Parties other than those who triggered CIRP cannot be creditors


Status as on- 25/08/2022 

The National Company Law Appellate Tribunal, on 12.08.2022, in the matter of V. Venkata Sivakumar vs IDBI Bank Ltd. has held that there is no such provision to implead creditors other than the ones which triggered the Corporate Insolvency Resolution Process.

Background Fact:

The Corporate Insolvency Resolution Process was initiated against Jeypore Sugar Company Ltd. vide its order dated 2.03.2022 by National Company Law Tribunal, Chennai. On receiving of no resolution plans, Mr. V. Venkata Sivakumar was appointed as liquidator in the said matter. Thereafter, an application was moved before the Adjudicating Authority for seeking police protection in taking over the assets of the Corporate Debtor. Subsequently, the Adjudicating Authority vide its order dated 02.03.2022 had provided police protection for the protection of the assets of the Corporate Debtor, to take over the custody of the School and the Petrol Pump, and various other things. Consequently, the School and the Petrol Pump filed an appeal challenging the said order before the National Company Law Appellate Tribunal, Chennai. Thereafter, the Adjudicating Authority directed the Liquidator not to deal with any assets of the Corporate Debtor, till the disposal of the said application. Ultimately, the concerned liquidator was replaced by S. Hari Karthik on 01.07.2022. The erstwhile liquidator i.e., V. Venkata Sivakumar had challenged the order dated 01.07.2022. The Applicants have also filed an impleadment application in the said matter.

The issue raised before the NCLAT, Chennai was, is there any provision to implead other creditors than those who have triggered Section 7 application for the initiation of the CIRP?


The Tribunal held that a mere interest of a party in the fruits of the litigation cannot be a test for impleading him as a party. It was further observed that the Applicants are not a necessary party or proper parties to be arrayed as Respondents in the concerned appeal. Hence, the Application for the impleadment was dismissed.

Disclaimer: The above article is based on the personal interpretation of the related orders and laws. The readers are expected to take expert opinions before relying upon the article. For more information, please contact us at


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