TMI Blog2021 (4) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... mit Suresh Bhatnagar. The RP has not offered any explanation as to why the notice has not been served on Sumit Suresh Bhatnagar ex-director of Corporate Debtor - it is clear that on false ground RP has declined to share video conference link to the Appellant. Admittedly, the RP has not provided the copy of Resolution Plans to the Appellant. Thus, he has contravened the mandatory provision provided in Regulation 21(3) (iii) of the IBBI Regulations - It is pertinent to note that the 11th CoC meeting convened on 08.11.2019 at 03:00 PM and notice of that meeting was sent to the Appellant on 07.11.2019 at 08:15 PM i.e. less than 24 hours notice was served, which is against the Regulation 19 of IBBI Regulations. Without affording opportunity to the ex-directors of the Corporate Debtor, 9th 10th and 11thCoC meetings were convened and Resolution of Liquidation of Corporate Debtor has been passed. Which is in contravention to Section 24 (3) (b) of I B Code and Regulations 19(1), 21 (3) (iii) and 23 of the IBBI Regulations. Thus, the RP has failed to perform the duties of Resolution Professional as provided under Section 25 of the I B Code - it is apparent that there has been material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter hearing the parties, vide order dated 02.12.2019 the Member (J) is of the opinion that the suspended management is to be given time for taking up the matter with CBI/Investigating Officer (I.O.) for their participation in CoC meetings.Member (T) differ from the opinion of member (J) and he is of the opinion that the prayer made by the suspended management in I.A No. 701 of 2019 in CP (IB) 137 of 2018 needs to be rejected and the I.A filed by the RP for liquidation order as resolved by the CoC should be approved without further loss of time. Because, there was difference of opinion between the Members of the Bench, the matter was referred to Hon ble President NCLT Delhi alongwith observations and related papers. He directed to list the matter before Ms. Manorama Kumari Member (J), who after hearing the arguments vide impugned order disposed of the Application. Operative part of the order is as under:- 3. On perusal of the re cords, it is found that Hon ble Gujarat High Court has passed the order on 18.06.2019 on the Application so made by the Applicant, wherein certain conditions were imposed by the Hon ble High Court. Out of (a) to (h) conditions, one of the condition i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of each meeting to be given inter alia to such persons. It means in the absence of such notice having been given, the meeting itself would not be valid. 8. The Respondent (RP) has admitted in his Reply that the physical meeting took place at Ahmadabad, while the Appellant had been restrained from leaving Vadodara. As such the Respondent was clearly aware that in the absence of video conference link the Appellant would not be able to attend the CoC meetings. 9. It is also undisputed that the link of video conferencing was refused to the Appellant despite specific request though provided to other participants. This was in direct contravention of Regulation 23 of Insolvency Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016. (In brief IBBI Regulations ) Which mandates that notice convening the meetings of the Committee shall provide the participants an option to attend the meeting through video conferencing or other audio and visual means. The Respondent has not furnished any explanation as to why the link of video conferencing was refused to the Appellant. 10. It is submitted that the Respondent has not dealt with the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent is bound by the decision of the CoC and cannot question the rationality of the decision taken by the CoC. The impugned order is well reasoned, therefore, the present Appeal deserves to be dismissed. 13. After hearing Ld. Counsel for the parties, we have minutely examined the record. 14. In this Appeal, following issues arose for our consideration: (i) Whether the RP has given notice of each meetings of the CoC to all members of suspended board of directors (As per Section 24(3) (b) of the I B Code)? (ii) Whether the RP has given not less than five days notice to every participant (As per Regulation 19 of IBBI Regulations)? (iii) Whether the RP has provided copies of all relevant documents to the participants. (As Per Regulation 21 (3) (iii) of IBBI Regulations)? (iv) Whether the RP has provided the participants an option to attend the meetings of CoC through video conferencing or other audio and visual means. (As per Regulation 23of IBBI Regulations)? 15. In the light of the submissions we have examined the impugned order. In Para 4 of the impugned order it is mentioned that Hon ble High Court of Gujarat on 13.11.2019 modified the earlier b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the proceedings which have been undertaken before the NCLT in the Insolvency Application being CP(IB) NO. 137/NCLT/AHM/2018. 