TMI Blog2018 (11) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... tion long before the filing of this application by the Financial Creditor before this Tribunal. The winding up petition was filed before the Hon'ble High Court at Calcutta on 16-09-2014 and it was admitted on 17-08-2015 and notice was issued and advertisement of winding up petition was caused in the newspaper in terms of the winding up order on 14-09-2015. That order of admission of winding up proceedings is still in force. Truly the Financial Creditor has got an order referred to earlier from the Hon'ble High Court for reissuing publication of advertisement relating to winding up in the newspaper. It is incorrect to say that the order of admission was recalled as submitted by the Ld. Counsel for the Financial Creditor. In view of the above said discussion, it is considered view that applicable filed by the Financial Creditor (SBI) under section 7 of the I&B Code is not maintainable - C.A. (IB) Nos. 510,669,688 AND 819/KB/2018 In C.P. (IB) No. 767/KB/2017 - - - Dated:- 10-10-2018 - JINAN K.R., JUDICIAL MEMBER For The Financial Creditor : Jishnu Chaudhury, Ajay Gaggar, Ms. Rakhi Purnima Paul, Advocates For The Corporate Debtor : Abhrajit Mitra, Sr. Adv., D.N. Sharma, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company can have their say in the post-advertisement stage. The applicant further submits that if this Tribunal proceeds to hear the insolvency petition filed on December 20, 2017, the same will be rendered infructuous as the winding up petition has already been admitted long back on August 17, 2015. 5. The applicant further states that jurisdiction is with the Hon'ble High Court at Calcutta in the pending winding up proceeding to deal with the affairs of the Corporate Debtor and unless the petition pending before the High Court is finally decided, there cannot be a parallel proceeding continuing before this Hon'ble Tribunal. Therefore, the applicant insists that the financial creditor (SBI) is not entitled to and should not be permitted to proceed with the present IBC application, and prays that the instant insolvency petition be dismissed, or in the alternative, be stayed/adjourned. 6. CA(IB) No. 669/KB/2018 has been filed by the very same applicant in CA(IB) No. 688/KB/2018 (Lakhotia Transport Company Pvt. Ltd.) for seeking an adjournment/stay of the hearing of CP(IB) No. 767/KB of 2017, to ensure that there is no conflict between the orders passed by the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the winding up petition before the Hon'ble High Court. 8. The Financial Creditor filed reply affidavits in all CAs except in CA 819 of 2018. The contentions are similar in nature and hence not dealt with separately. It is in brief as the following:- 9. The Financial Creditor submits that it has filed an application under Section 7 of the I B Code, 2016 against the Corporate Debtor for default caused by the Corporate Debtor in making payment of the financial dues of the Financial Creditor amounting to ₹ 1082 crores. The financial creditor denies and disputes the allegations contained in the application and submits that since Section 7 of the I B Code is clear that no person other than the financial creditor and the corporate debtor has a right to be heard at the stage of admission of the Section 7 application, the applicant has no right of intervention in the present insolvency petition. 10. The financial creditor further submits that winding up proceedings filed before the Hon'ble High Court has two stages namely: First stage, wherein application for winding up is filed and the Hon'ble High Court may admit such application on reasonable grounds, di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the above referred CAs firstly came up for consideration. To resolve the controversy, the above said question was heard at length and an order in detail was passed by me on 06-08-2018 upholding the objections raised by the applicants, that their interim applications are to be heard before hearing the CP on its merit. It is good to read the operative portion of the order of this Bench dated 06-08-2018. It reads as follows:- Since question of maintainability of the application is under challenge it appears to me that before CP(IB) No. 767/KB/2017 is heard on merit the CA(IB) No. 510/KB/2018, CA(IB) No. 669/KB/2018 and CA(IB) No. 688/KB/2018 filed challenging the maintainability of the application is to be heard. Accordingly, the above CAs are to be listed for hearing by directing the respondents to file reply affidavit within 7 days by serving copy of the reply affidavit to the applicants in CP(IB) No. 767/KB/2017 and the applicants are directed to file rejoinder if any. 15. The above order of this Bench was not at all under challenge from the side of the financial creditor, who repeatedly pressed for hearing the CP(IB) No. 767/KB/2017 when this Interim Applications we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (the corporate debtor) to pay the entire amount inclusive of interest and costs within a fortnight from the date of the said order with further directions that in default of such payment, the petition would be advertised in the newspapers. 20. Aggrieved by the said order, the corporate debtor had preferred an appeal before the Hon'ble Division Bench of the Hon'ble High Court at Calcutta as A.C.O. No. 146 of 2015. The Hon'ble Division Bench stayed the operation of the order subject to a deposit of ₹ 50 Lakhs on 04/09/2015. The corporate debtor had failed to pay the above said amount as directed, and thereby the operational creditor issued advertisement of the winding up application. 