TMI Blog2019 (3) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... t is punishable under section 77 (a) of the Insolvency and Bankruptcy Code 2016. The Registrar of Companies, Mumbai is directed to lodge prosecution against the corporate applicant under section 77(a) of the insolvency and bankruptcy code in 2016. Since the petition has been filed under section 10 of the Insolvency and Bankruptcy Code 2016 after the suppression of the material facts, which were known to be material, therefore the petition is rejected with cost ₹ 10 lakhs which shall be paid by the Corporate Applicant. The cost will be deposited in the account of the Prime Ministers National Relief Fund. It is to be clarified that by the order dated 25.1.2017 of Hon’ble Bombay High Court, the Corporate Applicant stands wound up and the Ofifical Liquidator has already been directed to expedite process of liquidation expeditiously. - MA NO. 524 of 2018 And CP(IB) NO. 1053 (MB) OF 2017 - - - Dated:- 29-1-2019 - MR V.P. SINGH, JUDICIAL MEMBER AND AND RAVIKUMAR DURAISAMY, TECHNICAL MEMBER For The Appearing Parties : Shavey Mukri, Nishitha Manbiar, Almira Lasrado, Ashish, Priyanak Upadhyaya, Sugyata Choudhary, Nikhil Rajani, Ms. Jyoti, Bhupesh V. Samant, Ganesh Kale, S. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to the notification of the SICA Repeal Act,2003. As per Section 4(b) of the Sick Industrial Companies (Special Provisions) Repeal Act, 2003, as amended by Section 252 read with Schedule VIII of the Insolvency and Bankruptcy Code, 2016 (IBC), a company in respect of which such appeal or reference or inquiry pending before AAIFR or BIFR stands abated, may make reference to the National Company Law Tribunal under IBC within 180 days from commencement of IBC, without payment of fees in accordance with the provisions of IBC. Copy of last AAIFR order dated 07.11.2016 in the matter of Amar Remedies Limited is enclosed as Annexure - 17. 4. Since the company Petition is filed u/s 10 of the I B Code, 2016 by the Corporate Applicant, without disclosing the material fact, known to be material, regarding the order of the Hon ble High Court, whereby the corporate debtor, i.e. Company was wound up, and the Petitioner was directed to file Affidavit of claim before Official Liquidator, this Tribunal passed the following order.- After winding up of the company, this Petition was filed by the Corporate Applicant u/s. 10 of the Code, after suppressing the material facts, without disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the aforesaid act of the Corporate Debtor was pursuant to the legal remedy and the right which was duly exercised as provided to the Corporate Debtor by the statute (both under the Repeal Act and the IBC) It is further contended by the Corporate Applicant that at the time when the application was made by the Corporate Debtor, the procedure of the NCLT was in infancy stage and the From 6 requested for specific information which was duly provided. Form 6 did not prescribed or require the applicant/corporate Debtor to furnish any additional information nor was any procedure/requirement pointed out by the office of NCLT which mandated the Corporate Debtor to submit any additional information. The fact that the Corporate Debtor was before BIFR and SICA and the proceeding before the AAIFR were duly brought to the knowledge of this Tribunal in view of the requirements of Form 6. The information required in Form 6 in turn referred in the proceeding of SICA. The proceeding before BIFR/AAIFR mentioned the factum of the winding up order passed against the Corporate Debtor and the reference made to BIFR/AAIFR after the order of winding up dated 27.8.2014 have been passed by the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed by the Hon ble High Court by order dated 27.8.2014 and the Corporate Debtor was ordered to be wound up. The RP also contends that he has submitted a report dated 9.12.2017 before the Hon ble Tribunal stating the fact of winding up order dated 25.1.2017. It is also mentioned in the minutes of 2nd CoC meeting dated 17.11.2017 stating that Mr Sagar Pravin Shah, erstwhile Mg. Director of the Corporate Debtor was also present at the meeting, who was asked to explain the matter of the liquidation order. 9. In reply to our Notice, the ICICI Bank has filed Affidavit stating that there was no intentional concealment of facts relating to the pendency of winding up proceedings of the Corporate Applicant. ICICI Bank was under a bonafide belief that Resolution Professional had informed the Hon ble Tribunal about the pendency of the winding up proceeding against the Corporate Applicant. 10. The Financial Creditor the IDBI Bank, the member of CoC, filed Affidavit in response to our notice stating that present Financial Creditor had initiated winding up proceedings against the Corporate Debtor in the Hon ble Bombay High Court vide C.P. No.26 of 2013, and Hon ble High Court vide order da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red Creditor and the Saraswat Co-op Bank Ltd., the Secured Creditor, took the stand that in case of Murli Industries Ltd. v. Primo Pick N Pack (P.) Ltd. [2019] 151 SCL 233 (Bom.) in CA 10/2017 in CP No.6/2012 the Hon ble Bombay High Court has held that the action of resolution process during the pendency of winding up proceedings is logical and possible. The Bank of Maharashtra, the Secured Creditor, has also filed an Affidavit. 14. The sequence of events as narrated by the Resolution Professional Mr Anil Goel, and further by the Members of CoC in respect of non submission of information relating to the order of winding up and liquidation passed by the Hon ble High Court shows that they had no role in suppressing the material fact of winding up and liquidation order by the Hon ble High Court. 