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TMI Blog2021 (7) TMI 858X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble National Company Law Tribunal, Ahmedabad Bench, Court No. 2 (Adjudicating Authority) in I.A No. 90/ 2020 in I.A. 691 of 2019 in C.P. (I.B.) No. 397/NCLT/AHM/2018, whereby and where under in I.A. No. 691 of 2019 filed in C.P. (I.B.) No. 397 of 2018 filed by Allahabad Bank (Respondent No. 1) under Section 60 (5) of the Insolvency & Bankruptcy Code, 2016 (in short "IB Code")the Learned Tribunal have appointed a new Interim Resolution Professional, replacing the Appellant herein. The Bench while exercising its power under 'Rule 11' ofNCLT Rule, 2016 allowed in Interlocutory Application and appointed Mr. Kiran Shah as a new IRP/ RP in the CIRP proceedings. 2. The number of facts of this case is as follows: - (i) The C.P. (I.B.) No. 397 of 2018 was filed under Section 7 of Insolvency & Bankruptcy Code, 2016 by way of M/s. Abhinandan Multitrade Pvt. Ltd. / Respondent No. 4 which was admitted under Order dated 06.09.2019 and whereby the Appellant was appointed as Interim Resolution Professional. (ii) After Appellant took over the charge of IRP and made public announcement and thereafter Committee of Creditors (in short "CoC") was constituted. (iii) The first CoC Meeting w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e between the Financial Creditors. Moreover, the very object of IB Code is to complete the CIRP in the time bound manner and if the dispute with regard to the IRP will continue, in that event, the very object of the IB Code will get frustrated. The IB Code prescribes timelines for various activities of the CIRP. It is mandatory to complete a CIRP within 180 days, extendable by a one-time extension of up to 90 days [M/s. Surendra Trading Company v. M/s. Juggilal Kamlapat Jute Mills Company Limited & Ors.]. 12. Though as per Section 7 of the IB code, the Financial Creditor has the prerogative to propose the name of the IRP/RP and thereafter, they may change it by filing an application under Section 22 of the IB Code. However, to resolve this issue and to end the stalemate between the secured and unsecured Financial Creditors, this Bench in exercise of power under Rule 11 of the NCLT Rules 2016, do hereby appoint Mr. Kiran Shah as the new IRP/RP and direct him to convene the CoC meeting and complete the CIRP as early as possible. Further, the period which is consumed in deciding this Application as well as the lockdown period i.e. from 25.03.2020 to 31.05.2020 is exempted." 9. Subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed. 10. Submissions on behalf of the Respondent No. 1 (i) Respondent No. 1- Allahabad Bank (now Indian Bank) have also filed his Reply Affidavit during the course of the arguments. Respondent No. 1 referred to the Order dated 17.09.2020 issuing Notice Respondent No. 1 & Respondent No. 2 formulated the following questions. "Issue raised in this Appeal is that the expressed provision of law under I&B Code has been over ruled and Rule 11 of NCLT Rules, 2016 has been invoked to substitute the Appellant by another person as IRP which is legally unsustainable." (ii) Learned Counsel for the Respondent No. 1 further referred to the provisions of Rule 11 of National Company Law Tribunal Rules, 2016 ("NCLT Rules, 2016) which is reads hereunder 'Rule 11' inherent powers. "Nothing in these rules shall be deemed to limit or otherwise effect inherent powers of the Tribunal to make such Order "as may be necessary for the meeting the end of justice" of the inherent abuse of process of Tribunal." (iii) Learned Counsel for the Respondent No. 1 further submitted that from the perusal of the Impugned Order it transpires that the matter was listed before the NCLT 14 times since the first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of RP. Under such circumstances, if the matter will be sent for convening the meeting of Committee of Creditors, then there is every likelihood of stalemate between secured financial creditor and unsecured financial creditor as reflected from various IAs filed in recent past. In that event, every object of the IBC will get frustrated and the CIRP cannot be concluded within the stipulated time. In view to save the time, it is expedient to pass appropriate order in the IA No. 691/2019, the interest of justice, instead of lingering further for further argument. Heard the learned lawyers for both sides. (x) Learned Counsel for the Respondent No. 1 further submitted that as the timeline for completion of CIRP proceedings was reaching fast and in view of the stalemate between the Secured and Unsecured Creditors the CoC Meeting could not be held and there is likelihood that CIRP proceeding will expire without holding a Meeting of CoC. (xi) The Learned Counsel for the Respondent No. 1 further submitted that having no option, the Respondent No. 1 had filed an Application before the Adjudication Authority with a prayer to remove the Appellant and to appoint a fresh IRP/RP. (xi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ahmedabad Bench on 28.07.2020 and we obtained the order on 31.07.2020. (xviii) After hearing the Learned Counsel for the Appellant and Learned Counsel for the Respondents in this case Status Report was called from Respondent No. 2 on 23.06.2021 in a seal cover. (xix) On 05.07.2021 Learned Counsel for the Parties were further heard and the Status Report was further submitted by Learned Counsel for the Respondent No. 2 in a seal cover and it was opened in the Court and from the perusal of the Status Report which reads as under:- "3. Immediately after obtaining the copy of the order on 31.07.2020, the present RP had communicated with erstwhile Interim Resolution Professional (IRP) from 31.07.2020 itself and thereafter with the Suspended Management of the Corporate Debtor (since the erstwhile IRP failed to have complete control over the documents and records of the Corporate Debtor) requesting various data and documents as required for conducting the CIRP in respect of the Corporate Debtor. Although the list of data and documents, which was sought for by the present RP was exhaustive, the same was neither furnished by the erstwhile IRP nor furnished by the Suspended Management in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit at Kalmeshwar in the vicinity of Nagpur. 6.During the tenure of the erstwhile IRP, the erstwhile IRP had called total 3 (Three) meetings of the Committee of Creditors out of which third meeting could not be held owing to the stay order of the Hon'ble Adjudicating Authority. After the appointment of the present Resolution Professional of the Corporate Debtor, the present RP has called, convened and conducted total 5 (Five) meetings of the Committee of Creditors till date. During those meetings, various matters and issues were discussed and voted upon; which include approval of the remuneration and expenses by the Resolution Professional, appointment of professionals, publication of Form G for inviting Expression of Interest, approval of parameters and criteria for the Prospective Resolution Applicants, discussion on Information Memorandum, exclusion of CIRP period on account of ligation/ legal proceedings as well as lockdown and other restrictions due to global pandemic i.e., COVID-19, etc. 10.The present RP had duly published the Invitation for Expression of Interest in Form G after the approval from the members of the Committee of Creditors. The present RP had received Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to complete the Transaction Audit which was conducted by the firm, namely, M/s. Chaturvedi and Chaturvedi, Chartered Accountants, who were appointed to review and report on the avoidance transactions in terms of the Insolvency and Bankruptcy Code, 2016. 15. The present RP had also conducted various meetings and held multiple discussions with the major Lease Holder of the Corporate Debtor - PVR Limited and negotiated terms and conditions for fresh leave and license agreement which contributes to the considerable portion of the revenue of the Corporate Debtor. 16. It is required to apprise that during the tenure of the present RP, the significant amount of time was consumed and could not be effectively utilized due to resistance and non-cooperation of the members of the Committee of Creditors; specifically the Secured Financial Creditors by misinterpretation of the term "status quo" as mentioned by this Hon'ble Appellate Authority during the pendency of the present appeal as well as due to the lockdown and restrictions imposed from the month of February, 2021 to May, 2021 in various states throughout the country. 17. Despite the factual position as mentioned above, the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X
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