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TMI Blog2019 (9) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... the loans in favour of United Bank of India and other banks (14 in number) in consortium credit facility to the tune of Rs.5,93,89,00,000 extended to M/s Vardhman Polytex Ltd. and that the applicant acquired the debt of Vardhman Polytex Ltd. from United Bank of India vide assignment deed dated 28.03.2018. 4. It is submitted that one of the financial creditors Andhra Bank had earlier submitted its claim with the Interim Resolution Professional (IRP) in Form C dated 29.07.2017 for Rs.16.00 crores and this claim was rejected by the IRP vide email dated 08.08.2017 and the IRP's order was upheld by the Tribunal vide order dated 17.11.2017. The appeal filed by Andhra Bank before the Hon'ble National Company Law Appellate Tribunal (NCLAT) is stated to be allowed vide order dated 13.07.2018 in CA(AT)(Insolvency) No.61 of 2018. 5. It is stated that subsequent to the above order, the present applicant also submitted its claim as one of the corporate guarantee holders before the RP in the prescribed Form C by email dated 01.08.2018. It is submitted that in the 9th CoC meeting held 16.08.2018, the RP inter alia mentioned that since the claims of the corporate guarantee holder were not owed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich will constitute two members i.e. State Bank of India and Andhra Bank. Both the members of the 'Committee of Creditors' will fix a date preferably by the beginning of the next month and pass order in terms of Section 30(4) of the 'I&B Code'. 17. We make it clear that we have allowed the Andhra Bank tobe a member of the 'Committee of Creditors' that does not mean that they will raise objection to the 'Resolution Plan' in question. If they oppose it, they will have to give the ground. Only if the 'Resolution Plan' is not in accordance with Section 30(2), then a valid objection can be raised by Andhra Bank who has been added as a member of the 'Committee of Creditors' otherwise the Committee will approve it having already found to be viable and workable and 'Resolution Professional', and thereafter the 'Resolution Professional' will place the matter before the Adjudicating Authority for its order under Section 31. 18. We further make it clear that if 'Resolution Plan' is approvedand successful 'Resolution Applicant' takes over the management of the 'Corporate Debtor', the 'Corporate Debtor' will continue to be guarantor of the Andhra Bank as their right will not cease and as it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the resolution plan of the resolution applicant and negotiate with the resolution applicant their objections with respect to the plan. CA No.607/2018 has been disposed of today inter alia directing the resolution applicant to submit its final revised resolution plan to the RP within three days from today and also direct the RP to convene a meeting of the CoC to consider the final revised resolution plan submitted by the resolution applicant. 12. The present position of the resolution process is therefore, akin to the position of the resolution process on the date when the Hon'ble NCLAT passed order dated 13.07.2018. The claim of the present applicant that it comes within the definition of 'financial creditor' under Section 5(7) of the Code is based upon the decision dated 13.07.2018 of the Hon'ble NCLAT. Therefore, as regarding voting rights also, we consider it reasonable to give directions that in the meeting of the CoC directed to be held as above, the present applicant will have rights on the same lines as given to Andhra Bank in paras No.17 and 18 of the order dated 13.07.2018 of Hon'ble NCLAT supra. 13. Consequent to the above decision, the directions given vide order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he result of the meeting was also received. It is stated that it is only on 12.12.2018 that the resolution applicant came to know that its plan was rejected by the CoC on 17.11.2018 and application for liquidation of the corporate debtor was filed by RP. 7. It is stated that the object of the Insolvency & Bankruptcy Code, 2016 (Code) is to enable a running concern to continue its business if CIRP is possible and liquidation can be avoided and if the corporate debtor is liquidated, its employees numbering around 500-600 will suffer irreparable loss and will face an uncertain future. It is also submitted that the resolution applicant is ready to improve its offer after discussion with the CoC. 8. Vide order 09.01.2019, notice was directed to be issued at this stage only to the RP, State Bank of India (SBI) and Andhra Bank which are respondent nos. 2, 3 & 9 for 17.01.2018. Vide order dated 17.01.2019, it is noted that affidavit of service has been filed by the resolution applicant vide Diary No. 177 dated 15.01.2019 and that there is no representation from Andhra Bank and reply by SBI has been filed. 9. In the reply filed by SBI vide Diary No. 199 dated 16.01.2019, it is stated tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Haryana High Court dated 13.05.2019, wherein the matter is listed for 09.07.2019, and requested for adjournment. However, learned counsel for the Resolution Applicant has objected to the said request for adjournment on the ground that the matter pending before the Hon'ble Punjab and Haryana High Court is under the provisions of Section 10F of the Companies Act, 1956 and hence, not applicable on this petition." 15. The parties were directed to furnish their submissions in writing regarding the effect of the order of the Hon'ble High Court of Punjab and Haryana on the present proceedings two days before the next date of hearing and the matter was adjourned to 25.07.2019. Effective hearings could not take place on 25.07.2019 and 14.08.2019 since the members of the Bar were abstaining from work. On the last date of hearing of 30.08.2019, no request for further adjournment in the present application has been made by the RP. Therefore, the matter is being proceeded with. 16. Coming to the facts of the present case, we note that the resolution applicant has stated that on 17.03.2018, the revised plan was accepted by the CoC and it issued letter of intent to the resolution applicant. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found it to be viable and workable. However, SBI did not approve the original resolution plan on the ground that the offer by the resolution applicant in the original resolution plan is much lower than the liquidation value of the corporate debtor. 21. In view of these facts, we consider it reasonable to accept the contention of the resolution applicant that the CoC be directed to consider the resolution plan of the resolution applicant. As recorded in order dated 30.08.2019, SBI has conveyed its no objection for holding a fresh meeting to consider revised resolution plan by the resolution applicant. 22. We therefore, direct the resolution applicant to submit its final revised resolution plan to the RP within three days from today and also direct the RP to convene a meeting of the CoC to consider the final revised resolution plan submitted by the resolution applicant. In accordance with Section 30(5) of the Code, the resolution applicant be asked to attend the meeting of CoC but shall not have right to vote at the meeting. The RP may convene the meeting of the CoC on such a date so as to ensure that a report on the decision of the CoC is conveyed to the AA within a period of 20 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or the extended time limit of 270 days? Actus curiae neminem gravabit - the act of the Court shall harm no man - is a maxim firmly rooted in our jurisprudence (see Jang Singh v. Brijlal & Ors. [1964] 2 S.C.R. 146 at page 149, and A.S. Antulay v. R.S. Nayak & Ors. [1988] Supp. 1 S.C.R. 1 at page 71). It is also true that the time taken by a Tribunal should not set at naught the time limits within which the corporate insolvency resolution process must take place. However, we cannot forget that the consequence of the chopper falling is corporate death. The only reasonable construction of the Code is the balance to be maintained between timely completion of the corporate insolvency resolution process, and the corporate debtor otherwise being put into liquidation. We must not forget that the corporate debtor consists of several employees and workmen whose daily bread is dependent on the outcome of the corporate insolvency resolution process. If there is a resolution applicant who can continue to run the corporate debtor as a going concern, every effort must be made to try and see that this is made possible." 25. It was further held by the Supreme Court in Arcelormittal India Private ..... X X X X Extracts X X X X X X X X Extracts X X X X
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