9. The Application is allowed it is being clarified that in wake of condition (F1) and also since the Investigating Officer, CBI is to be intimated of the proceedings at every stage as undertaken by the RP, the Participation of both the brothers Mr. Amit Bhatnagar and Mr. Sumit Bhatnagar as may be required under the law shall continue at the end of the RP. The intimation, as far as possible, to the investigating Officer be at least 48 hours prior to any vital event taking place, so that he can meet with the time line. In the event of extreme urgency, however, the Investigating Officer may not object to the intimation which may come his way in less than this stipulated time of 48 hours. 10. Let the order of this Court be observed in letter and spirit. 11. Application of modification is allowed in the above terms. 17. In such a situation, in the impugned order Ld. Adjudicating Authority inadvertently mentioned that the bail order modified vide order dated 13.11.2019. Actually, it was modified vide order dated 20.09.2019. Due to thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave a right to participate in each and every meeting held by the committee of creditors, and also have a right to discuss along with members of the committee of creditors all resolution plans that are presented at such meetings under Section25(2)(i) . 19. Hon ble Supreme Court he ld that under Section 24 of the I B Code all meetings of CoC are to be conducted by the RP who, however, does not happen to be part of this committee. Section 24(3) (b) is important in that, the RP has to give notice of each and every meeting of the Committee of Creditors, inter alia to members of the suspended board of directors. 20. In the present case, there were two directors of the Corporate Debtor, Appellant Amit Suresh Bhatnagar and Sumit Suresh Bhatnagar. The RP was required to give notice of each and every meeting of CoC to both the exdirectors. There is nothing on record to show that RP has served notice of any meetings of CoC on ex-director Sumit Suresh Bhatnagar. The RP has not offered any explanation as to why the notice has not been served on Sumit Suresh Bhatnagar ex-director of Corporate Debtor. 21. So far as the service of n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Date Tue, 05.11.2019, 10:45 Dear Sir, VC Link cannot be shared till we get a firm clarity of same from our legal and CBI Regards Bhuwan Madan 25. The Appellant in his first email dated 04.11.2019 at 18:07 pointed out that the notice given to the Appellant is extraordinarily short i.e. less than 24 hours notice . Regulation 19 of IBBI Regulations provides that: A meeting of CoC shall be called by giving not less than five days notice in writing to e very participants. 26. In the second email dated 05.11.2019 the Appellant requested to attend the CoC meeting through a video conference as offered to all members. But, RP through his aforesaid email dated 05.11.2019 declined to share video conference link to the Appellant for want of legal opinion. Surprisingly, before this email RP has already obtained the legal opinion of DSK legal (Legal Counsel to RP) (Please see Page 132 of Appeal Paper Book) which is as under: In light of the above provisions of law and the Judgment of the Hon ble Supreme Court it is clear that the erstwhile board of directors has the right to attend the CoC meetings and to have a copy of the Re solution Plan fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the notice for 9th CoC meeting and has given less than 24 hours notice for 10th, 11th CoC meeting and as to why refused to provide link of VC to Appellant for 10th CoC meeting. The RP has not furnished any explanation as to why notice has not been served on the other ex-director i.e. Sumit Suresh Bhatnagar, thus, the RP has contravened the mandatory provisions provided in Section 24 (3) (b) of the I BCode and Regulations 19 (1), 21(3)(iii) and 23 of the IBBI Regulations. 32. We are of the considered view that without affording opportunity to the ex-directors of the Corporate Debtor, 9th 10th and 11thCoC meetings were convened and Resolution of Liquidation of Corporate Debtor has been passed. Which is in contravention to Section 24 (3) (b) of I B Code and Regulations 19(1), 21 (3) (iii) and 23 of the IBBI Regulations. Thus, the RP has failed to perform the duties of Resolution Professional as provided under Section 25 of the I B Code. 33. With the aforesaid, it is apparent that there has been material irregularity in exercising of powers by the RP during the Corporate Insolvency Resolution Period. Therefore, the Impugned order as well as the Resolution Passed in 9th 10th a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
