TMI Blog2019 (4) TMI 1953X X X X Extracts X X X X X X X X Extracts X X X X ..... hority 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. The appeal is disposed off. - Company Appeal (AT) (Insolvency) No. 451 of 2019 - - - Dated:- 29-4-2019 - S.J. Mukhopadhaya, Kanthi Narahari And A.I.S. Cheema, JJ. For Appellant: Attendance not marked For Respondent: Mr. Siddhant Kant, for Liquidator ORDER Pursuant to application u/s 7 of Insolvency Bankruptcy Code ( I B Code), 2016 the Corporate Insolvency Resolution Process was initiated on 5th April, 2018 against M/s SU KAM Power System Ltd. ( Corporate Debtor ). Subsequently, in the absence of any approved Resolution Plan and as 270 days was to complete, an application u/s 33(1) was filed before the Adjudicating Authority (National Company Law Tribunal), Principal Bench, New Delhi in which order of liquidation was passed by Impugned order dated 3rd April, 2019. Learned counsel appearing on behalf of Appellant submitted that the Corporate Insolvency Resolution Process was not completed in the manner as it should have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omoters /those who are in management. Thus, the resolution process is not adversarial to the corporate debtor but, in fact, protective of its interests. The moratorium imposed by Section 14 is in the interest of the corporate debtor itself, thereby preserving the assets of the corporate debtor during the resolution process. The timelines within which the resolution process is to take place again protects the corporate debtor s assets from further dilution, and also protects all its creditors and workers by seeing that the resolution process goes through as fast as possible so that another management can, through its entrepreneurial skills, resuscitate the corporate debtor to achieve all these ends. In Arcelormittal India Pvt. Ltd. vs. Satish 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) Company Appeal (AT)(Ins) No. 451 of 2019 5 Regulations, 2016, states that the liquidator may also sell the corporate debtor as a going concern. 6. In Meghal Homes Pvt. Ltd. vs. Shree Niwas Girni K.K. Samiti Ors. (2007) 7 SCC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany 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 methods. (2) The company or any other person, by whom an application is made under subsection (1), shall disclose to the by affidavit- (a) all material facts relating to the company, such as the latest financial position of the company, the latest auditor s report on the accounts of the company and the pendency of any investigation or proceedings against the company; (b) reduction of share capital of the company, if any, included in the compromise or arrangement; (c) any scheme of corporate debt restructuring consented to by not less than seventy-five per cent. of the secured creditors in value, including- (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 cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y be prescribed shall also be sent to the Central Government, the income-tax authorities, the Reserve Bank of India, the Securities and Exchange Board, the Registrar, the respective stock exchanges, the Official Liquidator, the Competition Commission of India established under sub-section (1)of section 7 of the Competition Act, 2002, if necessary, and such other sectoral regulators or authorities which are likely to be affected by the compromise or arrangement and shall require that representations, if any, to be made by them shall be made within a period of thirty days from the date of receipt of such notice, failing which, it shall be presumed that they have no representations to make on the proposals. (6) Where, at a meeting held in pursuance of sub-section (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f listed companies, takeover offer shall be as per the regulations framed by the Securities and Exchange Board. (12) An aggrieved party may make an application to the Tribunal in the event of any grievances with respect to the takeover offer of companies other than listed companies in such manner as may be prescribed and the Tribunal may, on application, pass such order as it may deem fit. Explanation.-For the removal of doubts, it is hereby declared that the provisions of section 66 shall not apply to the reduction of share capital effected in pursuance of the order of the Tribunal under this section. 8. In view of the provision of Section 230 and the decision of the Hon ble Supreme Court in Meghal Homes Pvt. Ltd. and Swiss Ribbons 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 of 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower to pass order under Section 230 to overrule the objections, if the arrangement and scheme is beneficial for revival of the Corporate Debtor (Company). While passing such order, the Adjudicating Authority is to play dual role, one as the Adjudicating Authority in the matter of liquidation and other as a Tribunal for passing order under Section 230 of the Companies Act, 2013. As the liquidation so taken up under the I B Code , the arrangement of scheme should be in consonance with the statement and object of the I B Code . Meaning thereby, the scheme must ensure maximisation of the assets of the Corporate Debtor and balance the stakeholders 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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