21. In the meanwhile, the proceeding of the said winding up application (C.P. No. 822 of 2014) was stayed on the ground that the corporate debtor was referred to the Board of Industrial and Financial and Reconstruction (In short, BIFR) under the provisions of the Sick Industrial Companies (Special Provision) Act, 1985 (In short, SICA). By an order of the Hon'ble High Court at Calcutta, the hearing of the winding up application was adjourned sine die with liberty to the partie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Order. It reads as follows: The order impugned does not call for any interference. However, since the date for directing fresh advertisements to be published has passed, such directions are issued hereby. The petitioning creditor will cause advertisements to be published in the same newspapers in which the original advertisements had been published, indicating that the company petition will appear before the Company Court on the first available working day two weeks after the date of the publication. The publication of the advertisements has to be simultaneous in the newspapers on a date within two weeks from today. 25. A reading of the above said Order, what I understood is that the Order of admission of winding up Petition filed by the Lakhotia Transport Company Pvt. Ltd./Operational Creditor, was not at all recalled as submitted on the side of the Financial Creditor. On the other hand, the Hon'ble Division Bench of the High court at Calcutta has held that the order of admission of winding up application does not call for any interference but issued direction to issue fresh advertisement. So, the winding up proceeding as against the Corporate Debtor has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ording to him, the Financial Creditor is eligible under Section 7 of the Insolvency and Bankruptcy Code, 2016 to move an application of this nature and it is perfectly maintainable. 30. The Hon'ble Appellate Tribunal in the Unigreen Global Pvt. Ltd. has discussed in detail the question of entitlement of an Applicant coming under the purview of Section 11 of the Insolvency and Bankruptcy Code, 2016. The Hon'ble Appellate Tribunal discussing in detail the definition clause referring to liquidation order and winding up has held that (para 31) By aforesaid amendment, the legislators have made it clear that the word winding up mentioned in the Companies Act, 2013 is synonymous to the word liquidation as mentioned in the Insolvency and Bankruptcy Code. At this juncture it is also good to read Para 32. It reads as: In view of the provisions aforesaid, we hold that if any winding up proceeding has been initiated against the Corporate Debtor by the Hon'ble High Court or Tribunal or liquidation order has been passed, in such case, the application under Section 10 is not maintainable. However, mere pendency of a petition for winding up where no order of winding u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thus stands initiated, where is the question of filing an application under sections 7 or 9 or initiation of Corporate Insolvency Resolution Process, which, on failure ultimately culminates into liquidation proceedings (winding up proceedings)? The argument can be that once second stage i.e. Liquidation (winding up) proceedings has already initiated, the question of reverting back to the first stage of 'Corporate Insolvency Resolution Process' or preparation of Resolution plan does not arise. One can appreciate such stand which can be decided in an appropriate case, but such issue being not involve in the present case, we are not deciding the issue aforesaid. It is left open to be decided in other appropriate case. 34. A reading of the above cited order of the Hon'ble Appellate Tribunal, it appears to me that the Corporate Debtor here in the case undergoing winding up proceedings and winding up petitions being already admitted and the Hon'ble High Court has not transferred the winding up proceeding before the NCLT, all the Creditors are bound to join in the winding up proceedings so as to make their claims in the said proceedings. It was submitted on the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up were not transferred to the NCLT and after coming into force of the IBC, 2016, the basic rule of not having multiplicity of the proceedings shall continue to be the guiding principle. It would be a dangerous situation if the applicant ALCHEMST is all owed to proceed before IBC while the other creditors are before this Court and say after six months that is the maximum period during which the proceedings can continue under the IBC, this Court also appoints an OL to examine the claims of other parties. However, as the present petition is not a petition by creditors alone and is a case referred to this Court under Section 20(1) of the erstwhile SICA Act, the order passed by the NCLT relating to only one creditor treating the present petition as the petition under Section 433(e) is wholly misconceived. A look at third proviso to Rule 5 also clarifies the picture further as it specifically provides that if there another petition required to be filed under section 433(e), the same would continue with the High Court and would not be transferred. Thus, the basis as noted above, continues that there ought not be multiplicity of the proceedings. 38. Expressing the above said view t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith a winding up proceeding in which it has clear jurisdiction to hear and decide. That is the effect of Section 41(b) of the Specific Relief Act, 1963, particularly when the IBC itself permits such continuation under the notifications issued under Sections 239 and 255 of the IBC. 24. The principle of Comity of Courts cannot be invoked to restrain the High Court from proceeding with a winding up petition which Parliament intended the High Court alone to decide as per the notifications issued under Sections 239 and 255 of the IBC. Since this winding up petition did not get transferred to the NCLT by virtue of the notifications dated 7.12.2016 and 29.6.2017 issued under the very IBC, the NCLT cannot have any jurisdiction in regard to the petitioner or to the winding up petition and it's order cannot be interpreted to restrain this Court. 40. The Hon'ble Principal Bench, NCLT, New Delhi , in Nauvata Engineering (P.) Ltd. v. Punj Llyods Ltd. [(IB) 217(PB)/2017, dated 19-7-2017] also has taken the very same view that where winding up proceedings are pending against the Company, then it would not be conducive for the Tribunal to trigger Insolvency process against that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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