TMI Blog2022 (2) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... case with Chapter-VI of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016 . Here the determining factor is that the Appellant was Director of the CD till 01.11.2016 and same was much prior to initiation of CIRP on 11.09.2020 - The DIN of the Appellant has been disqualified by the Registrar of Companies (ROC) in accordance with provision of Section 164(2) of the Companies Act, 2013 vide order dated 21.06.2017 and hence, the Appellant has already vacated the office of the Director in accordance with section 167 of the Companies Act, 2013. The Appellant was not part of the suspended Board of Directors of the CD. No records reflects that the Appellant has challenged his cancellation of DIN with any appropriate Authority. No board meeting in which he has participated since cessation of his vacation of office after DIN cancellation were produced before us. Hence, the Appellant is not part of the Suspended Board of Directors and he cannot challenge the decision of the CoC as Hon ble Apex Court has made amply clear that the Commercial Wisdom of the CoC is non- justiciable. Appeal dismissed. - Company Appeal(AT) (Ins)No. 625 of 2021 - - - Dated:- 31-1-202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unity to pursue the Resolution Plan which were considered or not considered by the CoC. The Appellant has cited the Judgment of Hon ble Apex Court in Vijay Kumar Jain Vs. Standard Chartered Bank (2019) 20 SCC 455, held in para 9 read as follows: 9. This statutory scheme, therefore, makes it clear that though the erstwhile Board of Directors are not members of the committee of creditors, yet, they have 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 Section 25(2)(i) . The Appellant has also cited the judgment of this Tribunal in Amit Suresh Bhatnagar Vs. Bhuvan Madan, RP for Diamond Power Infrastructure Ltd. In CA(AT) (Ins) No. 1029 of 2020, held in para 32 33 as follows: 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) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Code and has failed for liquidation within 237 days of commencement of CIRP which is much earlier prescribed time limit. Hence, the impugned order dated 05.05.2021 ought to be set aside. 8. The Adjudicating Authority has stated at para 4, 3 5 of the impugned order dated 05.05.2021 (appearing at page 30 of the Appeal paper book) as stated below: 4. No one appeared on behalf of the Suspended Management even after issuance of notice. The Suspended management is also found absent in the said meeting held on 08.03.2021. 3. The CoC in its 8th meeting held on 08.03.2021 resolved to liquidate the CD authorizing the RP to file application under Section 33 of the Code before this Adjudicating Authority. 5.In view of the above situation, it is also pertinent to mention herein that recently the Hon ble Supreme Court of India in its judgment passed in Civil Appeal No. 8766-67 of 2019 Committee of Creditors of Essar Steel India Limited through Authorized Signatory Vs. Satish kumar Gupta Ors. Observed as follows: The commercial wisdom of the CoCs cannot be interfered into by the adjudicating authority nor the appellate authority has been endowed with the jurisdiction to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onment for a period of seven years or more, he shall not be eligible to be appointed as a director in any company; (e) an order disqualifying him for appointment as a director has been passed by a court or Tribunal and the order is in force; (f) he has not paid any calls in respect of any shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last day fixed for the payment of the call; (g) he has been convicted of the offence dealing with related party transactions under section 188 at any time during the last preceding five years; or (h) he has not complied with sub-section (3) of section 152. 1 [(i) he has not complied with the provisions of sub-section (1) of section 165.] (2) No person who is or has been a director of a company which- (a) has not filed financial statements or annual returns for any continuous period of three financial years; or (b) has failed to repay the deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay interest due thereon or pay any dividend declared and such failure to pay or redeem continues for one year or more, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor in case of orders referred to in clauses (e) and (f)- (i) for thirty days from the date of conviction or order of disqualification; (ii) where an appeal or petition is preferred within thirty days as aforesaid against the conviction resulting in sentence or order, until expiry of seven days from the date on which such appeal or petition is disposed of; or (iii) where any further appeal or petition is preferred against order or sentence within seven days, until such further appeal or petition is disposed of.] (g) he is removed in pursuance of the provisions of this Act; (h) he, having been appointed a director by virtue of his holding any office or other employment in the holding, subsidiary or associate company, ceases to hold such office or other employment (2) If a person, functions as a director even when he knows that the office of director held by him has become vacant on account of any of the disqualifications specified in subsection (1), he shall be punishable ((Omitted by the Companies (Amendment) Act, 2020, w.e.f. 21.12.2020[S.O. 4646(E) dated 21.12.2020], the words with imprisonment for a term which may extend to one year or .) with fine which shall not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intainable as the Appellant has also sought similar reliefs in IA/464(AHM) 2021 in CP(IB) / 482(AHM) 2019 before the Adjudicating Authority which was disposed off by Adjudicating Authority. 12. He has also stated that he has made every attempt for Revival/Resolution of the CD and has submitted the followings: a. The RP of the CD in 3rd meeting of CoC dated 11.11.2020 placed the agenda for initiation of EOI Process, however, the members of CoC in the said meting wished to take approval from their higher authorities, deferred to vote the said resolution and further requested to place the same in the next meeting. Thereafter, he has called for 4th meeting of CoC on 23.11.2020, wherein again the said resolution for initiation of EOI process was placed before the CoC for consideration. It is submitted that in the said meeting, the members of the CoC resolved for initiation of EOI process. It is submitted that pursuant to the said resolution, he has made public announcement in Form-G on 25.11.2020 in Times of India (English Edition) and Loksatta Jansatta (Gujarati Edition). b. The RP has received two EOIs from the Prospective Resolution Applicants, after the last date of EOI i.e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Steel India Limited Through Authorised Signatory Vs. Satish Kumar Gupta Ors in Civil Appeal No.8766-67 of 2019 held that the decision of Coc s Commercial Wisdom is made nonjusticiable and also held as such in Kalpraj Dharamshi Anr. Versus Kotak Investment Advisors Ltd. Anr. Civil Appeal Nos.29432944 Of 2020 And Jaypee Kensington Boulevard Apartments Welfare Association Ors. Versus Nbcc (India) Ltd. Ors Civil Appeal No. 3395 Of 2020. b. As far as Section 24(3)(b) of the Code is concerned, it is very much clear that the RP is to give notice for each meeting to the CoC members of the Suspended Board of Directors and so is the case with Chapter-VI of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016 . Here the determining factor is that the Appellant was Director of the CD till 01.11.2016 and same was much prior to initiation of CIRP on 11.09.2020. The DIN of the Appellant has been disqualified by the Registrar of Companies (ROC) in accordance with provision of Section 164(2) of the Companies Act, 2013 vide order dated 21.06.2017 and hence, the Appellant has already vacated the office of the Director in accordance with section 167 of the Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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