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2021 (7) TMI 1093 - AT - Insolvency and BankruptcyCompromise and Arrangement - taking back the immovable and movable property or actionable claims of the ‘Corporate Debtor’ - affected person or not - compromise failure or not - promoters can act as resolution applicant or not - HELD THAT:- In the present case, the ‘Liquidator’ is playing the role of a ‘Resolution Professional’, since the ‘compromise proposal’ is placed before him, which is equivalent to a ‘Resolution Plan’. Further the ‘Resolution Applicants’ are entitled to be present when the ‘Resolution Plans’ are opened and placed before the ‘Committee of Creditors’ as per Scton 30(5) of the Code. At this juncture, they may point out whether one or other ‘Resolution Applicant’ is ineligible in terms of Section 29(A) of the Code or not. As per the preamended definition Section 29A of the I & B Code, the ‘Promoters’ could be the ‘Resolution Applicant(s)’ per contra, under the new definition ‘Promoters’ are not included in the definition of ‘Resolution Applicant’ as they are not mentioned in Clause (H) of Section 25(2) of the Code. The restriction under Section 29A of the Code shall apply when an ineligible person or any other person acting jointly with such person submits a ‘Resolution Plan’. The restriction shall also apply if such person is a connected person to a ‘Resolution Applicant’ as defined in explanation to Section 29A of the Code - The ‘term’ ‘connected persons’ as defined in explanation means, any person who is the ‘promoter’ or in the management or control of the Resolution Applicant or any person who shall be the ‘Promoter’ or in management or control of the business of the ‘Corporate Debtor’ during the implementation of ‘Resolution Plan’ or the holding Company, subsidiary Company, Associate Company or related party of a person referred to in clauses (i) & (ii) of Section 29A of the Code. Any person who is either promoter or in the management or control of the business of the ‘Corporate Debtor’ is ineligible by default under the I&B Code. The Provisions of Section 29A of the Code came into force from 23.11.2017 and further that the requirements of Section 29A of the Code applies to ‘CIRPs’ initiated after 23.11.2017. Assessment - HELD THAT:- Since the ‘Liquidation’ order was passed on 20.12.2018 in MA/646/2018 by the ‘Adjudicating Authority’ and that the ‘Resolution Professional’ Mr. G.V. Ravikumar was appointed as ‘Liquidator’ (‘Respondent’ in the ‘instant Appeal’). Added further the ‘Compromise Proposal’ was given on 24.09.2019 by the ‘Promoter’ and in reality, the Section 29A of the Code was amended with a retrospective effect from 23.11.2017 and in view of the fact that the retrospective amendment to Section 29A of the Code applies to the ‘Promoter(s)’, they are ineligible to project a ‘compromise proposal’/ ‘arrangement’ for taking back the immovable and movable properties or actionable claims of the Corporate Debtor in the considered opinion of this ‘Tribunal’. Liquidator - HELD THAT:- It is to be remembered that Section 34 of the I & B Code, 2016 deals with ‘Appointment of Liquidator’ and ‘fee to be paid’. Section 34(2) of the Code enjoins that on the ‘appointment of a Liquidator’, under this Section all powers of the ‘Board of Directors’, Key Managerial Personal and the partners of ‘Corporate Debtor’ as the case may be, shall cease to have effect and shall be vested in the ‘Liquidator’. Liquidator’s Position - HELD THAT:- Without the ‘Respondent’/‘Liquidator’ taking necessary steps, no such application to secure a ‘MSME Certificate’ was to be filed and suffice it for this ‘Tribunal’ to point out that in the ‘instant Case’, the proponents of the scheme obtaining a ‘MSME Registration Certificate’ on 03.10.2020 without the knowledge of the ‘Liquidator’ and either ignoring or brushing aside him are clearly unsustainable in the eye of Law - the ‘Liquidator’ is required to adhere to the procedure prescribed under the Code and before taking steps to sell the ‘Corporate Debtor’s Assets’ (Company) he will take necessary steps as per Section 230 of the Companies Act and that the ‘Adjudicating Authority’ if situation so warrants is to pass appropriate orders. Before approval of an arrangement or scheme, the ‘Adjudicating Authority’ by following the principles can allow the ‘Liquidator’ to form the ‘Committee of Creditors’ for its opinion to find out whether the arrangement of scheme is viable/feasible one and having correct financial matrix. On a careful consideration of respective contentions and on overall assessment of the whole gamut of the entire facts and circumstances of the present case, this ‘Tribunal’ comes to an inescapable conclusion that the Adjudicating Authority in the Impugned Order came to the right conclusion that the scheme was proposed by the Ex-directors and promoters of ‘Corporate Debtor’ and further that a ‘Creditor’/‘Member’ who is ineligible under Section 29A of the I & B Code, 2016 was disqualified to be a proponent of the scheme as per Section 230 of the Companies Act, 2013, which requires no interference in the hands of this ‘Tribunal’ sitting in ‘Appeal’. The Appeal is devoid of merits - Appeal dismissed.
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