Ashok B. Jiwrajka, Director of Alok Infrastructure Ltd. v. Axis Bank Ltd. (Company Appeal (AT)(Insolvency) No. 683 of 2018) - Synopsis
Team SoOLEGAL 26 Nov 2020

In this case, Ashok B. Jiwrajka, Director of Alok Infrastructure Ltd. v. Axis Bank Ltd. (Company Appeal (AT)(Insolvency) No. 683 of 2018) CIRP was launched against Alok Industries Ltd. (Holding Company). Subsequently, following a separate complaint submitted by the financial creditor against Alok Infrastructure Ltd. (Subsidiary of Alok Industries Ltd.), Alok Infrastructure Ltd. was admitted to CIRP by order dated 24 October 2018, passed by the NCLT, Bench of Mumbai. The Appellant, being the director of the Subsidiary Corporation, that is Alok Infrastructure Ltd. lodged an appeal against the said order of the Mumbai NCLT. It was pleaded by a Senior Lawyer, on behalf of the Appellant, that the CIRP against the Subsidiary Firm should not proceed until the judgement of the CIRP under Section 31 of the Insolvency and Bankruptcy Code, 2016 has been taken by the Holding Company. In addition, it was submitted on behalf of the appellant that the settlement proposal had been submitted to the NCLT, Mumbai, for the Holding Firm as of July 2018. However, the said action has not yet been made by the NCLT.
The Hon'ble NCLAT held that the appellant's submission could not be admitted, as a separate CIRP had been filed against the Corporate Debtor, i.e. the Subsidiary Entity in this case, and the same was completely separate from the CIRP brought against Alok Industries Ltd., i.e. the Holding Company. NCLAT also directed the Ld. NCLT shall, ideally within three weeks, reach a decision on the authorised CIRP for the Holding Firm. However, the Hon'ble NCLAT noted that it is clear that the process of corporate insolvency resolution initiated against 'Alok Infrastructure Ltd.' has not been stopped and that the Resolution Specialist, the Creditors' Committee, and the Adjudicating Authority will continue to do so in compliance with the law within the period stipulated in the law." The Appeal was therefore rejected by the NCLAT.

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