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2021 (3) TMI 1432 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Failure to pass an order of ‘admission’ or ‘rejection’ in respect of such Application in terms of mandate of Section 7(4) & (5) of the I&B Code - HELD THAT:- The Adjudicating Authority are directed to pass an order of ‘admission’ or ‘rejection’ of the Application filed by the Appellant under Section 7 of the I&B code within one week and report compliance to this Appellate Tribunal.
Appeal disposed off.
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2021 (3) TMI 1431 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Application under Section 7 of IBC not in the form prescribed under IBC - application rejected as defective for want of certification and verification of the averments made - agreement not admissible evidence as it was not property stamped - HELD THAT:- In the present matter, the Corporate Debtor’s account became NPA on 31st May, 2016, is not in dispute. If the Appellant has grievance that the calculations made with regard to the amount outstanding is not correct as per the record, then documents of same can be looked into by the Resolution Professional in CIRP. As far as the admission of the Application is concerned, question required to be considered by Adjudicating Authority, was to see if financial debt was due and if default was of Rupees One Lakh. If the Application is otherwise complete, the Application is required to be admitted.
In Judgement in the matter of M/S. INNOVENTIVE INDUSTRIES LTD. VERSUS ICICI BANK & ANR. [2017 (9) TMI 58 - SUPREME COURT], the Hon’ble Supreme Court held that The later non-obstante clause of the Parliamentary enactment will also prevail over the limited non-obstante clause contained in Section 4 of the Maharashtra Act. For these reasons, we are of the view that the Maharashtra Act cannot stand in the way of the corporate insolvency resolution process under the Code.
There are no error on the part of Adjudicating Authority. For such reasons, it is found that there are no substance in the submissions being made on behalf of the Appellant - appeal dismissed.
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2021 (3) TMI 1430 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Frequent adjournments being granted by the Adjudicating Authority and re-notifying the matter time and again - HELD THAT:- There is need to introduce provision in the legal framework to vest power of superintendence and control qua National Company Law Tribunals in this Appellate Tribunal. Due to lack of supervisory jurisdiction many aggrieved persons are compelled to adopt the route of filing the appeal though there is no order on merit.
This appeal is disposed off by directing the Adjudicating Authority to take a call and pass an order on merit in regard to the Resolution Plan pending consideration before it within two weeks.
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2021 (3) TMI 1429 - ITAT CHENNAI
Disallowance u/s 14A r.w.r. 8D - sole objection raised by assessee is that rule 8D(2) of the Rules to section 14A of the Act has no application for the assessment year under consideration i.e., 2015-16, but the AO has wrongly applied - CIT(A) confirmed addition - HELD THAT:- We find that the order passed by the Ld. CIT(A) needs to consider afresh. Thus, we set aside the order passed by the Ld. CIT(A), and we remit the matter back to the AO for examination whether rule 8D(2) of the Rules applies to the present assessment year under consideration or not and decide the issue in accordance with law. Hence, the first ground of appeal allowed for statistical purpose.
Disallowance of depreciation on Printers, UPS, scanners and Router - @15% OR 60% - According to the AO, the depreciation is only allowable at 15% - HELD THAT:- As the computer accessories and peripherals cannot be used without computer as they are part of the computer system they are entitled to depreciation at a higher rate of 60%. We, therefore respectfully following the decisions M/s. Cholamandalam MS General Insurance Company Ltd. [2019 (2) TMI 1075 - MADRAS HIGH COURT] and BSES Yamuna Powers Ltd. held that the assessee is entitled for depreciation @ 60% - Decided in favour of assessee.
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2021 (3) TMI 1428 - ITAT AHMEDABAD
Benefit of VSV Scheme - HELD THAT:- When the matter was called for hearing, the ld. counsels for the assessee at the outset have submitted that they do not seek to pursue the said appeals owing to exercise of opt ion for availing VSV Scheme and consequently requested that their applications for withdrawal of appeals may please be granted. Reference was also made to written requests in this regard.
Revenue stated that he has no objection to withdraw the appeals in the circumstances narrated on behalf of the assessee. Thus appeals are dismissed as withdrawn.
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2021 (3) TMI 1427 - PUNJAB AND HARYANA HIGH COURT
Grant of Default Bail - evasion of GST - validity of provisions of Sections 69 and 132 of CGST Act, 2017 - HELD THAT:- This Court has issued notice with interim directions and are now fixed for hearing on 28.06.2021.
