TMI Blog2019 (5) TMI 1817X X X X Extracts X X X X X X X X Extracts X X X X ..... esolution Professional has also gave sufficient time to all the Resolution Applicants for personal instructions of the CoC Members. And facts shows that all the 3 (three) Resolution Applicants have participated in the consolidation and finalized of Resolution Plan. It is settled position of law that IRP/RP alone will conduct CIRP of Corporate Debtor with supervision and guidance of COC at the helm of affairs subject to overall jurisdiction of Adjudicating Authority under the provisions of Code. As rightly claimed by the Respondents, relying on the law as cited supra, the Adjudicating Authority hardly has jurisdiction to entertain Interim Application(s) while CIRP is on, which is to be completed in a time bound manner. After the CIRP is over, it is for the Adjudicating Authority to scrutinize the entire process of CIRP before approving/rejecting the Resolution plan finally decided by the CIRP. Therefore, the Adjudicating Authority has examined the final Resolution plan as approved by the COC and after satisfying various parameters as laid down under the Code and the Rules made thereunder, has approved the Resolution plan - the allegations made and the information sought for by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its final approval and all other proceedings connected with the main as illegal, invalid and void etc 2. Brief facts of the case, as mentioned in the Application, are as follows: 1) The present application is being filed by the Applicant, MTR Foods Private Limited, which has submitted an expression of interest for submission of resolution plans for the Corporate Debtor, Maiyas Beverages and Foods Private Limited, for reliefs under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 ( Code ) for two reasons which adversely affect the Corporate Insolvency Resolution Process ( CIRP ) of the Corporate Debtor, the determination of which is critical to ensure that the CIRP is undertaken in a fair and transparent manner and in compliance with the Code 2) It is alleged that there is Possible existence of Preferential, Fraudulent or Undervalued Transactions. It appears that the Corporate Debtor, under an agreement dated 5 June 2018, has sold its subsidiary, Maiyas Restaurants Private Limited ( Maiyas Restaurants ), to Mr.Parampalli Sadananda Maiya ( Promoter ) who is promoter and director of the Corporate Debtor as well as one of the resolution applicants ( Restaurant Sale ). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions of the Promoter seem to be directed towards regaining control of the Corporate Debtor at a low price, having fundamentally weakened the likelihood of receiving serious and competitive bids form bona fide resolution applicant. Such actions are prejudicial to the interests of bona fide resolution applicants as well as creditors of the Corporate Debtor. It does appear that the entire intention in having such petitions filed was nothing but a concerted attempt to take control of the business of the Corporate Debtor to the detriment of the creditors. 3. The Karnataka Bank Ltd. one of COC with 96.01% has opposed the application by filing Statement of Objections dated 11.04.2019 by inter alia contending as follows: 1) The Applicant viz., MTR Foods Private Limited (MTR) is one of the Resolution Applicants in this matter. The instant application is not maintainable either in law or on facts and it is liable to be dismissed in limine with exemplary costs. It appears that one Mr. Ganesh Shenoy, who is stated to be the authorized representative of the Applicant, has not signed the affidavit before the Notary and therefore, the present application is not verified in accordance w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave no application to advance estimates to be furnished under Section 18-A(3), and if we accede to this contention, we must hold that though the legislature enacted Section 18-A(9) (b) with the very object of bringing the failure to send estimates under Section 18-A(3) within the operation of Section 28, it signally failed to achieve its object. A construction of which leads to such a result must, if that is possible, be avoided, on the principle expressed in the maxim, ut res magisvaleat quam pareat . Vide Curtis v. Stovin [Curtis vs. Stovin, (1889) LR 22 QBD 513 (CA)] an in particular the following observations of Fry, L.J., at QBD p. 519: 'The only alternative construction offered to us would lead to this result that the plain intention of the legislatures has entirely failed by reason of a slight inexactitude in the language of the section. If we were of adopt this construction, we should be construing the Act in order to defeat its object rather than with a view to carry its object into effect.' Vide also Craies on Statute Law, p. 90 and Maxwell on the Interpretation of Statutes, Tenth Edn., pp. 236-37. 