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2019 (6) TMI 639

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..... not open to the Appellant- ‘Edelweiss Asset Reconstruction Limited’ to invoke the guarantee (Corporate Guarantee). The ‘Resolution Professional’ has rightly not accepted the claim of the Appellant- ‘Edelweiss Asset Reconstruction Limited’ and the Adjudicating Authority has rightly rejected the application filed by the Appellant- ‘Edelweiss Asset Reconstruction Limited’ for accepting its claim. The rejection of the claim for the purpose of collating the claim and making it part of the ‘Resolution Plan’ will not affect the right of the Appellant- ‘Edelweiss Asset Reconstruction Limited’ to invoke the Bank Guarantee against the ‘Corporate Debtor’ in case the ‘Principal Borrower’ failed to pay the debt amount, the ‘Moratorium’ period having come to an end. Appeal dismissed. - Company Appeal (AT) (Insolvency) No. 437 of 2018, I.A. No. 1830 of 2018 With Company Appeal (AT) (Insolvency) No. 438 of 2018 With Company Appeal (AT) (Insolvency) No. 444 of 2018 With Company Appeal (AT) (Insolvency) No. 500 of 2018 - Dated:- 23-4-2019 - Mr S. J. Mukhopadhaya, Chairperson And Bansi Lal Bha .....

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..... on Memorandum. The last date of the submission of the Resolution Plan was 10th April, 2018, and the Appellant- Edelweiss Asset Reconstruction Company Limited submitted its Resolution Plan which was not considered properly. 6. The stand of the Resolution Professional was that in the second round of bidding, on 13th April, 2018, Edelweiss Asset Reconstruction Company Limited was scored as last and was declared as 3rd Highest and Ghanashyam Mishra & Sons Private Limited as 1st Highest Resolution Applicant . 7. Another application under Section 60(5) was filed by the Edelweiss Asset Reconstruction Company Limited on the ground that the Resolution Professional is not admitting the claim of Edelweiss Asset Reconstruction Company Limited . So also, the Appellant raised objections in approving the Resolution Plan submitted by Ghanashyam Mishra & Sons Private Limited . 8. Another application was filed by the District Mining Officer, Department of Mines and Geology, Jharkhand under Section 60 (5) of the I&B Code challenging the non-admission of its claim to the tune of ₹ 93,51,91,724/- and ₹ 760.51 Crores as per Form B submitted before the Resolution Professional . Th .....

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..... letters about the loan, more particularly dated 3rd January, 2018 and 4th January, 2018, the assignment of debt along with its underlying securities, including the Corporate Guarantee dated 5th December, 2014 by Orissa Manganese Minerals Limited - ( Corporate Debtor ) and requested him to bring the aforesaid fact to the knowledge of Resolution Applicants / bidders in Orissa Manganese Minerals Limited - ( Corporate Debtor ). 15. Further, the case of the Appellant- Edelweiss Asset Reconstruction Limited is that the proof of claim under Form C was filed for a sum of ₹ 648,89,62,395/- along with supporting documents on 6th January, 2018 which was received by the Resolution Professional . However, the Resolution Professional vide email dated 8th January, 2018 enquired about the invocation of the Corporate Guarantee of Orissa Manganese Minerals Limited - ( Corporate Debtor ) by the Appellant, placing reliance upon the order passed by the Adjudicating Authority in the case of Axis Bank vs. Edu Smart Services Limited . 16. The grievance of the Appellant is that the claim of the Appellant was not taken into consideration by the Resolution Professional because of non-invocation of the .....

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..... ken into account; (h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a bank or financial institution; (i) the amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in sub-clauses (a) to (h) of this clause; 19. In terms of Section 5(8)(h), any counter-indemnity obligation in respect of a guarantee also comes within the meaning of financial debt , therefore, the Appellant- Edelweiss Asset Reconstruction Limited on the basis of such guarantee can technically claim to be a Financial Creditor within the meaning of Section 5(7). 20. Section 3(6) defines claim whereas Section 3(11) defines debt : 3(6) claim means- (a) a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured; (b) right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured 3(11) "debt means a liability or oblig .....