Notice of motion for 28.06.2021.
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2021 (3) TMI 1426 - CESTAT AHMEDABAD
Maintainability of appeal - Settlement under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - HELD THAT:- Since the case has been settled under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 the appeal lying pending in this tribunal shall be deemed to have been withdrawn in terms of section 127(6) of Chapter V of Finance (No.2) Act, 2019.
The appeal is disposed of as withdrawn.
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2021 (3) TMI 1425 - ITAT MUMBAI
Deduction u/s.80P(2)(d) - assessee received interest income being interest on savings account, term deposits and fixed deposits with Co-operative banks, sale of scrap, miscellaneous income, dividend and interest free tax free bonds - AO held that interest income received by the assessee from Co-operative bank does not fall in the exempt category as provided u/s.80P(2)(d) of the Act along with other income - HELD THAT:- As already stated that this issue is already decided in favour of the assessee by this Tribunal in assessee’s own case for A.Y.2015-16 as decided in the case of PCIT vs. Totagars Co-operative Sale Society [2017 (1) TMI 1100 - KARNATAKA HIGH COURT] has held that for the purpose of section 80P(2)(d) of the Act a cooperative bank should be considered as cooperative society. Similar view has been taken by the Hon'ble Gujarat High court in the case of Surat Vankar Sahakari Sangh Ltd. [2016 (7) TMI 1217 - GUJARAT HIGH COURT]
On the same issue in the case of PCIT vs. Totagars Co-operative Sale Society [2017 (7) TMI 1049 - KARNATAKA HIGH COURT] has taken a contrary view holding that interest income earned from deposit with the cooperative bank does not qualify for deduction under section 80P(2)(d). It would be relevant to mention here that the Hon'ble High Court while rendering later judgement has not considered the earlier decision rendered in the case of Totagars Co-operative Sale Society reported [2017 (1) TMI 1100 - KARNATAKA HIGH COURT]
No judgement from Hon'ble Jurisdictional High court on the issue of eligibility of deduction u/s 80P(2)(d) of the Act on interest income from cooperative bank has been brought to our notice. The Hon'ble Bombay High Court in the case of K. Subramanian Vs. Siemens India Ltd. [1983 (4) TMI 3 - BOMBAY HIGH COURT] has held that when two conflicting decisions of non-jurisdictional High courts are available, the view which is in favour of the assessee, is to be preferred. Decided in favour of assessee.
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2021 (3) TMI 1424 - DELHI HIGH COURT
Enforcement of Arbitral Award - exchange rate for discharge of the amounts awarded in foreign currency - TDS on the awarded amounts - entitlement of charges for extending the Bank Guarantees.
Whether there is any binding agreement between the parties whereby they have agreed that the amounts awarded in foreign currency would be computed at the exchange rate as prevalent on 15.09.2017? If not, the exchange rate to be applied for discharge of the amounts awarded in foreign currency? - HELD THAT:- In the present case, the exchange rate as applicable on the date when the NTPC's Special Leave Petition was dismissed by the Supreme Court-that is, 22.09.2020-will be the relevant date for ascertaining the exchange rate applicable for determining the INR equivalent to the amounts awarded in foreign currency. However, according to Voith, as part payment had been received on 06.11.2018, the exchange rate applicable on that date may be considered for determining the awarded amounts paid by NTPC. Since the value of foreign currencies as on 22.09.2020 was higher than on 06.11.2018, this Court considers it apposite to bind Voith to its concession in this regard.
The exchange rate as applicable on 06.09.2018 would be considered relevant for the amounts released on 06.11.2018 being the part payment released by NTPC in terms of the Niti Aayog Circular and the exchange rate as applicable on 22.09.2020 would be considered for discharging the remaining amount awarded in foreign currency.
Whether it was open for NTPC to deduct TDS on the awarded amounts and whether the deduction of the said amount and deposit of the same with the Income Tax Authorities constitutes a discharge of the amounts awarded to the aforesaid extent? - HELD THAT:- It is relevant to note that NTPC had deducted TDS in two tranches. It had deducted ₹ 2,58,55,348/- (₹ 1,32,10,961/- on the principal and ₹ 1,26,44,387/- on the interest) and had deposited the same on 07.12.2018. This amount was deducted at the time of remission of money in terms of the Niti Aayog Circular. The second tranche of ₹ 1,34,488/- was deducted by NTPC while depositing the balance amount. Out of the aforesaid amount ₹ 1,10,84,032/- was deducted on account of the principal amount and ₹ 23,50,456/- on account of interest. The said TDS was deposited on 07.01.2020 - this Court considers it apposite to direct that NTPC be credited to the extent of TDS amounting to ₹ 1,61,72,269/- (₹ 1,06,42,438/- plus ₹ 55,29,831/-) against TDS deducted and deposited by NTPC. The said amount would be considered as discharged by NTPC on the dates when these amounts were deposited to the credit of Decree Holder No. 1.
