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2019 (9) TMI 1712 - HC - Companies LawGranting stay of operation of an order passed by the court of first instance, dated April 22, 2019 - grant of ad interim order of injunction restraining the defendant/opposite party from illegally suspending a Permissive User Agreement (PUA) for a limited period. Whether subject-matter of the PUA ex facie fall within the ambit of "preferential transactions", barred under Sections 43(2)(a) and 44(1)(b) of the IBC? HELD THAT:- The NCLT has authority to examine the PUA under Sections 43 and 44 and therefore also has authority to examine and decide whether the PUA was backdated or manufactured. No other forum or court can decide such an issue - As far as the PUA not being void but at best voidable, and that the same has to be terminated, otherwise the rights of the petitioner under the same continues, such proposition is refuted by the opposite party. It is submitted by the opposite party that the PUA itself is fabricated and as such, since the existence of the same is not admitted by the opposite party, an attempt to terminate the same would validate and/or acknowledge the existence of such a fabricated, non-existent document. The question of termination would only arise if the existence of the document was acknowledged. Secondly, by virtue of the order dated April 8, 2019, the NCLT has approved the resolution plan in its totality, thereby terminating the PUA, and no further specific termination thereof is required in law. Upon hearing both sides, it is seen that Sections 43 and 44, as well as Section 45 of the IBC are inapplicable to the present case, in view of those being maintainable only at the instance of a liquidator or a resolution professional. Hence, the petitioner had no scope to resort to the said provisions for the reliefs claimed in the suit - the transaction-in-question, being the PUA, being of the year 2014, was well beyond the look-back period as contemplated in Section 46. Mere alteration in the Memorandum and Articles of Association to include manufacturing purposes or absence of any prima facie proof of any transaction relating to the trademark having occurred during the relevant look-back period do not ipso facto invalidate the said agreement or indicate that the same was manufactured or fraudulent. The pendency of the avoidance petition itself is not a bar to the institution of the suit, more so because the PUA is ex-facie of 2014, that is, beyond the look-back period contemplated in Section 46 of the IBC. It is apparent that there is and was strong prima facie case in favour of the petitioner for grant of ad interim injunction in its favour. Irreparable injury - balance of convenience and inconvenience - HELD THAT:- Those are obviously in favour of the petitioner, in view of the conduct of the opposite party and the circumstances of the case, inasmuch as the resolution plan has been approved and a direct challenge has been thrown to the validity of the suit itself, thereby putting the petitioner at the peril of losing its rights on the PUA, which is its only collateral security for the claim of outstanding money from the opposite party. The impugned order suffers from patent jurisdictional error and ought to be set aside - Order disposed of by setting aside the impugned order of the appellate court and reviving the order of ad interim injunction passed by the trial court, with liberty to the petitioner to pray for extension/re-imposition of the trial court's order, if not already extended.
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