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TMI Blog2017 (12) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... he Companies Act, 2013; (b) That this Hon'ble Tribunal be pleased to declare that the instant Company Petition filed by the Petitioner/Financial Creditor an abuse of process of the Tribunal pursuant to Rule 11 of the National Company Law Tribunal Rules, 2016; (c) That this Hon'ble Tribunal be pleased to pass appropriate orders under section 65 of the Insolvency and Bankruptcy Code, 2016 that the Petitioner/Financial Creditor has fraudulently or with a malicious intention instituted the instant Company Petition; (d) That this Hon'ble Tribunal be pleased to pass an order of mandatory injunction against the Petitioner/Financial Creditor to commence insolvency proceedings against Respondents No. 2 to Respondent No. 11 i.e. various entities in the Bhatia Group (comprising Bhatia Coke and Energy Limited, Bhatia Coal Washeries Limited, Bhatia Industries and Infrastructure Limited, Bhatia Sons (India) Limited, BCC Cargo Limited, BCC Enterprises (India) Limited, BCC Estates (P.) Limited, Reliance Services and Consultants Ltd., Associated Transport Company and Ishaar Overseas Pvt. Ltd.) and initiate legal proceedings against Respondent No. 12 to Respondent No. 21 the Bhatia Family (com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, UCO Bank, Union Bank of India, Oriental Bank of Commerce, The Hong Kong and Shanghai Banking Corporation Ltd, State Bank of Mysore, Indusind Bank Limited, HDFC Bank Limited, Standard Chartered Bank, Bank of Baroda, Bank of India, SBICAP Trustee Company Ltd.) to place on record all documents relating to the cross default available to them to move against any entity in the Bhatia Group including but not limited to Bhatia Coke and Energy Limited, Bhatia Coal Washeries Limited, Bhatia Industries and Infrastructure Limited, Bhatia Sons (India) Limited, BCC Cargo Limited, BCC Enterprises (India) Limited, BCC Estates (P.) Limited, Reliance Services and Consultants Ltd., Associated Transport Company and Ishaar Overseas Pvt. Ltd and all documents relating to the personal guarantees issued to the Bhatia Family including but not limited to Mr. Surinder Singh Bhatia, Mr. Gurvinder Singh Bhatia, Mr. Amandeep Singh Bhatia, Mrs. Veena Bhatia, Mrs. Gurvinder Kaur Bhatia, Mr. Manjeet Singh Bhatia, Mrs. Indrajit Kaur Bhatia, Ms. Ishipal Kaur Bhatia, Mr. Kulwant Singh Bhatia, GS Bhatia (HUF) for the debts of the Bhatia Group; (h) That this Hon'ble Tribunal be pleased to pass an order directing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty appointed Shri Nitin Hasmukhlal Parikh, Company Secretary as 'Interim Resolution Professional'. This Adjudicating Authority also granted moratorium under Section 13 of the Code for the purposes referred to in Section 14 of the Code. 3. It is stated in this Application that the Applicant on 17th January, 2011 obtained a London Arbitral Award against Asian Natural Resources (India) Limited for a sum of USD 68.43 Million in addition to cost of GBP 758,580 along with interest. The claim of the Operational Creditor against the Corporate Debtor is Rs. 529,18,40,254.65 in addition to interest @ 2% over LIBOR till realization. 4. Applicant/Operational Creditor filed Execution Application No. 240 of 2011 before Hon'ble Bombay High Court to enforce and execute the London Arbitral Award dated 17th January, 2011 against the property of the Corporate Debtor within the jurisdiction of the Hon'ble Bombay High Court which inter alia included the office premises situated at 101, Orbit Plaza at New Prabhadevi Road, Mumbai. The Corporate Debtor resisted the enforcement of the London Arbitral Award on the grounds enumerated in Section 48 of the Arbitration and Conciliation Act, 1996. The Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted business transfer agreements to transfer its trading, coke and washeries business undertakings as a going concern on a slump sale with BGTL, BCEL and BCWL at grossly insufficient consideration and/or a consideration with was an absolute eye wash; b. Certain officers in the Indore Branch of the IDBI Bank would turn a blind eye to the Corporate Debtor transferring the totality of its overseas assets of more than USD 83 Million held by one of its wholly owned overseas subsidiaries in Dubai - Ishaar Overseas Limited ("IOF") to another overseas subsidy Bhatia International Pte. Limited of Singapore ("BIPL") and diluted its stake in both companies Funds from BIPL would thereafter be fraudulently funnelled into BCEL. c. Certain officers in the Indore Branch of the IDBI Bank would turn a blind eye to the Corporate Debtor novating various purchase and sale contract for coal that it had with various suppliers and end users of coal to entities in the Bhatia Group such as BIIL. d. Certain officers in the Indore Branch would only look towards defunct entities such as BIL and BGTL to recover their dues but will wilfully chose not to proceed against Mr. SS Bhatia and Mr. GS Bhatia