TMI Blog2017 (10) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... atter like the resolution process under the I.B. Code. 2016 is not being done. (iii) Notice to Mr. R.K. Kapoor, Chartered Accountant, C/o R.K. Kapoor & company, the statutory auditors of the company to appear in person on 25.9.2017 and to file an affidavit explaining the circumstances as to why the statutory record has not been handed over to the IRP and to show cause as to why the proceedings for violation of the directions of this Tribunal while appointing Interim Resolution Professional be not initiated. (iv) Notice to the Intervener Mr. Ashwani Kumar Prabhakar, the Director of the Corporate Debtor to file his affidavit and to appear in person on 25.09.2017 to show cause as to why action be not initiated for not complying with the instructions of the Interim Resolution Professional in the collection of information and handing over management of the Corporate Debtor. (v) Commissioner of Police, Ludhiana to provide necessary police protection/assistance to Mr. Anil Kumar, Interim Resolution Professional in the performance of his functions, as and when Mr Anil Kumar makes a request to the police department in the discharge of his duties. - C.A Nos. 123/2017 & 124/2017 IN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s profession and as an Insolvency Professional with high standards of ethics and moral. (iv) The Interim Resolution Professional shall endeavour to constitute the Committee of Creditors at the earliest but not later than three weeks from the date of this order. It is hereby directed that the Corporate Debtor', its properties, personnel and the persons associated with the management shall extend all cooperation to the Interim Resolution Professional in managing the affairs of the 'Corporate Debtor' as a going concern and extend all cooperation in accessing books and records as well as assets of the 'Corporate Debtor' (v) The Interim Resolution Professional shall cause a public announcement within three days as contemplated under Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 of the initiation of the Corporate Insolvency Resolution Process in terms of Section 13(1)(b) of the 'Code' read with Section 15 calling for the submission of claims against 'Corporate Debtor'. 3. The Insolvency Resolution Professional (Applicant) visited the site of the Corporate De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... graphs were also captured. Copy of the visit report signed by the above persons and video CD of the visit are attached as Annexure-8. 6. The detailed information of the further visits of the premises has also been furnished suggesting that there was no co-operation from the respondents. There was even non-cooperation from the Statutory Auditors. The progress reports in this regard and the emails sent to the statutory auditors have also been annexed. In order to get control of the premises, the Applicant deputed Mr. Naresh Dhanuka for locking the factory premises but he was stopped by the Security Guard who introduced himself as an employee of the Corporate Debtor. 7. It is further highlighted that the Applicant got a phone call from Mobile No.+91 9501511455 by a fellow claiming to be a Police man from Ludhiana police station stating that a complaint has been lodged against the Applicant. The Applicant has also filed progress reports of the events which are at Annexures 12 and 13, The aforesaid incident was also informed to the Financial Creditors, i.e., both the Banks. 8. The Applicant received email (Annexure 14) dated 04.08.17 from R-2 wherein it is stated that the Appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofessional (IRP) is dated 17.08.2017 but the affidavit in support of the application is on 11.08.2017. When the matter was listed on 25.08.2017 it was submitted by the authorised representative on behalf of the Applicant that the application in fact was initially prepared on time but due to certain objections the same was dated 17.8.2017 and was filed at a later date. The Applicant was therefore directed to file fresh affidavit in support of the application. The Applicant filed the affidavit on 29.08.2017 along with additional documents. The applicant filed more documents on 04.09.2017 along with fresh affidavit of the applicant attested on 28.08.2017 in support of CA No.122/2017. It was contended that the fresh affidavit has been filed on 04.09.2017 as the affidavit filed earlier with the documents on 29.08.2017 was not the attested affidavit. With the aforesaid compliance, the contention of the respondent to challenge maintainability of the application on technical ground stands repelled. 12. On merits it was stated in the reply that the respondent and its personnel only objected to the illegal action of the Applicant who was acting in excess of the jurisdiction conferred on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness Standard' (English) Chandigarh Edition and not in Ludhiana Edition and with regard to the publication made in 'Rojana Spokesman' the regional language i.e. Punjabi the same is not in wide circulation in Ludhiana. Further the term of IRP has expired on 19.8.2017 and there is no application for extension of his term as such. Further the IRP has appointed two registered valuers but M/s Gats Financial Reconstructs Limited which was earlier de-panelled by the State Bank of India on 29.06.2011 and the order of the State Bank of India was challenged in CWP No.24151 of 2011 before the Hon'ble High Court of Punjab and Haryana but that petition was dismissed Copy of the order of Hon'ble High Court in Gats Financial Reconstructs Ltd. v. Union of India CWP No.24151 of 2011 dated 29.05.2017 is at Annexure A-3. Mr. Ashwini Kumar Prabhakar aforesaid has also filed CA No. 124/2017 for being impleaded as an Intervener. 17. The Applicant (IRP) has filed joint reply to both these applications filed on behalf of the proposed Intervener. It is contended that the Applicant has acted to the best of his ability in the manner explained in the reply. 'Business Standard' ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up the call. Detailed reply has been given to the rest of the allegations. The Applicant also filed additional documents with index dated 22.08.2017, 29.08.2017 and 04.09.2017. 20. Authorised Representatives of the Applicant and learned counsel for Mr. Ashwini Kumar Prabhakar have been heard and the record carefully perused. 21. The facts of the case would clearly reveal absolutely non-co-operative attitude of the key managerial personnel of the Corporate Debtor who should have assisted the Interim Resolution Professional in the performance of his time bound duties. 