Hemang Phophalia Vs. The Greater Bombay Co-operative Bank Limited & Penguin Umbrella Works Private Limited. [Company Appeal (AT) (Insolvency) No. 765 of 2019] - Synopsis
Team SoOLEGAL 18 Dec 2020
In this case, Hemang Phophalia Vs. The Greater Bombay Co-operative Bank Limited & Penguin Umbrella Works Private Limited. [Company Appeal (AT) (Insolvency) No. 765 of 2019], Greater Bombay Co-operative Bank Limited before NCLT Mumbai Bench has launched a corporate insolvency resolution process against Penguin Umbrella Works Private Limited, alleging a default in repayment. The application was approved by the NCLT. However, the name of the Corporate Debtor was excluded from the register of companies at the time of the submission of the claim for insolvency proceedings. Mr Hemang Phophalia, ex-director and creditor of the Corporate Debtor, the appellant in this particular case, favoured an appeal before the National Company Law Appellant Tribunal. The question before the NCLAT was if the application authorising to initiate insolvency process can be retained against a corporate debtor corporation whose name had been cancelled by the Registrar of Companies. The NCLAT relied on the applicable provisions of the Companies Act, 2013 and held that the order by the Financial Creditor to initiate Corporate Insolvency Resolution Process against the Corporate Debtor, whose name has been cancelled by the ROC, is applicable.
The Bench also held that the NCLT was empowered to restore the name of the Corporate Debtor and of all other persons for the purpose of initiating the CIRP through either the financial creditor or the operating creditor. After the appeal has been approved, the Corporate Debtor, its directors, officers shall be considered to have been reinstated.

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