Insofar as the remaining amount of TDS is concerned, NTPC is entitled to apply to the Income Tax Authorities for refund of the same. It is further directed that the Income Tax Authorities shall process NTPC's request for refunding of the TDS incorrectly deposited on the strength of this order.
Whether Voith is entitled to charges for extending the Bank Guarantees, as claimed? - HELD THAT:- This Court does not consider it apposite to entertain Voith's prayer for such charges. It is also relevant to mention that Voith had voluntarily furnished Bank Guarantees for release of the part of the awarded amount in terms of the Niti Aayog Circular. The Niti Aayog Circular does not provide for payment of any charges for furnishing Bank Guarantees. Voith had elected to receive payments in terms of the Niti Aayog Circular and therefore, this Court does not consider it apposite to accede to its prayer for Bank Guarantee Charges which were incurred by Voith for furnishing the Bank Guarantees against payments in terms of the Niti Aayog Circular. It was also pointed out that NTPC had released the payment under the Niti Aayog Circular while accepting the Advance BGs to cover part of the amount so released. It was submitted that in this view, the Advance BGs should also be considered as Bank Guarantees furnished in terms of the Niti Aayog Circular. This contention is merited.
This Court does not consider it apposite to accede to the prayers for reimbursement of bank charges. The prayer made by Voith in this regard, is rejected.
This Court considers it necessary to clarify that the calculations for discharge of the amount would be in accordance with the tabular statement in the Arbitral Award setting out the amounts awarded in different currencies. It is seen that the Arbitral Tribunal had deducted the advances and had computed the total amount payable after such deduction. Thus, the total amount as awarded after deduction of the advances would necessarily have to be considered as the awarded amount and the amounts paid by NTPC would be adjusted against the awarded amounts and the interest thereon. The amounts paid by NTPC are required to be first appropriated towards interest and the remaining against principal - NTPC shall recompute the shortfall payable by NTPC and shall pay the shortfall as computed.
List on 26.03.2021 for reconciliation of the amount and for consideration of any further issues that arises in connection with the aforesaid calculations.
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2021 (3) TMI 1423 - KARNATAKA HIGH COURT
Addition u/s 14A r/w rule 8D - mandation of earning of any income which is exempted from tax - HELD THAT:- As no dividend or exempt income was claimed by the assessee during the relevant previous year. It is well settled in law that if no exempt income has accrued to the assessee, the provisions of Section 14A do not apply to the fact situation of the case. See M/S STERLING DEVELOPERS PVT. LTD [2021 (3) TMI 1422 - KARNATAKA HIGH COURT] - Decided in favour of assessee.
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2021 (3) TMI 1422 - KARNATAKA HIGH COURT
Disallowance u/s 14A r.w.r. 8D - expenses which are relatable to earnings of exempt income - HELD THAT:- As decided in own case [2021 (2) TMI 588 - KARNATAKA HIGH COURT] no dividend or exempt income was claimed by the assessee during the relevant previous year. It is well settled in law that if no exempt income has accrued to the assessee, the provisions of Section 14A do not apply to the fact situation of the case. See case NOVELL SOFTWARE DEVELOPMENT (INDIA) PVT [2021 (2) TMI 145 - KARNATAKA HIGH COURT] Decided in favour of assessee.
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2021 (3) TMI 1421 - MADHYA PRADESH HIGH COURT
Principles of Natural Justice - No reasons are assigned as to why the conclusion was drawn that the reply is not satisfactory - debarring or blacklisting a contractor - HELD THAT:- In the catena of judgments, the Hon'ble Supreme Court opined that debarring or blacklisting a contractor has drastic consequences on him. The said penal action cannot be passed without following the “due process” and without assigning adequate reasons.
