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2020 (9) TMI 385 - AT - Insolvency and BankruptcyLiquidation of Corporate Debtor - Reduction of share capital - specific case of the Appellant(s) is that they have duly complied with the conditions to be followed by them, as per order dated 15.05.2019, but the direction in the said order of the vesting of the ownership, control and management of the affairs of the ‘Corporate Debtor’ was never complied with the 1st Respondent thereby depriving the Appellant(s) from the vesting its control and management upon the ‘Corporate Debtor’ for its implementation of the ‘Resolution Plan’. HELD THAT:- In the instant case, the 1st Appellant / ‘Resolution Applicant’ had deposited ₹ 15 crores in the ‘Escrow account’ was permitted as per order of this Tribunal on 29.07.2020 and further this Tribunal had directed that the said amount so deposited in ‘Escrow Account’ shall not be appropriated without prior approval of this Tribunal. Also, that the 1st Appellant / ‘Resolution Applicant’ had averred in the Affidavit in compliance of order dated 18.08.2020 at paragraph 7 that it is agreeable for forfeiture of an amount of ₹ 15 crores in addition to the already forfeited amount of ₹ 5 crores, in case it fails to deposit an amount of ₹ 50 crores within the three months period, from the date of reversal of the liquidation order. A perusal of Section 29A clause of the ‘I&B’ Code (i) indicates that it disqualifies a person if he has been subject to any of disabilities stated in clauses (a) to (h) of Section 29A in any jurisdiction outside India. In reality, Section 29A (i) will have to be read as a disability which corresponds to Section 29A(f) in view of the antecedent conduct on the part of a person applying as a ‘Resolution Applicant’ in a jurisdiction outside India - Section 29A(f) and (i) of ‘I&B’ Code speaks of persons prohibited by foreign securities market regulator. It is seen from Section 29A(f) of the Code that if any of the individuals mentioned therein is prohibited by SEBI from either trading in securities are accessing the securities market, again ineligibility of an individual furnishing the plan attaches. In fact, as per sub- clause (i) if a person situate abroad is subject to any disability which correspond to sub-clause (a) of the code such person also is forbidden. Therefore, if a person is prohibited by a Regulator of the Securities market in a foreign market of trading in security and accessing the security market the then disability as per sub-clause (i) of section 29A would get attracted. This Tribunal, taking note of the entire conspectus of the attendant facts and circumstances of the instant case in an encircling manner and also keeping in mind of the plea taken on behalf of the liquidator that the ‘Resolution Applicant(s)’ cash flow mentioned in the failed ‘Resolution Plan’ is squarely dependent upon the ‘sale of assets’ and hence it is ‘subjective in character’, this Tribunal, bearing in mind that the 1st Appellant / ‘Resolution Applicant’ is only said to be holding 12% equity in ‘Kridhan Infra Limited’ etc. and added further in view of the specific plea taken by the Liquidator that the ‘Resolution Applicant’ through its subsidiaries had defaulted to Union Bank of India, Hongkong Branch to an extent of INR 750 crores approx. and hence, ineligible u/s 29A of the ‘I&B’ Code - Appeal dismissed.
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