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2021 (11) TMI 24 - AT - Insolvency and BankruptcyLiquidation of Corporate Debtor - Section 33 of IBC - Validity of Board Resolution passed without securing affirmative vote of the nominee director of the Appellant No. 3 - appeal against the order of admission is barred by limitation or not - material irregularity committed by RP in conducting the CIRP of the Corporate Debtor. Whether the board resolution dated 30.03.2017 is void ab-initio as it was passed without securing affirmative vote of the nominee director of the Appellant No. 3? - HELD THAT:- Admittedly, the Resolution dated 30.03.2017 was passed in the presence of Mr. Bhadru Malloth nominee director of NSL. It was argued on behalf of the Respondents that the presence of the nominee director and his consent to the Board resolution dated 30.03.2017 satisfies the affirmative vote requirement. There is a specific distinction between an affirmative vote and mere consent. Affirmative vote matters provided in AoA generally to protect the rights of minority shareholders. Mere consent or presence of nominee director of NSL cannot equated with the affirmative vote as provided in clause 107 of AoA - on 30.03.2017 without affirmative vote of nominee director of NSL Board resolution was passed for filing the application under Section 10 of IBC. Such application is not maintainable for want of affirmative vote of nominee director of NSL. The application under Section 10 filed by the VR Chary the Chief Financial Officer of NDSL was not maintainable. Whether the appeal against the order of admission is barred by limitation? - HELD THAT:- The order of admission dated 20.09.2017 had no legal existence. Therefore, such order can be challenged at any time even beyond the prescribed period of limitation - the Appeal is time barred such defence is not maintainable. Whether material irregularity committed by RP in conducting the CIRP of the Corporate Debtor? - HELD THAT:- In the present case the publication in the newspapers was made on 16.05.2018. Regulation 36-A did not mandate the publication of invitation of Resolution Plan either in Form-G or otherwise in newspapers. It is only the amended Regulation 36A which came into effect from 04.07.2018 that requires the publication of Form-G in the newspapers. Therefore, the publication in the newspaper made by the RP in the case on hand on 16.05.2018 was statutorily not required and hence, the Appellants cannot take advantage of the amendment that came later, to attack advertisement. Since, there is no resolution plan, the members of CoC unanimously passed the resolution to liquidate the Corporate Debtor and authorized RP to file an Application for liquidation - the RP filed the Application before the Adjudicating Authority for liquidation of Corporate Debtor Company. All the false and frivolous allegation raised in this Appeal does not constitute material irregularity and the same is made without any basis. The Appeal is not maintainable and liable to be dismissed - Appeal dismissed.
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