The reply to the show cause notice submitted by the petitioner clearly shows that the petitioner has assigned detailed reasons in support of his defense. He mentioned about various clauses of NIT and prayed that no coercive action be taken against him - the aforesaid finding that reply is not satisfactory is a conclusion drawn by the Managing Director for which no reasons are assigned. Reasons are held to be heart beat of conclusion.
On the basis of Judgment in Kranti Associates [2010 (9) TMI 886 - SUPREME COURT], in contractual matter, the Division Bench of this Court in M/S. AICONS ENGINEERING PVT. LTD. VERSUS STATE OF M.P. & OTHERS [2019 (11) TMI 1796 - MADHYA PRADESH HIGH COURT] set aside the order which was not a speaking order and no reasons were assigned.
The order dated 22.01.2021 cannot be upheld because it does not contain any reason whatsoever for the conclusion that reply is not satisfactory - petition allowed.
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2021 (3) TMI 1420 - KARNATAKA HIGH COURT
Review petition - Depreciation on computers disallowed u/s 40(a)(ia) - decision of this Court in 'M/s. WIPRO LTD. [2015 (10) TMI 826 - KARNATAKA HIGH COURT] does not apply to the case of the assessee - HELD THAT:- From perusal of the judgment [2020 (12) TMI 738 - KARNATAKA HIGH COURT] it is clear that we have not expressed any opinion as to whether or not the decision of M/s. WIPRO LTD., supra apply to the case of the assessee. Therefore, it is clarified that it would be open for the assessee to contend before the Tribunal that the aforesaid decision does not apply to the case of the assessee.
With the aforesaid clarification, review petition is disposed of.
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2021 (3) TMI 1419 - ITAT MUMBAI
Assessment u/s 144C - time limit prescribed for competing of assessment proceedings u/s 153 - no draft assessment order could have been issued in this case - HELD THAT:- There is no dispute that if there would not have draft assessment order, the assessment would have been time barred as on 31.12.2016, the present assessment order dated 16.10.2017. Once, we hold that no draft assessment order would have been issued in this case as the provisions of Section 144C(1) of the Act could not have been invoked in this case. The time limit for completion assessment was available only to 31.12.2016, hence, we are of the view that the issuance of draft assessment order cannot end up increasing the time limit for completion of the assessment under section 143(3) of the Act. This issue has been adjudicated by the co-ordinate bench of this Tribunal in the case of IPF India Property Cyprus (No.1) Ltd.[2020 (2) TMI 1500 - ITAT MUMBAI]
We noted that in the present case neither the learned Sr. DR nor the assessee has disputed the fact and there is proposed variation in the income or losses reported by the assessee to the Income Tax Authorities. The matter before the Assessing Officer was only with respect to the rate of tax chargeable by the assessee and actually there is no variation in income or losses - we allow this additional ground of the assessee and hold that the assessment framed by Assessing Officer is time barred and hence quashed.
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2021 (3) TMI 1418 - SC ORDER
Grant of bail - imposition of a condition of furnishing of a bank guarantee - case is that the High Court erred in making bail conditional upon furnishing of a bank guarantee which is as good as cash deposit having regard to the condition usually imposed by banks for issuance of bank guarantee - HELD THAT:- By imposing the condition of furnishing bank guarantee of Rs.53,60,000/-, the High Court has, in an application for bail under Section 439 of the Criminal Procedure Code, virtually issued directions in the nature of attachment before judgment in a civil suit, if not recovery of dues without trial.
It is well settled by a plethora of decisions of this Court that criminal proceedings are not for realization of disputed dues. It is open to a Court to grant or refuse the prayer for bail, depending on the facts and circumstance of the particular case. The factors to be taken into consideration, while considering an application for bail are, the nature of accusation and the severity of the punishment in the case of conviction; the nature of the materials relied upon by the prosecution; reasonable apprehension of tampering with the witnesses or apprehension of threat to the complainant or the witnesses; reasonable possibility of securing the presence of the accused at the time of trial or the likelihood of his abscondence; character behaviour and standing of the accused; the larger interest of the public or the State and similar other considerations. A Criminal Court, exercising jurisdiction to grant bail/anticipatory bail, is not expected to act as a recovery agent to realise the dues of the complainant, and that too, without any trial.
As held by this Court in ANIL MAHAJAN VERSUS BHOR INDUSTRIES LTD. AND ORS. [2004 (10) TMI 621 - SUPREME COURT], the substance of the complaint is to be seen. If criminal proceedings are unwarranted, there can be no question of custody and in no circumstance can bail be made subject to the terms, which tantamount, in effect, to execution at the inception.
