Mr. Kurapati Singarayya Choudary Vs. Apex Aqua Agencies Private Limited
I.A.No.61 of 2022
Facts:
Former Resolution Professional (RP) has filed this application with a prayer to issue direction to Respondents to pay CIRP costs incurred by the Applicant to an extent of Rs.6,39,130/- till the date of setting aside the order dated 25.11.2021 in CP (IB) No.52/9/AMR/2021.
Issue: Whether a corporate debtor is liable to pay CIRP cost if the CIRP order is set aside?
Arguments:
For Respondents:
Counsel for the respondent CD countered by contending that the CIRP costs cannot be imposed on the Respondent No.1/Corporate Debtor, since, the notice which was allegedly served on the Corporate Debtor was held to have not been properly served, by virtue of the order of Tribunal dated 14.03.2022 which is passed in Application filed seeking to set aside the ex-parte order.
It relies on the judgment of the Hon’ble Supreme Court in Civil Appeal No. 4044 of 2020 between Rajkumar Brothers and Production Private Limited Vs. Harish Amilineni Shareholder and erstwhile Director of Amilionn Technologies Private Limited & Another, wherein, in similar circumstances, the Supreme Court held that the Operational Creditor therein would be liable for CIRP costs and that the Corporate Debtor cannot be saddled with the costs of CIRP.
Decision: Hon’ble NCLT held that CIRP cannot be imposed upon the corporate debtor even if the CIRP order has been set aside.
Rationale:
It relied on the judgment of the supreme court as quoted by the respondent in the matter of Rajkumar Brothers and Production Private Limited Vs. Harish Amilineni Shareholder and erstwhile Director of Amilionn Technologies Private Limited & Another and held that CIRP cannot be imposed upon the corporate debtor.
