IMPORTANT POINT
The Registrar of NCLT performs a ministerial function when receiving petitions under Section 95 of the Insolvency Code, without adjudicating on their merits.

JUDGMENT :

N.V. Anjaria, C.J.

Whether the aspect about the maintainability of petition filed under Section 95 of the Insolvency and Bankruptcy Code, 2016 for its merit content could be examined by the Registrar of the National Company Law Tribunal at the stage of its filing and presentation;

Whether it is permissible in law for the Registrar of the National Company Law Tribunal (NCLT) to enter into even the elementary adjudicatory process in relation to controversy between the parties;

Whether receiving and registering the petition under Section 95 of the Insolvency Code is a ministerial function or also permits an adjudicatory act at that stage by the Registrar, NCLT;

At what stage the adjudicatory functions starts under the provisions of Chapter-III, Part-III of the Insolvency and Bankruptcy Code, 2016;

1.1 These are the questions arise for their analysis and decision while examining the challenge to the judgment and order dated 6th March 2024 of learned Single Judge, in the present appeal, preferred by the appellant-original respondent No.2, under Section 4 of the Karnataka High Court Act, 1961.

The Challenge

2. Learned Single Judge allowed the writ petition. It was declared that e-filing of the petition by the appellant herein under Section 95 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the ‘Insolvency Code’) to be non est and illegal, consequently setting aside all the connected proceedings. It was provided that any action taken upon registration of the proceedings shall stand obliterated.

2.1 In the writ petition filed under Article 226 of the Constitution, the prayers made were to declare that the e-filing of petition No.2903111/01786/2023 by the appellant-respondent No.2 under Section 95 of the Insolvency Code was void ab initio and illegal. It was consequently prayed to restrict the NCLT from taking any action in furtherance of the said petition.

2.2 The NCLT was further sought to be restrained from completing the scrutiny of the petition and returning the petition for rectifying the defects and also to restrict from numbering and registering the petition or placing the petition for hearing. The third limb of the prayer was to direct the NCLT to return and cancel the lodging of the petition.

Case in the Writ Petition

3. Having seen the kind and nature of the prayers advanced as above in the writ petition, the case of the petitioner No.1 herein-M/s. Manyata Reallty may be looked into. Questioning the legality of filing of petition under Section 95 of the Insolvency Code by the appellant herein-Boyount Technology Constellation Pvt. Ltd., it was stated that the petitioner was a partnership firm registered under the Partnership Act, 1932 and that the petition under Section 95 of the Code against it was not maintainable.

3.1 It was stated that the petitioner with other entities, all are engaged in the business of real estate development. One of such entity is Manyata Infrastructure Developments Pvt. Ltd., which is a private limited company. The partners of the petitioner have interest in the said private limited company, it was stated. The said Manyata Infrastructure Pvt. Ltd. and the petitioner, it was averred, have been instrumental in developing several projects as a leader in the field of construction. It was stated that, the petitioner along with the land owners of certain properties entered into Memorandum of Understanding dated 23rd December 2009 and Addendum dated 20th July 2012 with respondent No.2-appellant herein-Buyont Technology.

3.1.1 In light of the said Memorandum of Understanding, the petitioner firm Manyata Pvt. Ltd. and appellant have entered into separate joint developmental agreements between the years 2010 and 2015. It was further stated that the joint development agreements covering in total 103 Acres of land. The petitioner produced one of such agreement dated 26th August 2010.

3.1.2 It was alleged by the petitioner that the appellant did not commence the development works, delayed the