It is deemed appropriate to modify the order of the High Court impugned by deleting conditions (iv) and (viii) extracted hereinabove, that is, the condition of furnishing bank guarantee of Rs.53,60,000/- - SLP disposed off.
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2021 (3) TMI 1417 - ITAT HYDERABAD
Levy of late filing fee u/s. 234E r.w.s. 221(1) - Intimation u/s 200A - As contended that prior to the amendment u/s. 200A w.e.f. 1.6.2015, levy of fee u/s. 234E during processing of the TDS statement was not tenable - HELD THAT:- Issue of amendment in Section 200A(1) of the Act has become very much a debatable issue, we therefore AO while processing the TDS statements, returns in the present set of appeals of the period prior to 1.6.2015, ought not to have charged fee u/s. 234E hence, the intimation issued by the AO u/s. 200A of the Act, in the appeals before us, does not stand, therefore, the demand raised by way of charging fee u/s. 234E of the Act is not valid and the same is deleted for the prior period 1.6.2015, is beyond the scope of adjustment provided u/s. 200A of the Act. The impugned demands are delete therefore. Assessee appeal allowed.
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2021 (3) TMI 1416 - ITAT BANGALORE
Condonation of delay filling appeal before ITAT - Late fee u/s. 234E - delay in filing the TDS statement - intimation u/s. 200A - assessee’s contention before CIT(A) was that the provisions of section 234E of the Act was inserted by the Finance Act, 2012 w.e.f. 1.7.2012 - CIT(A) has proceeded to hold that the Assessee is guilty of negligence on a presumption that the Assessee must be conversant with operating TDS return on the website of the Department and that the intimation u/s.200A could not have escaped his attention - HELD THAT:- In a case like this the benefit of doubt should go to the Assessee. Therefore, the Assessee is not guilty of negligence and the delay was due to bonafide reasons.
As per the ratio laid down by the Hon’ble Supreme Court in the case of Collector of Land Acquisition Vs. Mst. Katiji & others [1987 (2) TMI 61 - SUPREME COURT] delay should be condoned where there is no negligence. The Hon’ble Apex Court has emphasized that substantial justice should prevail over technical considerations. The Court has also explained that a litigant does not stand to benefit by lodging the appeal late. The Court has also explained that every day’s delay must be explained does not mean that a pedantic approach should be taken. The doctrine must be applied in a rational common sense and pragmatic manner.
in the case of MSV IT Solutions Ltd. [2018 (10) TMI 1774 - ITAT HYDERABAD] wherein on identical facts noticing that there was no legal remedy prior to 1.6.2015 against an intimation u/s.200A of the Act, the Hyderabad Bench condoned delay in filing appeal before CIT(A).
Thus reasons given by the Assessee for condonation of delay and keeping in mind that technicalities should not stand in the way of rendering substantive justice, we are of the view that the delay in filing the appeals deserves to be condoned. Direction to decide the appeals of the Assessee on merits - Appeals by the assessee are treated as allowed for statistical purpose.
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2021 (3) TMI 1415 - ORISSA HIGH COURT
Seeking grant of permission and recognition to self-financing courses run by different institutions, including the petitioner-institution, until further orders, as desired by the Minister, Higher Education of Orissa - HELD THAT:- In view of the provisions contained under Section 5 of the Act read with the Rules, as mentioned, on receipt of the application along with required documents, the prescribed authority shall scrutinize each of the applications, consider the applications which are found complete in all respects and have been made in conformity with the Act and Rules made thereunder and, thereafter, may make such inquiry as he may deem necessary. He shall make a report in respect of each application with his recommendations which shall be placed before the committee constituted in this behalf by the State Government.
As per the provisions of sub-section (6) of Section 5 of the Act, if the committee is satisfied that the educational needs of the local area justify establishment of an educational institution, that the place where the educational institution is proposed to be established is likely to best serve the educational needs of that area, the permission will be granted and the same will be communicated to him who submitted the application. In the case at hand, required procedure, as envisaged under the Act and Rules, was duly followed and accordingly the application submitted by the petitioner was placed before the High Power Committee, which in its meeting held on 18.04.2008 granted necessary permission, as per Annexure-B appended to Annexure-5 to the writ petition, for opening of new +2 science college with 128 seats (English, MIL & PCMB) 128 seats each, I.T. & Electronics-64 seats each from the session 2008-09 and, as such, the said decision was also communicated vide Annexure-2 on 01.05.2008 to the petitioner for compliance of the conditions therein to run the institution. Though the same was complied with by 26.05.2008 and when the institution was going to be functioning, on 28.05.2008 the order impugned has been issued.
