TMI Blog2017 (10) TMI 1065X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion, a viable solution is to give the preference to the decision taken by the largest percentage in voting rights of the Financial Creditor(s). Resultantly, the Miscellaneous Application is allowed and appointment of Mr. Rajendra M. Ganatra as Insolvency Professional is hereby approved. - MA NO. 362/2017 IN CP NO. 1132/I & BC/NCLT/MB/MAH/2017 - - - Dated:- 15-9-2017 - MR. M.K. SHRAWAT AND MR. BHASKARA PANTULA MOHAN, JJ. For The Appearing Parties : Rashid Boatwala, Ms.Suchitra Valjee, Rashi Agarwal, Vinay Deshpande, Nikkil Rajani, Ganesh Khatal and Ami Jain, Advs. ORDER M.K. Shrawat, Member - (Judicial) An application has been moved on 24.08.2017 (MA No. 362/2017) by a Financial Creditor viz. M/s. Edelweiss Asset Reconstruction Company Limited seeking following relief:- In these circumstances, it is, therefore, most respectfully prayed by the Applicant that this Hon'ble Tribunal may be pleased to:- (A) Appoint Mr. Rajendra Ganatra (Registration No. IBBI/IPA-003/IP-N00049/2017-18/10363) enrolled with the Indian Institute of Insolvency Professionals of ICAI as Insolvency Professional, as the RP of Respondent No. 1; (B) pass such furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oing Business of the Debtor Company should not get effected. 8. On perusal of the bifurcation of the remuneration and expenses of the IRP and Company Secretary, it appears that the Professional Fees is reasonable for the time being but subject to revision depending upon the progress or out come of the Insolvency Resolution Process. 3. In compliance of the directions of the said order, IRP Mr. U.V.G. Nayak has placed on record a compliance report dated 12.09.2017. In the compliance report it is informed that a second meeting of the Committee of Creditors (CoC) was convened on 11.09.2017 and the agenda put up for voting, as informed in the report, was as under:- Item No. Matters for voting 1 To take note of and approve the remuneration and expenses incurred on or by the IRP including that on professional advisors which shall constitute the Corporate Insolvency Resolution Process costs till the date of the first meeting i.e. 8.8.2017 2 To appoint the IRP, Mr. U.V.G. Nayak, Chartered Accountant/Insolvency Professional, as the Resolution Professional a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pleaded that the creditors are as many as 12 (approx.) in number, who have voted in favour of Mr. Nayak, although having lesser percentage (31.50 %) of voting right. According to the argument, the number of Financial Creditors were more in favour of continuance of the present IRP Mr. Nayak hence the application deserves to be rejected. According to her on the last occasion when the meeting was convened the number of creditors were in favour of Mr. Nayak. On the other hand, the name of Mr. Ganatra was supported by only two Financial Creditors i.e. Edelweiss and IFCI. The result of the Resolution should be based upon democratic pattern, hence the number of hands in favour of the IRP should be approved. The say of only two persons as against the say of rest of the ten persons should be overruled because such a Resolution is undemocratic. Further adding in the argument it is pleaded that the suggestion of this democratic method is the only viable method specially when the percentage method had failed or not arrived at a final conclusion. 7. On the other hand, from the side of the Financial Creditor , Learned Counsel has drawn our attention on the 'objects reasons' of en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that the term may or shall whether to be mandatory or directory is to be decided after examining the intent of the Legislature. The case laws cited are :- 1. Bachahan Devi And Another Vs. Nagar Nigam, Gorakhpur And Another, reported in (2008) 12 Supreme Court Cases 372, Relevant Paras 18 to 21, 2. Sarla Goel And Others Vs. Kishan Chand, reported in (2009) 7 Supreme Court Cases 658. 7.2 Learned Counsel has also drawn our attention on an order of NCLT, Kolkatta Bench dated 9.3.2017 in the case of Edelweiss Asset Reconstruction Company Limited acting in its capacity as trustee of EARC Trust SC 44 and 116 having its office at Edelweiss House, Off. CST Road, Kalina, Mumbai- 400 098 v. Sree Metaliks Limited (under Insolvency Resolution Process) represented through Mr. S.M. Gupta, Interim Resolution Professional wherein the percentage of voting in favour of one of the IP was 67.27 per cent, hence the issue was that in the absence of requisite percentage of vote of 75 per cent whether the proposed name could be approved. It was held that the name of the said Professional was to be approved for the purpose of reference to Insolvency Board. The Learned Counsel has, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be given preference over the stake holders having nominal percentage of voting rights. Moreover, the term may used in this section has prescribed a jurisdiction to deal with the issue of percentage of voting share depending upon the facts and circumstances of a case. The case laws on this subject have already been cited supra wherein it is held that before taking any decision the intent of the Legislation is required to be analysed. After doing so, we are of the conscientious view that this dead lock has to be removed by approving the name of Mr. Rajendra M. Ganatra, whose consent is placed on record. A Professional who is familiar with the nature of business and knowledge of handling the Resolution Process is to be selected that too based upon the recommendation of the highest percentage of the Creditors. 8.2 The term voting share is duly defined in section 5(28) of The Code which says, means the share of the voting rights of a single financial creditor in the committee of creditors which is based on the proportion of the financial debt owed to such financial creditor in relation to the financial debt owed by the corporate debtor . A co-joint reading of section 5(28) and s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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