22. The basic point in issue was whether the Applicant as an Interim Resolution Professional can function as such after the expiry of his original term of appointment which was for 30 days.. Sub-section 15 of Section 16 of the Code says that the term of the IRP shall not exceed 30 days from his date of appointment which expired on 19.08.2017 and it is contended that there is no extension to his functioning as such. It was further contended that Committee of Creditors was admittedly constituted on 04.08.2017 and first meeting of Committee of Creditors was supposed to be held within 7 days therefrom in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application under sub-section (2), if the Adjudicating Authority is satisfied that the subject matter of the case is such that corporate insolvency resolution process cannot be completed within one hundred and eighty days, it may by order extend the duration of such process beyond one hundred and eighty days by such further period as it thinks fit but not exceeding ninety days: Provided that any extension of the period of corporate insolvency resolution process under this section shall not be granted more than once. 25. Even the judgments passed under the Rent Control Act or Tamil Nadu Rent Recovery Act cannot be made applicable to the case in hand. Learned counsel in that regard relied upon the judgements of Hon'ble Supreme Court of India in Nasiruddin v. Sita Ram Agarwal Civil Appeal No.5077 of 1998 decided on 28.01.2003; E. Palanisamy v. Palanisamy (D) Civil Appeal Nos. 501-502 of 2001 decided on 31.10.2002; and Tahsildar. Taluk Office, Thanjore v. G. Thambidurai Civil Appeal No.6435 of 2017, dated 09.05.2017. Hon'ble Supreme Court held in Naziruddin (supra) which was a case under Rajasthan Premises (Control of Rent and Eviction) Act. 1950 that use of the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 16.08.2017 sent to both the Financial Creditors and the directors of the Corporate Debtor as at page-10 of the documents dated 22.08.2017. There is also an email on this page dated 19.08.2017 sent by the Applicant to Chief Manager of Canara Bank and copy to Bank of Maharashtra that as requested the meeting of the Committee of Creditors was postponed to 28.08.2017 from 26.08.2017 and the revised agenda of the meeting was also sent. In another email of even date at page-11 of the documents written to both the Banks, the Applicant had expressed that the information is not being supplied by the Corporate Debtor and they are not responding to the phone calls nor to the letters or emails being sent relentlessly from the date of his appointment as IRP. It is also stated that as per the portal of MCA, the financials of the company for the last two years are not available. He has also expressed in this mail the police action threat followed by legal action given by the director of the corporate debtor vide email dated 07.08.2017 to stop him from the efforts. It is also indicated to the Financial Creditors that despite hardship the Applicant had been in constant touch through emails, ph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be quorate if members of the committee representing at least thirty three percent of the voting rights are present either in person or by video conferencing or other audio and visual means: Provided that the committee may modify the percentage of voting rights required for quorum in respect of any future meetings of the committee. (2) Where a meeting of the committee could not be held for want of quorum, unless the committee has previously decided otherwise, the meeting shall automatically stand adjourned at the same time and place on the next day. (3) In the event a meeting of the committee is adjourned in accordance with sub-regulation (2) the adjourned meeting shall be quorate with the members of the committee attending the meeting. 32. Accordingly, the meeting was scheduled for 29.08.2017 at 12 O'clock in the noon at the venue mentioned in the minutes of the meeting. 33. The above facts are self-explanatory reflecting as to under what stressful and difficult circumstances the Applicant is working and facing an uphill task. With the additional documents filed on 04.09.2017 by the authorised representative of the Applicant supported by an affidavit of Interi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 16. However, as the Regular resolution professional starts functioning on completion of period of Interim resolution professional the performance of the duties of Interim resolution professional cannot be held to be mandatory though the period is required to be counted for completion of the interim resolution process i.e. 180 days and in appropriate case another 90 days can be granted, i.e., maximum 270 days which is mandatory. 38. With regard to the contention that the advertisement was not published in the newspapers with wide circulation in the locality where the office of the Corporate Debtor is situated, learned counsel for the Intervener referred to the list of the highly circulated newspapers prepared by Audit Bureau of Circulations which shows that the name of 'Business Standard' (English) newspaper does not figure and with regard to the Punjabi newspaper, the highest circulation is in dailies 'Ajit' and 'Jag Bani'. 39. I am of the clear view that the Intervener has no locus standi to raise this issue especially when there is a total non-co-operative attitude on his part I am of the view that it is not required that such an advertisement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17 for intervention would also stand disposed of. 43. However, before passing further directions it would be appropriate to deal with the kind of serious situation that has arisen in this case. It is submitted on behalf of the Applicant that in exercise of his duties to protect the assets of the Corporate Debtor, he wanted to lock the premises so that these are not removed. But on the objections being raised on behalf of personnel of the Corporate Debtor the premises was not locked. In these circumstances, it becomes a matter of concern as to how police can intervene in the functioning of the Applicant appointed by this Tribunal by giving him a call while he was present at the spot. 44. The contention that the IRP has exceeded his authority in calling for the information relating to the books of accounts for the past four financial years that is hardly a ground, which can be raised by the intervener to dispute the functioning of the IRP as the Corporate Debtor could in any case provide the financial statements for the last two years instead of four years and not to challenge the authority of the Interim Resolution Professional on that ground. It is neither the case of the int ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