Similar question had come up for consideration in GOVERNING BODY OF +2 SCIENCE COLLEGE VERSUS STATE OF ODISHA [2014 (2) TMI 1417 - ORISSA HIGH COURT], wherein this Court held that as per the statute, no other authority has jurisdiction to change the decision of the High Power Committee. Thereby, the other authority has no jurisdiction to pass the order in contra. As it appears, the order in Annexure-6 dated 28.05.2008 has been passed by the Deputy Director, who is not competent to do so. Thereby, the order in question is without jurisdiction.
While considering Section 2(2) of the Civil Procedure Code, the definition of decree defined as a decree passed by the Court without jurisdiction is nullity. When defect of jurisdiction is such which cannot be cured by consent or waiver of party, the defence of nullity can be set up whenever such decree is sought to be enforced.
This Court is of the considered view that the order so passed by the Deputy Director on 28.05.2008 in Annexure-6 keeping in abeyance the decision taken by the High Power Committee in its meeting held on 18.04.2008 regarding grant of permission and recognition to self-financing courses run by different institutions, including the petitioner-institution until further orders, cannot sustain in the eye of law - Petition allowed.
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2021 (3) TMI 1414 - ITAT JABALPUR
Assessment u/s 153A - approval by the JCIT as required u/s 153D - Prior approval necessary for assessment in cases of search or requisition - HELD THAT:- From the correspondence between the A.O. on one hand and the JCIT on the other hand and the letter addressed by the JCIT to the Commissioner clearly shows that it was at the stage of discussion and the JCIT could not able to make his mind. Ultimately he simply says that due to shortage of time as he was holding charges for six ranges, it is not possible for him to go into the material deep, therefore, he approved the proposal technically as required u/s 153D of the Act, immediately, after the AO brings to his notice that the assessment is getting time barred.
JCIT has not applied his mind even though there was a discussion between the A.O. and JCIT, the JCIT could not make his mind. Hence, this kind of casual approval/technical approval without going to the matter and without applying his mind to the material available on record is not an approval at all. Therefore, A.O. has no jurisdiction to pass the assessment order. In other words, the assessment order passed by A.O. as confirmed by C.I.T.(A) is void, nullity, non-est, hence, cannot be stand in the eye of law.
An irregularity in the assessment order may be rectified by remitting back the matter to the assessing officer. In the case on hand it is not an irregularity in the assessment order, it is a jurisdictional error. A.O. has no jurisdiction to pass the assessment order unless the JCIT granted approval.
This Tribunal is of the considered opinion that this is not a rectifiable error since it is a jurisdictional error and not an irregularity in the assessment proceeding. Moreover, even if the matter is remitted back, the AO cannot do anything better, since time limit provided under the Act has already expired. Therefore, this Tribunal is unable to uphold the orders of the lower authorities. Accordingly, the orders of both the authorities below were set-aside and the entire assessment order as confirmed by C.I.T.(A) are quashed. Decided in favour of assessee.
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2021 (3) TMI 1413 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH: NEW DELHI
Legality of Resolution Plan - disallowing the terms contemplated in Clause 15.15.5 of the Resolution Plan, thus making the entire Plan unviable and unfeasible - Appellant contends that the Adjudicating Authority has while purportedly approving the Resolution Plan dated March 11, 2019, submitted by the Appellant under Section 31(1) of the Code, unilaterally made certain modifications to the Plan and increased the outflow of the Appellant beyond the sum of ₹400 Crore offered by the Appellant in the Plan, without the consent of the Appellant/Resolution Applicant - HELD THAT:- In the instant case, the Adjudicating Authority, instead of approving or rejecting waivers, approvals and extinguishment sought in the Resolution Plan, has only directed the Resolution Applicant to seek such waivers, approvals and extinguishment from relevant authorities. Therefore, it cannot be concluded that the Adjudicating Authority has unilaterally altered or modified the Resolution Plan. Thus, the Appellants contend that the Adjudicating Authority has unilaterally altered the plan duly approved by the 'CoC', without the Resolution Applicant's consent is without any basis. Therefore, the Appellants contend that by not granting the waiver, the Adjudicating Authority has interfered in the 'CoC’ commercial decision is misconceived.