and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a positive net worth (total assets - total liabilities) of approximately Rs. 5.14 Crores, a copy of which is annexed as Annexure I to the Application; f. BCC Enterprises (India) Limited reveals that the company has a negative net worth (total assets - total liabilities) of approximately Rs. 14.88 Crores, a copy of which is annexed as Annexure J to the Application; g. BCC Estates (P.) Limited whose 2016 Balance Sheet reveals that the company has a positive net worth (total assets - total liabilities) of approximately Rs. 30.54 Crores, a copy of which is annexed as Annexure K to the Application; h. Reliance Services and Consultants Ltd., reveals that the company has a negative net worth (total assets - total liabilities) of approximately Rs. 26 Lakhs, a copy of which is annexed as Annexure L to the Application; i. Ishaar Overseas Pvt. Ltd, whose 2016 Balance Sheet reveals that the company has a positive net worth (total assets - total liabilities) of approximately Rs. 9.44 Crores a copy of which is annexed as Annexure M to the Application. 9. The aforesaid Companies collectively trade under the banner "Bhatia Group". The promoters, key management personnel, shareholders a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority by order dated 23rd May, 2017 appointed Interim Resolution Professional with a direction to him to commence Corporate Insolvency Resolution Process in respect of Asian Natural Resources (India) Limited, and consequentially granted moratorium under Section 13 of the Code prohibiting the purposes referred to in Section 14. 13. There is no dispute about the fact that Applicant is one of the Operational Creditors of Asian Natural Resources (India) Limited. Therefore the Applicant is entitled to file a claim before the Interim Resolution Professional in respect of Asian Natural Resources (India) Limited. 14. The first and foremost question that needs to be answered in this Application is whether this Application is maintainable under Section 60(5)(c) of the Code. 14.1 Section 60 of the Code deals with the jurisdictional aspect of the Adjudicating Authority, more so by sub-section (5) of Section 60. For the sake of ready reference, Section 60 sub-section (5) clause (c) is reproduced hereunder; "(5) Notwithstanding anything to the contrary contained in any other law for the time being in force, the National Company Law Tribunal shall have jurisdiction to entertain or dispose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubt, Sections 43 to 48 are in Chapter III which deal with liquidation process but not resolution process. Therefore, it may be argued that invoking of the above said Sections comes into picture only in case of commencement of liquidation process but not during resolution process. But Section 43 refers to Resolution Professional also. The question of forming an opinion by the Resolution Professional will arise only during the stage of Resolution Process. Therefore, Section 43 can be invoked. Even during Resolution Process or liquidation proceedings, if there is any grievance that pertains to preferential transactions, the Resolution Professional is entitled to move the Adjudicating Authority under Section 44, and the Adjudicating Authority is empowered to pass orders. Section 45 says about declaration of undervalued transactions by a Liquidator or Resolution Professional. In case of undervalued transactions, Section 47(1) of the Code enables a Creditor, in case Resolution Professional has not reported it to the Adjudicating Authority, to file an application. It is not stated in Section 47 that a Creditor should be a Financial Creditor or a Secured Financial Creditor. Section 47 give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions to the Financial Creditor(s) to commence insolvency proceeding against the associated companies or sister companies of the Corporate Debtor or against the guarantors of the Corporate Debtor. Moreover, it is stated by the Financial Creditor/IDBI that it has initiated insolvency proceedings against some of the guarantors which are in progress. 15(2) Coming to the relief (e), it is not within the jurisdiction of this Adjudicating Authority to pass any orders touching the other companies which are said to be the entities of Bhatia Group. 15(3) Coming to the relief (f), in view of the moratorium order passed by this Tribunal under Section 13 of the Code in respect of all the pending proceedings, the said relief cannot be granted during moratorium period. 15(4) Coming to the relief (g), the answering of this relief would arise only in case concerned Financial Creditors initiate insolvency resolution process against the guarantors of the Corporate Debtor. Therefore, the said relief cannot be granted in this Application. 15(5) Coming to the relief (h), the Interim Insolvency Resolution Professional/Resolution Professional shall take all reasonable steps to recover all the amounts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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