TMI Blog2021 (7) TMI 858X X X X Extracts X X X X X X X X Extracts X X X X ..... d timeline for CIRP proceedings was running out. The Learned Adjudicating Authority have rightly exercise this power and there is no merit in the Appeal and is accordingly dismissed. - COMPANY APPEAL (AT) (INSOLVENCY) NO. 786 OF 2020 - - - Dated:- 20-7-2021 - [Justice Anant Bijay Singh] Member (Judicial) And [Ms. Shreesha Merla] Member (Technical) For the Appellant : Mr. Rajdendra Beniwal, Mr. Chirag Gupta, Mr. Kumar Sumit Mr. Anil Kumar (RP), Advocates. For the Respondent : Ms. Honey Satpal, Ms. Niti Arora Sachar Mr. Samriddh Bindal, for R-1. Mr. Kiran Shah (CA), Mr. Siddharth Tandon Mr. Saurabh Kalia, for R-2. JUDGEMENT Anant Bijay Singh (J) 1. The Instant Appeal has been filed on behalf of the Appellant- Anil Kumar Ex. Interim Resolution Professional (RP) of M/s. KSL Industries Limited, Gurgaon, Haryana being aggrieved and dissatisfied with the Order dated 28.07.2020 passed by the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis on which the claim of 30 Non-Financial Institutions were admitted and how they were classified as Financial Creditors. (xii) But IRP/ RP replied that the said verification of the claims was still under process. (xiii) The shares of secured Financial Creditors was only 36.53%. (xiv) Further, the case is that in view of the said situation, the whole problem has aroused with regard to the appointment of IRP/RP as no majority could be reached into appointment of IRP/RP. (xv) Consequently, the instant application was filed bearing No. 691 of 2020 before the Adjudicating Authority. 3. The Learned Adjudicating Authority after hearing the parties passed the following orders:- 11. Under such circumstances, when there is a conflict and no consensus is reached by the majority of voting share to appoint the IRP/RP so proposed by the Applicant, it is expedient to appoint an independent IRP/RP to break any kind of stalemate 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. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m.] (3) The committee of creditors shall forward the name of the insolvency professional proposed by them to the Adjudicating Authority. (4) The Adjudicating Authority shall forward the name of the proposed resolution professional to the Board for its confirmation and a resolution professional shall be appointed in the same manner as laid down in section 16. (5) Where any disciplinary proceedings are pending against the proposed resolution professional under sub-section (3), the resolution professional appointed under section 22 shall continue till the appointment of another resolution professional under this section. (iv) Further, it was submitted that none of the powers under Section 22 27 were exercised rather the Adjudicating Authority have passed the Impugned Order invoking power under Rule 11 of the NCLT. So, the Impugned Order passed by the Hon ble Adjudicating Authority cannot be sustain by law and fit to be set aside and the Appeal be 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s submitted that one of the unsecured creditors had made an identical prayer of convening the meeting of CoC for appointment of Resolution Professional. However, the Learned NCLT in its Order dated 10.07.2020 passed the following Orders:- .During the pendency of I.A. No. 691/2019, various applications have been filed by the Unsecured Financial Creditors, intervening with regard to the appointment of the RP. However, during the pendency of these IAs, the matter was exhaustively heard, with regard to the issue of stalemate of appointment of RP. Meanwhile, there was a Lockdown due to Covid-19, consequent upon which, all the applications remained pending. On the other hand, on perusal of the records, it is found that the CIRP period of 180 days expired on 4th March 2020 and, thereafter, the same was extended for further 90 days, the said period has already been expired. Ld. Lawyer Mr. Nandish Chudgar submitted that a direction may be given to convene meeting of CoC for appointment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atus quo to be maintained. (xvi) This Tribunal passed the following order which is hereunder:- Since the prayer in the appeal is to set aside appointment of Mr. Kiran Shah as the Resolution Professional of the Corporate Debtor and Mr. Kiran Shah is stated to be discharging functions as Resolution Professional, it is clarified that the status quo is only in regard to his continuance as Resolution Professional and the same does not have any bearing on continuation of the IRP proceedings. I.A. is accordingly disposed of . Based on this submission, Learned Counsel for the Respondent No. 1 submitted that there is no illegality in the Impugned Order and accordingly there is no merit in the Appeal and the Appeal is fit to be dismissed. (xvii) Resolution Professional was also directed to file status quo during course of the hearing and they file the status report on 23.06.2021. The Status Report indicates that no sooner he was appointed that Resolution Professional in the case by NCLT 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 Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrangements for the same. 4.After receiving communications from erstwhile IRP, the present RP had immediately traveled to Silvassa, Dombivli, Bhiwandi, Kalmeshwar and Nagpur for taking the possession of the five properties so intimated by the erstwhile IRP. It is pertinent to mention that later on, it came to the knowledge of the present RP that the erstwhile IRP had mentioned the representative(s) of the Suspended Management and certain employees of the Corporate Debtor as his representatives and hereby, misguided the present RP and accordingly, the handover of those properties was done by the representative(s) of the Suspended Management and certain employees of the Corporate Debtor instead of the erstwhile IRP or his representative(s). 5.The Corporate Debtor is having total 11 properties at 6 different locations to the extent of the information available with the present RP till date. The Corporate Debtor is also having a subsidiary company and the said company is also having a manufacturing 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad Bench, Ahmedabad for exclusion of certain period from the CIRP period on account of period consumed in litigation/legal proceedings as well as lockdown and other restrictions imposed due to global pandemic i.e., COVID-19 whereby the Hon ble Adjudicating Authority was pleased to exclude a period of 233 days for the first instance and a period of 121 days for the second instance. 13. The present RP has also filed an application before the Hon ble Adjudicating Authority i.e., the Hon ble National Company Law Tribunal, Ahmedabad Bench, Ahmedabad against the Suspended Management as well as the erstwhile IRP of the Corporate Debtor under the provisions of section 19 read with section 60 (5) of the Insolvency and Bankruptcy Code, 2016 on account of their non-cooperation. In addition to the same, the present RP has appeared, attended and dealt with various other matters filed before the Hon ble Adjudicating Authority i.e., Hon ble National Company Law Tribunal, Ahmedabad Bench, Ahmedabad. 14. The present RP has assisted to complete the Transaction Audit which was conducted by the firm, namely, M/s. Chaturvedi and Chaturvedi, Chartered Accountants, who were appointed to review ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein could not provide leadership to CIRP proceedings and further there was clash between the Secured and Unsecured Creditors and timeline for CIRP proceedings was running out. (vi) So, the Learned Adjudicating Authority in order to shape the CIRP proceedings on an Application under Rule 11 filed by Respondent No. 1/ Allahabad Bank, taking note of the fact that there is conflict between the Secured and Unsecured Creditors and no commencement reached by majority of voting share to appoint the Appellant herein as IRP/RP invoked thereunder part in Rule 11 and rightly have passed the Impugned order. (vii) Further, from the perusal of the Status Report submitted by the Respondent No. 2- M/s LSL Industries Ltd., through Mr. Kiran Shah on 29.06.2021, which has been discussed in detail, it reveals that substantial progress in the CIRP proceedings had been made. (viii) Taking all these circumstances and also the fact that the Appellant has only argued on one question of law which was formulated by this Tribunal under this Order dated by 17.09.2020, is only about the exercise of power of Rule 11 of NCLT by the Learned Adjudicating Authority in the facts of this case. (ix) We are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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