The Adjudicating Authority has not in any manner mandated or directed ‘SSN’ to make payments of the transfer fee, consideration, premium, arrears of lease rent, penalties, interest or any other payment to ‘WBIDC’. The ‘CoC’ has approved the Resolution Plan, fully aware of Clause 15.3, Clause 15.12 and Clause 15.14 (VI)(g). The Resolution Plan explicitly states that if waivers are not granted or the assumptions made are not true, it will not have a bearing on the Resolution Plan's successful implementation.
This Appeal is filed to avoid anticipated action on refusal to implement the Approved Plan - Appeal dismissed.
Resolution plan approved - the total payment to the creditors of the Corporate Debtor under the Resolution Plan is ₹ 364.5 Crores, which is far less and below the liquidation value of the Corporate Debtor, which is ₹ 614 crores and the Resolution Plan has been approved despite the fact that there is no maximisation of the assets of the corporate debtor to satisfy the debts of the all the stakeholders concerned - HELD THAT:- There has been no interaction or communication between the Resolution Professional and Mr Anoop Krishna in relation to the ‘CIRP’ of the Corporate Debtor. Mr Anoop Krishna became a director of the group company of the Resolution Applicant. The process of selecting the Successful Resolution Applicant had been conducted fairly and transparently. All three outbidding processes that were conducted, where open processes, were conducted in the presence of Members of the Committee of Creditors and Resolution Applicants. In each process, multiple rounds of outbidding took place and each participating Resolution Applicant was given the same opportunity to outbid the other Resolution Applicant's. Therefore it was not possible for any single Resolution Applicant to influence the outbidding process - It appears that instant appeal is a mala fide attempt on the part of the Appellant to disturb the Resolution Process, and the same cannot be sustained. In the circumstances as stated, it is believed that the Appeal sans merit and deserves to be dismissed.
Approved resolution plan - it is alleged that the Adjudicating Authority has erred in holding that the Respondent No.1 Corporate Debtor is the owner of the Wind Mill Project at Dhule, Maharashtra - HELD THAT:- The Information Memorandum of the Corporate Debtor provided to all the Resolution Applicants and Members of the ‘CoC’ has mentioned the Appeal's pendency before Debt Recovery Appellate Tribunal. Therefore, it is clear that all Resolution Applicants have been made aware of the Appeal's pendency. Successful Resolution Applicant is to be bound by order of the Appeal, which may either confirm or set aside the sale of Wind Mill asset - the Adjudicating Authority has also mentioned the above things in its Order and stated that the Corporate Debtor's right to hold the ‘Wind Mill’ asset is not affected unless the Debt Recovery Appellate Tribunal reverses it. Thus it is clear that the Adjudicating Authority has neither exceeded its jurisdiction nor has determined the title of the property but has merely taken note of the facts at hand in passing the impugned Order - appeal dismissed.
Approved Resolution plan - eligibility of 'S.S. Natural Resources Private Limited' a Successful Resolution Applicant (from now on referred to as the H-1 Bidder) to submit a Resolution Plan regarding Ramsarup Industries Ltd (from now on referred to as the Corporate Debtor) - HELD THAT:- Shyam Ferro is not an NPA and does not have an investment in a company that is an NPA. Neither Shyam Emco Infrastructure Ltd nor Emco Power Ltd is NPA. They do not have an investment in an NPA company. By merely having a group company, which has shareholders, who are also shareholders in an NPA entity, does not disqualify the Successful Resolution Applicant ‘SSN’ - eligibility criteria under Section 29 A of the Code are not violated, and ‘SSN’ is eligible under Section 29 A of the Code to submit a Resolution Plan for the Corporate Debtor.
The Adjudicating Authority's finding that the Successful Resolution Applicant ‘SSN’ is not disqualified under Section 29 A of the Code to submit a Resolution Plan needs no interference from this Appellate Tribunal - the Appeal sans merit and deserves to be dismissed.
