TMI Blog2020 (2) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... or' in Liquidation to any person who is not eligible to be a Resolution Applicant. From section 35, it is clear that the Promoter, if ineligible under Section 29A cannot make an application for Compromise and Arrangement for taking back the immovable and movable property or actionable claims of the 'Corporate Debtor'. The National Company Law Tribunal by impugned order dated 15th May, 2018, though ordered to proceed under sections 230 to 232 of the Companies Act, failed to notice that such application was not maintainable at the instance of 1st Respondent-Arun Kumar Jagatramka (Promoter), who was ineligible under section 29A to be a 'Resolution Applicant' - case remitted to 'Liquidator'/ Adjudicating Authority for taking fresh decision - appeal allowed by way of remand. - Company Appeal (AT) No. 221 Of 2018 - - - Dated:- 24-10-2019 - Justice Sudhansu Jyoti Mukhopadhaya, Chairperson And Bansi Lal Bhat, Judicial Member Karan Batura, Adv. for the Appellant. Abhijeet Sinha, Sandeep Bajaj, Soayib Qureshi, Deepanjan Dutta, Ms. Shrivalli Kajaria, Aditya Shukla and Nakul Mohta, Advs. for the Respondent. JUDMENT Justice Sudhansu Jy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. In the meantime, 1st Respondent-Mr. Arun Kumar Jagatramka (Promoter) moved an application under Sections 230 to 232 of the Companies Act before the National Company Law Tribunal, Kolkata for Compromise and Arrangement between erstwhile Promoters and the Creditors. In the said case, the impugned order dated 15th May, 2018 was passed. 6. The question as to whether in a Liquidation proceeding under I B Code, an application under Sections 230 to 232 of the Companies Act can be entertained by the Tribunal or not, fell for consideration before this Appellate Tribunal in S.C. Sekaran .v. Amit Gupta [2019] 103 taxmann.com 222/152 SCL 536 (NCL-AT). In the said case, this Appellate Tribunal passed certain orders, which were noticed by this Appellate Tribunal in Y. Shivram Prasad v. S. Dhanapal [2019] 104 taxmann.com 377/153 SCL 294 (NCL-AT) disposed of on 27th February, 2019. 7. In Y Shivram Prasad having noticed the decision in S.C. Sekaran, this Appellate Tribunal observed and held as follows: - '11. During the liquidation stage, 'Liquidator' required to take steps to ensure that the company remains a going concern and instead of liquidation and for revival ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh Kumar Gupta Ors.' at paragraph 83, footnote 3 is mentioned. The Hon'ble Supreme Court noticed that : 3. Regulation 32 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, states that the liquidator may also sell the corporate debtor as a going concern. ' 7A. In ' Meghal Homes (P.) Ltd. v. Shree Niwas Girni K.K. Samiti [2007] 78 SCL 482 (SC) the Hon'ble Supreme Court observed and held as follows: 33. The argument that section 391 would not apply to a company which has already been ordered to be wound up, cannot be accepted in view of the language of section 391(1) of the Act, which speaks of a company which is being wound up. If we substitute the definition in section 390(a) of the Act, this would mean a company liable to be wound up and which is being wound up. It also does not appear to be necessary to restrict the scope of that provision considering the purpose for which it is enacted, namely, the revival of a company including a company that is liable to be wound up or is being wound up and normally, the attempt must be to ensure that rather than dissolving a company it is allowed to revive. Moreover, secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding- (i) a creditor's responsibility statement in the prescribed form; (ii) safeguards for the protection of other secured and unsecured creditors; (iii) report by the auditor that the fund requirements of the company after the corporate debt restructuring as approved shall conform to the liquidity test based upon the estimates provided to them by the Board; (iv) where the company proposes to adopt the corporate debt restructuring guidelines specified by the Reserve Bank of India, a statement to that effect; and (v) a valuation report in respect of the shares and the property and all assets, tangible and intangible, movable and immovable, of the company by a registered valuer. (3) Where a meeting is proposed to be called in pursuance of an order of the Tribunal under sub-section (1), a notice of such meeting shall be sent to all the creditors or class of creditors and to all the members or class of members and the debenture-holders of the company, individually at the address registered with the company which shall be accompanied by a statement disclosing the details of the compromise or arrangement, a copy of the valuation report, if any, and explaining their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (1), majority of persons representing three-fourths in value of the creditors, or class of creditors or members or class of members, as the case may be, voting in person or by proxy or by postal ballot, agree to any compromise or arrangement and if such compromise or arrangement is sanctioned by the Tribunal by an order, the same shall be binding on the company, all the creditors, or class of creditors or members or class of members, as the case may be, or, in case of a company being wound up, on the liquidator appointed under this Act or under the Insolvency and Bankruptcy Code, 2016, as the case may be, and the contributories of the company. (7) An order made by the Tribunal under sub- section (6) shall provide for all or any of the following matters, namely:- (a) where the compromise or arrangement provides for conversion of preference shares into equity shares, such preference shareholders shall be given an option to either obtain arrears of dividend in cash or accept equity shares equal to the value of the dividend payable; (b) the protection of any class of creditors; (c) if the compromise or arrangement results in the variation of the shareholders' rights, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd.', we direct the 'Liquidator' to proceed in accordance with law. He will verify claims of all the creditors; take into custody and control all the assets, property, effects and actionable claims of the 'corporate debtor', carry on the business of the 'corporate debtor' for its beneficial liquidation etc. as prescribed under section 35 of the I B Code. The Liquidator will access information under section 33 and will consolidate the claim under Section 38 and after verification of claim in terms of section 39 will either admit or reject the claim, as required under section 40. Before taking steps to sell the assets of the 'corporate debtor(s)' (companies herein), the Liquidator will take steps in terms of section 230 of the Companies Act, 2013. The Adjudicating Authority, if so required, will pass appropriate order. Only on failure of revival, the Adjudicating Authority and the Liquidator will first proceed with the sale of company's assets wholly and thereafter, if not possible to sell the company in part and in accordance with law. 13. Therefore, it is clear that during the liquidation process, step required to be taken for its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... takeholders such as, the 'Financial Creditors', 'Operational Creditors', 'Secured Creditors' and 'Unsecured Creditors' without any discrimination. Before approval of an arrangement or Scheme, the Adjudicating Authority (National Company Law Tribunal) should follow the same principle and should allow the 'Liquidator' to constitute a 'Committee of Creditors' for its opinion to find out whether the arrangement of Scheme is viable, feasible and having appropriate financial matrix. It will be open for the Adjudicating Authority as a Tribunal to approve the arrangement or Scheme in spite of some irrelevant objections as may be raised by one or other creditor or member keeping in mind the object of the Insolvency and Bankruptcy Code, 2016. 8. In view of the aforesaid decision of this Appellate Tribunal in Y. Shivram Prasad and S.C. Sekaran, we answer the first question in affirmative, i.e., to say that in a Liquidation proceeding under I B Code, a petition under sections 230 to 232 of the Companies Act is maintainable. 9. The next question arises for consideration is as to whether 1st Respondent-Arun Kumar Jagatramka (Promoter), can b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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