# In the matter of Pramod Kumar Sharma Vs. Manesh Agarwal & Ors. Company Appeal (AT) (Insolvency) No. 08 of 2022

> NCLAT judgment dated 2022-04-04. Citation: TCN-2022-NCLAT-00558. The appeal was filed against the order dated November 9, 2021, passed in I.A. No. 201 of…

- **Court:** NCLAT
- **Order date:** 4 Apr 2022
- **Citation:** TCN-2022-NCLAT-00558
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/pramod-kumar-sharma-vs-manesh-agarwal-ors-company-appeal-ab010749

## Summary

### Background

The appeal was filed against the order dated November 9, 2021, passed in I.A. No. 201 of 2020. The appellant filed I.A. No. 201 of 2020 seeking recovery of the amount withdrawn by the suspended directors in violation of Section 14 of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority observed that the Insolvency and Bankruptcy Board of India (IBBI) was made a party as Respondent No. 3, even though there was no need for the Resolution Professional to implead IBBI. The Adjudicating Authority dropped 'IBBI' from the array of parties and directed the appellant to pay Rs. 25,000 for unnecessarily making the 'IBBI' a party to the proceeding.

## Facts

The appellant filed an application (I.A. No. 201 of 2020) seeking recovery of an amount withdrawn by suspended directors, alleging a violation of Section 14 of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority observed that the Insolvency and Bankruptcy Board of India (IBBI) was unnecessarily made a party (Respondent No. 3) by the Resolution Professional. Consequently, the Adjudicating Authority removed IBBI from the list of parties and imposed a cost of Rs. 25,000 on the appellant for including IBBI. The appellant then filed an appeal against the order imposing the cost. The key fact is the imposition of costs on the appellant for including IBBI as a party, which the Adjudicating Authority deemed unnecessary.

## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was justified in imposing costs of Rs. 25,000 on the Appellant …

**Ratio:** The imposition of costs should be based on sound reasoning and necessity. If a party is

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**Reasoning:** The appellate tribunal reasoned that since the Adjudicating Authority had already dropped

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**Interpretation:** The interpretation is that while the Adjudicating Authority has the power to

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**Application:** In this case, the appellate tribunal applied the principle that the imposition

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## Parties

- **Judges:** Ashok Bh…; Alok Sriv…; +1 more
- **Appellants:** Pramod Kumar…
- **Respondents:** Manesh Ag…

## Timeline

- **2021-11-09 — Order by Adjudicating…**: The Adjudicating Authority passed an order in I.A. No. 201 of 2020, dropping IBBI from…
- **2022-04-04 — Hearing of th…**: Learned Counsel for the Appellant and…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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