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Resolution Professionals are entitled to file suit against creditors with consent of NCLT: HC

January 23, 2019[2019] 101 329 (Madras)

IBC : Resolution Professional can file suit against financial/operational creditor with permission of NCLT

• Where plaintiff-shareholders of defendant company against which moratorium was declared under section 14 had filed a suit in UK Court against decree made by UK Court on proceedings initiated by financial creditor bank, it was held that Resolution Professional is enabled under section 25 to act on behalf of corporate debtor against any one. When such an action on behalf of Corporate Debtor runs into the interest of the financial creditor, it necessarily is an issue which has to be looked into, dealt with and decided by NCLT by applying the IB Code. The question as to whether RP should file a suit assailing the foreign decree has to be examined and answered by NCLT as it was against the financial creditors in the instant case. Once NCLT comes to the conclusion that such a suit has to be filed by RP, the scenario shifts to the Commercial Division (UK Court) without being hit by Section 63. NCLT will not have to decide about actions of RP in cases where the suit is not against the financial or operational creditor. If ultimately RP assails the UK Judgment in the Commercial Division, there would be no difficulty in such suit being fast-tracked by applying the amended CPC procedure as amended by 'The Commercial Courts Act, 2015'.Thus, instant suit was held to be not maintainable, but reserving the rights of corporate debtor (second defendant) to approach NCLT under Section 60(5) and further reserving the right of Resolution Professional to file a suit on the same ground with regard to the same issue if the NCLT permitted the Resolution Professional to do so.

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