Rejection of application - only ground for rejection of the Application is that the Committee of Creditors had already approved the Resolution Plan, and the Appellant had not submitted its claim before the Resolution Professional within the time stipulated by the Code - HELD THAT:- The ‘CoC’ took considerable time and efforts to finalise and approve the Resolution Plan with a 74.41% vote share. The ‘COC’ has taken approximately one year and three months on the Resolution Process of the Corporate Debtor and could approve the corporate debtor's final Resolution Plan. The Appellant is now seeking to turn back the clock in the garb of the Hon’ble Supreme Court’s order by misinterpreting it, which is not sustainable. The appellant wants to cover up its shortcomings. There is a hiatus on the Appellant part for not filing its claim with the Resolution Professional within the prescribed timelines. Appellant is now seeking to turn back the clock of the entire resolution process spanning a period of approximately 15 to 16 months, jeopardising the successful Resolution Plan involving a debt of about ₹ 6,000 crores, which has been approved of 74.41% of the voting share. It will further jeopardise the claims of the various Financial Creditors and Operational Creditors of Respondent No. 1 Corporate Debtor - the Appeal sans merit and deserve to be dismissed.
Admissibility of claims - Appellant contends that the Resolution Professional had no power to adjudicate and reject the claim submitted by him - HELD THAT:- The IRP/Resolution Professional is empowered to make the best estimate of the claim based on the information available with him. IRP/RP is further authorised to revise the amounts of the claim admitted, including the estimates of the claim made under Regulation 14(1), when he comes across additional information warranting such revision - In the instant case, Resolution Professional sought additional supporting documents concerning the claim. But the Appellant failed to submit the documents required to be filed as per Regulation 8 of the CIRP Regulations. Verification of claim by the Resolution Professional cannot be treated as an adjudicatory exercise. Therefore, Appellants contention that Resolution Professional has exceeded jurisdiction is not sustainable.
The RP had rejected the claim of the Appellant for want of sufficient evidence as required under Regulations. The Adjudicating Authority also found no illegality or irregularity rejected the Company Application against Resolution Professional's order - Appeal dismissed.
Approval of Resolution plan - Appellant contends that the Adjudicating Authority has approved the Resolution Plan even though the Resolution Plan in respect of the Corporate Debtor envisages the transfer of land belonging to the Appellant and not the Corporate Debtor - HELD THAT:- Since Mr Ashish Jhunjhunwala, the Appellant and the Corporate Debtor promoter, had filed An Application under Section 10 of I&B Code, 2016 of the Corporate Debtor. Therefore, after the same was admitted on 8 January 2019, he has been a part of almost all ‘CoC’ meetings from the beginning, including the 1st ‘CoC’ meeting, which was conducted on 7th February 2018. Time and again, various issues about the Durgapur unit/land had been discussed in the ‘CoC’ meetings in the presence of Mr Jhunjhunwala. However, he failed even once to point out that the Appellant was to be treated as a separate entity, and the land could not be part of the Resolution Process. For the 1st time, in the 21st ‘CoC’ meeting held on 11 February 2019, Mr Ashish Jhunjhunwala raised an objection stating that the land at the Durgapur does not belong to the Corporate Debtor. The same was done only at the fag end and when Mr Jhunjhunwala realised that the ‘CIRP’ was at the final stage against his expectations - the Corporate veil should be pierced, and the real Promoter/Management’s acts and intention cannot be ignored - Appeal dismissed.
Recovery of dues - pari passu charge over movable fixed asset - impugned order challenged on the ground that the Adjudicating Authority has arbitrarily dealt with the Appellant’s Application in para No. 18 to 23 of the Impugned Order and while dismissing the same without looking into the documents on record has erroneously held that the Appellant has failed in proving that it has an exclusive charge over the Air Separation Plant - HELD THAT:- It is also important to mention that the security interest was always available with Pegasus during the corporate insolvency resolution process of the Corporate Debtor. However, concerns were raised only after approval of the Resolution Plan by the ‘CoC’. The distribution of proceeds amongst the lenders being an inter-creditor issue. It was the ‘CoC’ along with the Process Advisers to the ‘CoC’ that prepared and confirmed the methodology of distribution of proceeds on the basis of security structure. The security interests recorded for each creditor has been made available, to be scrutinised and inspected by the ‘CoC’ during the ‘CIRP’. The distribution methodology has been repeatedly shared with the members of ‘CoC’ vide various emails. The ‘CoC’ in its 24th meeting held on 6 March 2019 discussed the methodology of distribution and was put to vote. The members of the ‘CoC’ were specifically asked to review the final distribution methodology that was prepared. The Pegasus sent an email to the RP on 19 March 2019, i.e. after the voting on the Resolution Plan had concluded, and the Resolution Plan along with the distribution methodology as per the security interest was approved by a vote share of 74.41% - Appeal dismissed.
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