TMI Blog2021 (3) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant will be unable to raise funds from the Term Lenders who are insisting that the status of the Company should change from a company under liquidation to an active status. The order of liquidation has not been set aside. Ultimately, what the request of the appellant reduces itself to, is that it would raise funds on a mortgage of the assets of the Company and unless the Company is brought out of liquidation, it would not be in a position to raise the funds. This is unacceptable. The appellant has failed to abide by its obligations. In that view of the matter, there are no reason or justification to entertain the Civil Appeal any further. The consequence envisaged under the order of this Court shall accordingly ensue in terms of the forfeiture of the amount of ₹ 20 crores. As a consequence of this order, the management shall revert to the liquidator for taking steps in accordance with law. Application disposed off. - Civil Appeal No 3299 of 2020 - - - Dated:- 1-3-2021 - Hon'ble Dr. Justice D.Y. Chandrachud And Hon'ble Mr. Justice M.R. Shah For the Appellant(s) : Mr. K.V. Vishwanathan, Sr. Adv., Mr. Gaurav Varma, AOR For the Respondent(s) : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf of Edelweiss Asset Reconstruction Company Limited (EARC), a financial creditor, who had appeared before the National Company Law Appellant Tribunal. EARC has supported the appellant. Mr Ashish Makhija, learned counsel appears on behalf of the liquidator to oppose the appeal and support the order of the National Company Law Appellate Tribunal. 3 The corporate insolvency resolution process (CIR process) was initiated against the Corporate Debtor on 7 August 2017. The Resolution Plan submitted by the appellant was approved on 30 April 2018 by the Committee of Creditors (CoC). The Resolution Plan was approved by the NCLT on 15 May 2019. The NCLT was thereafter moved on the ground that the Resolution Plan had not been implemented by the appellant. Hence an application was filed under Section 33 of the Insolvency and Bankruptcy Code 2016 seeking liquidation of the Corporate Debtor. This was allowed by the NCLT by its order dated 16 January 2020. 4 After the appellant filed an appeal before the NCLAT on 3 February 2020, an opportunity was granted to them to file an affidavit indicating the time frame for compliance of the Resolution Plan. On 25 February 2020, a meeting took place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quidator does not in principle oppose the request, as an officer of the Court, he would wish to apprise the Court of the fact that the appellant did not take steps following the approval of the Resolution Plan in May 2019 for complying with its obligations. 9 Liquidation of the Corporate Debtor should be a matter of last resort. The IBC recognizes a wider public interest in resolving corporate insolvencies and its object is not the mere recovery of monies due and outstanding. The appellant has indicated its bona fides, at least prima facie at the present stage, by unconditionally agreeing to subject itself to the forfeiture of an amount of ₹ 20 crores, which has been deposited by it, in the event that it fails to comply with the requirement of depositing an additional amount of ₹ 50 crores within a period of three months in terms of the understanding that was arrived at on 25 February 2020. In order to enable the appellant to have one final opportunity to do so, we direct that the appellant shall, in order to demonstrate its bona fides deposit an amount of ₹ 50 crores upfront in terms of the understanding which was arrived at on 25 February 2020. The appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the previous orders of this Court recognize that the appellant was required to deposit an amount of ₹ 50 crores in terms of the understanding which was arrived at with the CoC on 25 February 2020. It has been submitted that the appellant would hence raise the funds after securing a mortgage on the assets of the Corporate Debtor. However, the Term Lenders are not ready and willing to make funds available unless the status of the Company is altered. 7 Ms Meenakshi Arora, learned Senior Counsel appearing on behalf of Edelweiss Asset Reconstruction Company Limited EARC , submits that EARC has the largest stake in respect of the Corporate Debtor. Ms Arora has submitted that EARC, as recorded in the earlier orders, supported the appellant in its efforts to comply with the Resolution Plan and, accordingly, suitable orders may be passed by this Court so as to facilitate the appellant in raising the necessary funds. 8 On the other hand, Mr Ashish Makhija, learned counsel, who had appeared on behalf of the Liquidator, submits that though the management was handed over to the appellant, the appellant has proceeded to take action towards settling various disputes, includin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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