal capacity.
The Appellate Tribunal highlighted the legal principles surrounding the power of recall and review of judgments, emphasizing the authority of the new liquidator to make decisions regarding legal proceedings on behalf of the corporate debtor.
In essence, the Appellate Tribunal's decision upheld the actions taken by the new liquidator and deemed the review application not maintainable. The dismissal of the review petition marked the conclusion of the legal dispute regarding the withdrawal of the appeal and affirmed the authority of the new liquidator in representing the interests of the corporate debtor.