Whether POA Holder can file Application under I & B Code, 2016


Whether POA Holder can file Application under I & B Code, 2016

Short Summary:
In this flash tabloid, the writer initiates by speak of the provisions of Insolvency & Bankruptcy Code, 2016 (hereafter referred as “I&B Code”) in relation to Overriding effect of I&B Code, 2016 over Power of Attorney Act, 1882.
The main drive of the broadsheet, on the other hand, is upon the “Whether Application u/s 9 can be sign by the Power of Attorney Holder”
This is article no. 294 of the series of editorials written by the author on corporate laws
{Including Companies Act, 2013, SEBI, RBI Regulations, IBC, LLP Act, 2008 etc.}.

In this editorial author discuss the provisions over riding effect of I&B Code, 2016 on Power of Attorney Act, 1882 and landmark judgement delivered by NCLAT, in case Steam Shriram EPC Limited Vs. Rio Glass Solar SA  & T Shivaraman V/s Rio Glass Solar SA   & Anr.
Case element:
Case Name
Shriram EPC Limited Vs. Rio Glass Solar SA
Operational Creditor
Rio Glass Solar SA
Corporate Debtor
Shriram EPC Limited
Bench Name
The National Company Law Appellate Tribunal (NCLAT)
Link:
http://ibbi.gov.in/webadmin/pdf/order/2017/Nov/2nd%20Nov%202017%20in%20the%20matter%20of%20Shriram%20EPC%20Limited%20Vs.%20Rio%20Solar%20SA%20Company%20Appeal%20(AT)%20(Insolvency)%20Nos.%20133,197%20of%202017_2017-11-03%2012:11:37.pdf
Order Pronounced on
2nd November, 2017



A.  Factual Background:

§  Appellant: the application under Section 9 in Form-5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as ‘Adjudicating Authority Rules’) has not been signed by the ‘Operational Creditor’, but by the “Power of Attorney holder.

§  The question whether a ‘Power of Attorney holder’ can file an application for initiation of ‘Corporate Insolvency Resolution Process’ fell for consideration before this Appellate Tribunal in “Palogix Infrastructure Limited Vs. ICICI Bank Limited”-Company Appeal (AT) (Insol.) No. 30 of 2017.


B.  Finding of Hon’ble Supreme Court:
Hon’ble NCLAT states that,
The 'I&B Code' is a complete Code by itself. The provision of the Power of Attorney Act, 1882 cannot override the specific provision of a statute which requires that a particular act should be done by a person in the manner as prescribed thereunder.

Therefore, we hold that a 'Power of Attorney Holder' is not competent to file an application on behalf of a 'Financial Creditor' or 'Operational Creditor' or 'Corporate Applicant'.”

Thus application under Section 9 preferred by the Respondent- ‘Operational Creditor’ was not maintainable.

Conclusion:
It can be opine that Power of Attorney Holder is not competent to file and application on behalf of FC or OC or CD.

(Author – CS Divesh Goyal, GOYAL DIVESH & ASSOCIATES Company Secretary in Practice from Delhi and can be contacted at csdiveshgoyal@gmail.com).

 Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, I assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. I assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL I SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION.



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