15. We have heard the arguments of the Ld. Counsel representing the Resolution Professional; Counsel representing CoC and the Counsel representing the Corporate Applicant and perused the records. On perusal of the records, it is clear that IDBI Bank, a Member of Financial Creditor had initiated the winding up proceedings against the Corporate Debtor, bearing CP No.26 of 2013. IDBI Bank h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B Code for initiation of CIRP. 19. It is further stated that the RP appeared before the Tribunal on 11.12.2017 and filed a report dated 8.12.2017, Exhibit - M. 20. On perusal of the said documents, it appears that this Tribunal was informed by IDBI Bank, Gen. Manager that despite the liquidation order passed by the Hon ble High Court Dt. 25.1.2017 the Corporate Debtor, knowingly obtained Admission order under I B Code, 2016. It is also clear from the Order sheet dated 8.12.2017 that the RP was stopped by this Tribunal to carry out the functions of this Company as an IRP until he makes his report before this Bench. The RP was not present on the day of order, but the Counsel representing the Corporate Debtor was present in the Court, and his presence is noted in the order sheet. 21. The Financial Creditor has further stated that he has always been diligent in intimating the concern about the winding up order with the Members of CoC and RP and to this Tribunal. On perusal of the reply of IDBI Bank, it is clear that IDBI Bank as a member of CoC, has at every stage of the CIRP proceedings was informing to the members of CoC and RP. The RP has also circulated amongst the members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion the Rule 10 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 provides that: 10. Filing of application and application fee Xxx xxx xxx (2) An applicant under these rules shall immediately after becoming aware, notify the Adjudicating Authority of any winding-up petition presented against the corporate debtor. Xxxx xxxx xxxx Thus it is clear that the law requires disclosure of winding-up petition immediately once the applicant becomes aware of it. 25. It is further important to point out that the provisions of Section 77 of I B Code 2016 provide that: 77. Punishment for providing false information in application made by corporate debtor.- Where- (a) a corporate debtor provides information in the application under Section 10 which is false in material particulars, knowing it to be false and omits any material fact, knowing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s) Repeal Act, 2003, as amended by Section 252 read with Schedule VIII of the Insolvency and Bankruptcy Code, 2016 (IBC), a company in respect of which such appeal or reference or inquiry pending before AAIFR or BIFR stands abated, may make reference to the National Company Law Tribunal under IBC within 180 days from commencement of IBC, without payment of fees in accordance with the provisions of IBC. Copy of last AAIFR order dated 07.11.2016 in the matter of Amar Remedies Limited is enclosed as Annexure - 17. 29. It is pertinent to mention that corporate debtor has not mentioned anything about the order of the Hon ble High Court, Bombay, dated 25.1.2017 passed in company application no. 7/2015. In the said case Hon ble High Court passed the following order: 1. Official Liquidator s report not on Board. Taken on Board. 2. Ld. Counsel for the respondent states that the proceedings before AAIFR stand abated. The Respondent Company is already wound up. 3. In view of the admitted facts, the Official Liquidator is directed to proceed with the procedure of winding up of the respondent company expeditiously. The Petitioner is at liberty to file affidavit of clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are of the fact that company, i.e. Amar Remedies Ltd stands wound up by order of the Hon ble High Court dated 25th Jan 2017, and Official Liquidator was directed to proceed with the procedure of winding up of the respondent company expeditiously. The said fact was beyond an iota of doubt material fact for the presentation of the petition under Sec 10 of the Code. The Ld counsel appearing on behalf of the Corporate debtor emphasized on the law laid down by Hon ble Supreme Court in the matter of Rishabh Agro Industries (P.) Ltd. v. PNB Capital Services Ltd. [2000] 25 SCL 461 and Madura Coats Ltd. v. Modi Rubber Ltd. 136 SCL 502 (SC) and also in Real Value Appliances Ltd. v. Canara Bank [1998] 16 SCL 445 (SC). It is further stated that as the winding up order was passed by the Hon ble High Court and Official Liquidator was appointed to take over the control and management of the Corporate Debtor, the Board of Directors of the Corporate Debtor, pursuant to the law laid down by Hon ble Supreme Court proceeded to file the reference with BIFR which was duly registered as Case No.55 of 2014. The said reference was rejected by Hon ble BIFR vide order dated 22.9.2014, and same was challenged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the I B Code. We are only examining whether the petitioner, i.e. corporate applicant has filed the petition suppressing the material facts, which were known to it as material. 34. The Hon ble Supreme Court in Civil Appeal No. 818/2018 in case of FORECH India Ltd. v. Edelweiss Assets Reconstruction Co. Ltd. has held that section 11 of the code specifies which persons are not eligible to initiate proceedings under it. In particular, section 11 (d) reads as follows: 11. Persons not entitled to make application.- The following persons shall not be entitled to make an application to initiate corporate insolvency resolution process under this Chapter, namely- Xxxx xxxx xxxx (d) a corporate debtor in respect of whom a liquidation order has been made. This section is of limited application and only bars a corporate debtor from initiating a petition under section 10 of the Code in respect of whom a liquidation order has been made. From a reading of this section, it does not follow that until a liquidation order has been made against the corporate debtor, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