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..... Limited to invoke the Bank Guarantee against the Corporate Debtor in case the Principal Borrower failed to pay the debt amount, the Moratorium period having come to an end. Company Appeal (AT) (Insol.) No. 444 of 2018 29. In this case, the grievance of the Appellant- Edelweiss Asset Reconstruction Limited is that the Resolution Plan submitted by it has been wrongly held to be lower than the Resolution Plan of Ghanashyam Mishra & Sons Private Limited ( Successful Resolution Applicant ). 30. It is a settled law that the Committee of Creditors are expert in financial matter and they are competent to decide the viability, feasibility and the financial matrix of the Resolution Plan . The Adjudicating Authority or this Appellate Tribunal cannot sit in appeal to find out the viability, feasibility and the financial matrix of such Resolution Plan except in cases where: i. The Resolution Plan is not in accordance with Section 30(2); or ii. If the Resolution Plan is discriminatory; or iii. The Resolution Applicant is ineligible in terms of Section 29A or any other ground. 31. In the present case, the Adjudicating Authority at the instance of the Appellant- Edelweiss Asset Reconstruction .....

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..... their hard earned wages and statutory dues as per the Constitution of India, Labour Laws and I&B Code . 34. Their grievance is that the Resolution Professional vide order dated 8th March, 2018, stated before the Adjudicating Authority that they have engaged around 1000 workers for its mining operations and still after admitting the above fact and knowing about existence and hardship of these workmen, the Resolution Professional has chosen to completely ignore their rightful wages, statutory dues and other benefits under the Corporate Insolvency Resolution Process . 35. The case of the Appellant is that these 1476 workers are working for the Corporate Debtor for a long period of time and there have been various agreements entered into between the Corporate Debtor and the Appellant over the years thereby showing continuity of work, which is evident from the Settlement/Agreement dated 23rd May, 2007, 24th September, 2008 and 19th September, 2009. Subsequently, another Settlement dated 5th June, 2015 was entered into between the management of the Corporate Debtor and the Appellant and the said Settlement specifically provides that the continuity of service of the workmen will be m .....

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..... withstanding anything contained in the Limitation Act, 1963 (36 of 1963) or in any other law for the time being in force, in computing the period of limitation specified for any suit or application by or against a corporate debtor for which an order of moratorium has been made under this Part, the period during which such moratorium is in place shall be excluded. 42. From the aforesaid provisions, it is clear that after period of Moratorium it is open to the person to move before a Civil Court or to move an application before the Court of Competent Jurisdiction against the Corporate Debtor . 43. In the present case, since it is not possible either for the Adjudicating Authority or for this Appellate Tribunal to give any specific finding, we are of the view that the Appellant may move before the Civil Court or Court of Competent Jurisdiction and may file an application before the Labour Court for appropriate relief in favour of the concerned workmen or against the Corporate Debtor if they have actually worked and have not been taken care in the Resolution Plan due to lack of knowledge and non-filing of the claim within time. 44. According to Appellant- Mr. Deepak Singh, he has joine .....

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..... ction 61. 61. Appeals and Appellate Authority ─ ……..(3) An appeal against an order approving a resolution plan under section 31 may be filed on the following grounds, namely:- (i) the approved resolution plan is in contravention of the provisions of any law for the time being in force; (ii) there has been material irregularity in exercise of the powers by the resolution professional during the corporate insolvency resolution period; (iii) the debts owed to operational creditors of the corporate debtor have not been provided for in the resolution plan in the manner specified by the Board; (iv) the insolvency resolution process costs have not been provided for repayment in priority to all other debts; or (v) the resolution plan does not comply with any other criteria specified by the Board. 51. In the present case, as no ground has been made out in terms of subsection (3) of Section 61 of the I&B Code and the decision of the Resolution Professional was not challenged by the Appellant, no relief can be granted. However, this order will not come in the way of the Appellant to move before appropriate forum for appropriate relief if the claim is not barred by limi .....

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