'A statue is designed'. Observed Lord Dunedin i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so a financial creditor with 96.01% voting share and admitted credit amount of over ₹ 77 Crores in Maiyas Beverages and Foods Pvt. Ltd. (MBFPL) in the year 2018 itself. ICICI Bank is the other financial creditor with 3.99% voting share and admitted credit amount of over ₹ 3 Crores in the year 2018 itself. ICICI Bank is also one of the members of the CoC. The other CoC are related parties with no voting share. As per the Code, the Resolution Professional acts under the instructions/guidance of the Committee of Creditors and the resolution professional is accountable to the Committee of Creditors. The Resolution Professional has examined the transactions related to the transactions to which the Applicant has raised objections and placed the same before CoC. The Committee of Creditors have accepted the manner in which transactions were examined and conclusions arrived at by the Resolutions Professional. The Committee of Creditor is of the opinion that the said transactions are in order and do not violate the provisions of the Code. In any event, under the Code, a resolution applicant has no right to seek for review of the decisions taken either by the resolution profession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness information related to the Corporate Debtor Company. However to keep the transparency in the CIR Proceedings considering the best interest of the Corporate Debtor Company, the Resolution Professional has replied all the queries raised by the applicant. On a perusal of the requests made by the Applicant, it appears that the Applicant has no real intention to provide any resolution plan for the revival of the Corporate Debtor but is expressing an interest only with an intention to extract proprietary information belonging to the Corporate Debtor and use the same to improve its business and reduce the value of the Company. As a person responsible for maintaining the value of the Corporate Debtor, the resolution professional cannot share any proprietary information to the Corporate Debtor with any outsider. The relief claimed by the Applicant clearly brings out the real intention of the Applicant. On this ground also, the application filed by the Applicant is liable to be rejected with exemplary costs. 3) It is further stated that the Resolution Professional has supplied all the information that are to be provided under law, and that which a resolution applicant is entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Applicant has no right to direct the Resolution Professional to examine any transaction. The acts of the Applicant very clearly bring out the mala fide intention of the Applicant to reduce the value of the Corporate Debtor and to wipe out competition. Despite the above position in law, the Applicant has also written letters to the Resolution Professional and the Committee of Creditors which have also been replied to similarly. 6) Further, it is respectfully brought to the notice of this Hon'ble Tribunal that the Applicant has been provided all the information that it is entitled to under law, excluding the proprietary information of the Corporate Debtor and the Applicant has also visited the factory of the Corporate Debtor and has scrutinized all the documents. Therefore, the allegation that the Resolution Professional has not provided material information is baseless and is denied as false and made with an intention to bring disrepute to the resolution Professional, Corporate Debtor and derail the entire resolution process. 5. The instant application was also opposed by the Promoters of the Corporate Debtor, Maiyas Beverages and Foods Pvt. Ltd. by filing Preliminary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing tactics by filing the instant application to seek such information indirectly on un-tenable grounds. 4) Under the Code, it is the exclusive right of the Resolution Professional to examine the transaction in the light of the provision of the Code. Therefore, the Resolution Professional Applicant has examined the transactions and has not found any infirmity with any of the transactions. The Applicant has no right to direct the Resolution Professional to examine any transaction. 6. On behalf of the Resolution Professional, the learned Senior Counsel has also filed Written Submissions dated 10.04.2019, by inter alia contending as follows: 1) That in the Third meeting of the Committee of Creditors ( CoC ) held on 04.12.2018 at Agenda No. 7, matter related to Disinvestment of Shares held by the Corporate Debtor in the erstwhile Subsidiary M/s. Maiyas Restaurants Private Limited was placed before the Committee of Creditors by the Respondent Private Limited and that it was informed to the CoC that during the scrutiny of accounts, secretarial and other records of the Corporate Debtor, the Respondent has observed that around June, 2018, the sale of shares of the Corporate De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guments as briefly sated supra. 9. In pursuant to the initiation of CIRP in respect of the Corporate Debtor, IRP/RP has initiated steps in accordance with law and conducted 7th COC meetings and finally 3 (three) Resolution Plans were received in pursuant to the expression of interest as sought for, namely M/s.Akashika Foods Private Limited ( Akashika ), Mr.Kamal Agarwal, and M/s.MTR Foods Private Limited collectively called as Final PRAs . Accordingly, the RP evaluated the plan and on instructions from the CoC, sent his evaluation report and the resolution plans to BDO, an Internationally reputed agency for obtaining an independent report of the bids received viz. a viz. the evaluation matrix put forth in the RFRP document, both on quantitative and qualitative parameters. The Resolution Professional has also gave sufficient time to all the Resolution Applicants for personal instructions of the CoC Members. And facts shows that all the 3 (three) Resolution Applicants have participated in the consolidation and finalized of Resolution Plan. 10. During the 7th CoC meeting, the representatives of MTR and Akashika and Mr.Kamal Agarwal, each presented the Resolution plan for the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
