2023 (4) TMI 1200 - AT - Insolvency and Bankruptcy

Enforcement of Security Interest for recovery of its Outstanding Dues - Seeking to nullify the Security Interest created to and in favour of the Petitioner/ Appellant and L T Infra Investment - grievance of the Petitioner/ Appellant is that the Adjudicating Authority (National Company Law Tribunal Division Bench II Chennai) without considering the Concept of Relief Period mentioned under Section 46 (1) (i) and /or Section 46 (1) (ii) of IBC and without considering the Contentions/ Objections raised by the Suspended Directors - HELD THAT - In the instant case the Petitioner/ Appellant although being a Secured Financial Creditor of the Respondent Nos. 1 4/ Corporate Debtors and not arrayed as Party in the Petition in IA(IBC)/400(CHE)/2021 and that the Petitioner/ Appellant has filed the instant Comp. App (AT) (CH) (INS.) No. 325 of 2022 as an Aggrieved Person yet this Tribunal is of the earnest opinion that the Resolution Applicant of RPPL had taken over the Corporate Debtor (ofcourse with a clean slate) after Approval of its Resolution Plan by the Adjudicating Authority / Tribunal and in that perspective the Petitioner/ Appellant has No Locus Standi to challenge the said Plan or Corporate Insolvency and Resolution Process Proceedings of the Corporate Debtor. As such the filing of an IA No.696 of 2022 in Comp. App (AT) (CH) (INS.) No. 325 of 2022 seeking Leave to prefer the instant Appeal before this Tribunal cannot be sought for with an inordinate and inexplicable delay in the considered opinion of this Tribunal. It must be borne in mind that when RISPL itself had no Rights in the Properties the aspect of any Rights having been vested on the same to and in favour of the Petitioner/ Appellant by the Security created by RISPL will not arise. In any event the Impugned Order dated 30/05/2022 in IA(IBC)/400(CHE)/2021 in IBA/1099/2019 passed by the Adjudicating Authority / National Company Law Tribunal Division Bench II Chennai does not take away the Rights of Petitioner/ Appellant in any manner. This Tribunal on a careful consideration of the divergent contentions advanced on either side all the more when RISPL itself had no rights in the Properties in question any Rights having been vested on the same to and in favour of the Petitioner / Appellant by Security created by RISPL does not arise bearing in mind a crystalline fact that the Rights of the Petitioner / Appellant are not taken away by means of the Impugned Order dated 30/05/2022 in IA(IBC)/400(CHE)/2021 in IBA/1099/2019 (on the File of the Adjudicating Authority / National Company Law Tribunal Division Bench II Chennai) comes to a consequent conclusion that the IA No. 696 of 2022 in Comp. App (AT) (CH) (INS.) No. 325 of 2022 preferred by the Petitioner / Appellant (seeking Leave to prefer the instant Appeal) is Ex facie not maintainable and it fails. Petition dismissed.

Summary

Issues Involved:
1. Recognition of the Petitioner/Appellant as a "Secured Creditor" and its rights under the SARFAESI Act, 2002.
2. Validity of the "Impugned Order" by the Adjudicating Authority.
3. Petitioner's locus standi to challenge the Resolution Plan and Corporate Insolvency Resolution Process (CIRP).
4. The maintainability of the appeal and related interlocutory applications.

Summary of Judgment:

Issue 1: Recognition as a "Secured Creditor"
The Petitioner/Appellant argued that it is a recognized Financial Institution under the Recovery of Debts and Bankruptcy Act, 1993, and a "Secured Creditor" under the SARFAESI Act, 2002. The Original Lender had provided financial assistance to the 4th Respondent by subscribing to Optionally Convertible Debentures (OCDs), which were secured by mortgage over the 4th Respondent's leasehold rights and other assets. This debt and security were assigned to the Petitioner/Appellant through a Registered Deed of Assignment.

Issue 2: Validity of the "Impugned Order"
The Petitioner/Appellant contended that the Adjudicating Authority did not consider the "Concept of Relief Period" under Section 46 of the Insolvency and Bankruptcy Code, 2016, and allowed the IA/400(CHE)/2021 in IBA/1099/2019 without properly evaluating the authenticity of the transactions. The Petitioner/Appellant argued that the Impugned Order adversely affected its rights to enforce the security interest for recovery of outstanding dues.

Issue 3: Locus Standi to Challenge the Resolution Plan
The 1st Respondent countered that the Petitioner/Appellant was not a party to the original petition and thus had no locus standi to challenge the Resolution Plan approved by the Adjudicating Authority. The Tribunal agreed, stating that the Resolution Applicant had taken over the Corporate Debtor with a clean slate, and the Petitioner/Appellant had no rights to challenge the plan or the CIRP proceedings.

Issue 4: Maintainability of the Appeal
The Tribunal concluded that the appeal filed by the Petitioner/Appellant was not maintainable due to inordinate and inexplicable delay. The Tribunal also noted that the Petitioner/Appellant, as a controlling stakeholder, could not present a case different from that of the 4th Respondent, which had already filed an appeal.

Conclusion:
The Tribunal dismissed IA No. 696 of 2022, seeking leave to prefer the appeal, as ex facie not maintainable. Consequently, the main appeal, Comp. App (AT) (CH) (Ins.) No. 325 of 2022, was also rejected. The related interlocutory applications were closed. The Tribunal also dismissed IA No. 1107/2022, filed by L & T Infra Investments Partner, seeking to be impleaded as a respondent, as not maintainable.