9911796707
TMI Blog2021 (12) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... Committee of Creditors of Amtek Auto Limited through Corporation Bank (hereinafter referred to as the 'COC') has preferred the present appeal. 2. The present appeal, as such, has a chequered history. 3. Pursuant to an application made under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the 'IBC'), the corporate insolvency resolution process was initiated against Amtek Auto Limited - Corporate Debtor on 24.07.2017. A resolution professional was appointed. An advertisement was published by the resolution professional inviting prospective resolution applicants to submit a Resolution Plan by 31.08.2017. The Resolution Plans submitted by respondent No.3 herein - Deccan Value Investor LP (hereinafter referred to as the 'DVI') and respondent no.2 herein - M/s Liberty House Group Private Limited (hereinafter referred to as the "Liberty") were considered by the COC. However, DVI withdrew its Resolution Plan and therefore the revised plan of Liberty was considered and approved by the COC on 2.4.2018. Subsequently, the Resolution Plan submitted by Liberty came to be approved by the National Company Law Tribunal, Chandigarh Bench, Chandigarh (hereinafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt and order disposed of the appeal filed by the COC and rejected the prayer for exclusion of time. Consequently, virtually ordered the liquidation of the Corporate Debtor. 4. Feeling aggrieved and dissatisfied with the impugned judgment and order dated 16.08.2019 passed by the appellate authority, the COC has preferred the present appeal contending inter alia that (a) the Corporate Debtor is financially viable entity and there is enough interest in the market for submission of a resolution plan for the Corporate Debtor; (b) Resolution of the financial affairs of a distressed company is primary aim of the Code and a failure/infirmity on the part of a resolution applicant ought not to undermine the primary mischief sought to be resolved; (c) Maximisation of the value of the assets of the Corporate Debtor is imbedded in the Code and even forms the part of its Preamble and therefore, an opportunity ought to be granted to the Committee of Creditors to make an attempt at resolution specially keeping in view the availability of suitable resolution applicants in the market; and (d) Liberty, by its deliberate failure in implementing the Approved Resolution Plan, has defrauded the Adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether. By a detailed order dated 23.02.2021, this Court dismissed the application for rectification filed by the DVI of the order of this Court dated 18.06.2020 instituted by the DVI. 5.3 While rejecting the said application, this Court specifically observed that DVI's application for rectification is an attempt to renege from the resolution plan which it submitted and to resile from its obligations. It was further observed that this is a devious attempt which must be disallowed. Simultaneously, this Court also dismissed the contempt petition. However, while dismissing the contempt petition, it is observed in para 38 as under: "38 The issue which needs to be addressed is whether recourse to the contempt jurisdiction is valid and whether it should be exercised in the facts of this case. Undoubtedly, as we have noted earlier, the conduct of DVI has not been bona fide. The extension of time in the course of the judicial process before this Court enures to the benefit of DVI as a resolution applicant whose proposal was considered under the auspices of the directions of the Court. DVI attempted to resile from its obligations and a reading of its application which led to the passing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the application for rectification moved by DVI or the contempt petition moved by the CoC." 5.4 While dismissing the application for rectification and disposing of the contempt proceedings, this Court ultimately concluded and directed as under: "39 For the above reasons, our conclusions and directions are that: (i) There is no merit in the application for rectification moved by DVI. IA No. 58156 of 2020 in Civil Appeal No 6707 of 2020 shall stand dismissed; (ii) It is not expedient in the interest of justice to pursue the contempt proceedings. The Contempt Petition (C) No. 524 of 2020 in Civil Appeal No. 6707 of 2019 shall accordingly stand dismissed, subject to (iii) below; (iii) In terms of the submission which has been made by DVI before this Court and even otherwise, as a consequence of the dismissal of its IA on 18 June 2020, it 30 shall not set-up a plea for force majeure in the proceedings which are pending before the NCLAT in appeal against the order of the NCLT approving the resolution plan; and (iv) The appeal filed by DVI against the approval of the resolution plan by the NCLT shall peremptorily be heard and disposed of by the NCLAT not later than within a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 500 Crore, i.e., the upfront infusion amount ("Upfront Cash Amounts") under DVI's Resolution Plan to the Indian branch of Standard Chartered Bank (DVI Affiliate's custodian bank) for settlement of debt under DVI's Resolution Plan. DVI is currently awaiting details of Amtek's designated accounts in which such Upfront Cash Amounts are to be remitted on the closing date, as may be agreed to between the members of the IMC for implementation of DVI's Resolution Plan. It is further stated that DVI undertakes to disburse this money in accordance with the terms of DVI's Resolution Plan, as and when such closing date is achieved." Under the Resolution Plan, the following steps are to be undertaken - "a) Delisting of Amtek's equity share capital from the stock exchanges - Completed. b) Increase of authorised share capital of Amtek and completion of necessary filings - Completed. c) DVI and/or its affiliate to subscribe to the equity shares of Amtek by infusing nominal amounts of INR 5,00,000 ("Nominal Infusion") - Ongoing. d) Debt identified as unsustainable to be converted into equity and equity to be issued and allotted to the creditors ("Unsustainable Equity Allotment") - O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the status report the DVI has stated that DVI has been committed towards its approved resolution plan and has been taking active steps towards its implementation. 8. Under the approved resolution plan, both the parties have to fulfil their obligations. The Corporate Debtor has also to perform its obligations simultaneously so that the amount of Rs. 500 crores be transferred to the financial creditors/lenders of the Corporate Debtor. It is the case on behalf of the respective parties that the aforesaid obligations are to be performed mutually and simultaneously. It is reported that Implementation and Monitoring Committee (IMC) has been constituted comprising of resolution professional, three identified lenders of the Corporate Debtor and nominee of DVI to supervise the implementation of the resolution plan. 9. The approved resolution plan has to be implemented at the earliest and that is the mandate under the IBC. As per Section 12 of the IBC, subject to sub-section (2), the corporate insolvency resolution process shall be completed within a period of 180 days from the date of admission of the application to initiate such process, which can be extended by a further period of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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