TMI Blog2019 (5) TMI 1667X X X X Extracts X X X X X X X X Extracts X X X X ..... 586 of 2019 - - - Dated:- 29-5-2019 - Justice S. J. Mukhopadhaya [Chairperson], Justice A.I.S. Cheema, Member (Judicial) AND Kanthi Narahari, Member (Technical) For the Appellant : Mr. Vddyam Mukherjee And Mr. Sabyasachi Chatterjee, Advocates, Mr. Manoj Swarup, Senior Advocate with Mr. Anish Roy, Advocate. For the Respondent : Appeared but attendance not marked. ORDER These Appeals have been preferred by the Appellant(s) Hindustan Paper Corporation Officers Supervisor Association Ors. and Cachar Paper Project Workers Union (INTUC) challenging order dated 2nd May, 2019 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench, whereby, order under Section 33 of the Insolvency and Bankruptcy Code, 2016 (I B Code) has been passed for liquidation of M/s Hindustan Paper Corporation Ltd. and Liquidator has been appointed. 2. Learned Counsel appearing on behalf of the Appellant(s) submitted that initiation of Corporate Insolvency Resolution Process was illegal as it was initiated by the person with malicious intents for the purpose other than the resolution of the insolvency or liquidation. Howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of India Ors. Writ Petition (Civil) No. 99 of 2018 by its judgment dated 25th January, 2019, observed as follows: 11. What is interesting to note is that the Preamble does not, in any manner, refer to liquidation, which is only availed of as a last resort if there is either no resolution plan or the resolution plans submitted are not up to the mark. Even in liquidation, the liquidator can sell the business of the corporate debtor as a going concern. [See ArcelorMittal (supra) at paragraph 83, footnote 3]. (Emphasis added) 12. It can thus be seen that the primary focus of the legislation is to ensure revival and continuation of the corporate debtor by protecting the corporate debtor from its own management and from a corporate death by liquidation. The Code is thus a beneficial legislation which puts the corporate debtor back on its feet, not being a mere recovery legislation for creditors. The interests of the corporate debtor have, therefore, been bifurcated and separated from that of its promoters /those who are in management. Thus, the resolution process is not adversarial to the corporate debtor but, in fact, protective of its interests. The morator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditors also can come forward with such an application. 7. Section 391 of the Companies Act, 1956 has since been replaced by Section 230 of the Companies Act, 2013, which is as follows: 230. Power to compromise or make arrangements with creditors and members (1) Where a compromise or arrangement is proposed- (a) between a company and its creditors or any class of them; or (b) between a company and its members or any class of them, the Tribunal may, on the application of the company or of any creditor or member of the company, or in the case of a company which is being wound up, of the liquidator appointed under this Act or under the Insolvency and Bankruptcy Code, 2016 as the case may be, order a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be, to be called, held and conducted in such manner as the Tribunal directs. Explanation.- For the purposes of this sub-section, arrangement includes a reorganisation of the company s share capital by the consolidation of shares of different classes or by the division of shares into shares of different classes, or by both of those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here the securities of the companies are listed, for placing on their website and shall also be published in newspapers in such manner as may be prescribed: Provided further that where the notice for the meeting is also issued by way of an advertisement, it shall indicate the time within which copies of the compromise or arrangement shall be made available to the concerned persons free of charge from the registered office of the company. (4) A notice under sub-section (3)shall provide that the persons to whom the notice is sent may vote in the meeting either themselves or through proxies or by postal ballot to the adoption of the compromise or arrangement within one month from the date of receipt of such notice: Provided that any objection to the compromise or arrangement shall be made only by persons holding not less than ten per cent. of the shareholding or having outstanding debt amounting to not less than five per cent. of the total outstanding debt as per the latest audited financial statement. (5) A notice under sub-section (3) along with all the documents in such form as may be prescribed shall also be sent to the Central Government, the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal necessary to effectively implement the terms of the compromise or arrangement: Provided that no compromise or arrangement shall be sanctioned by the Tribunal unless a certificate by the company's auditor has been filed with the Tribunal to the effect that the accounting treatment, if any, proposed in the scheme of compromise or arrangement is in conformity with the accounting standards prescribed under section 133. (8) The order of the Tribunal shall be filed with the Registrar by the company within a period of thirty days of the receipt of the order. (9) The Tribunal may dispense with calling of a meeting of creditor or class of creditors where such creditors or class of creditors, having at least ninety per cent. value, agree and confirm, by way of affidavit, to the scheme of compromise or arrangement. (10) No compromise or arrangement in respect of any buy-back of securities under this section shall be sanctioned by the Tribunal unless such buy-back is in accordance with the provisions of section 68. (11) Any compromise or arrangement may include takeover offer made in such manner as may be prescribed: Provided that in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporate Debtor as going concern in its totality along with the employees. 14. The last stage will be death of the Corporate Debtor by liquidation, which should be avoided. 15. Learned counsel appearing on behalf of the Appellant (Promoter) submitted that the provisions under Section 230 may not be completed within 90 days, as observed in S.C. Sekaran v. Amit Gupta Ors. (Supra). 16. It is further submitted that there will be objections by some of the creditors or members who may not allow the Tribunal to pass appropriate order under Section 230 of the Companies Act, 2013. 17. Normally, the total period for liquidation is to be completed preferably within two years. Therefore, in S.C. Sekaran v. Amit Gupta Ors. (Supra), this Appellate Tribunal allowed 90 days time to take steps under Section 230 of the Companies Act, 2013. In case, for any reason the liquidation process under Section 230 takes more time, it is open to the Adjudicating Authority (Tribunal) to extend the period if there is a chance of approval of arrangement of the scheme. 18. During proceeding under Section 230, if any, objection is raised, it is open to the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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