TMI Blog2021 (1) TMI 1231X X X X Extracts X X X X X X X X Extracts X X X X ..... r as per Section 33 (3) of the Code - A liquidation proceeding shall be initiated only when the Corporate Insolvency Resolution Process fails. Section 33 of the Insolvency and Bankruptcy Code, 2016 sets out the conditions laying down three scenarios wherein liquidation proceedings can be initiated against the Corporate Debtor. In a situation where a Resolution Applicant succeeds as Corporate Debtor but it fails to comply with its assurance in terms of the resolution plan, what step is to be taken has already been laid down in Sub-Section (3) of Section 33 of the I B Code. The expression person aggrieved does not include a person who suffers from a psychological or an imaginary injury; a person aggrieved must, therefore, necessarily be one, whose right or interest has been adversely affected or jeopardized - It is significant to point out that pre-occupation of the I B Code with timely resolution of insolvency is an important factor. In so far as Liquidation is concerned, it destroys the organizational capital etc. I B Code allows Liquidation only on failure of CIRP and it facilitates/encourages resolution in several manners. This Bench approved the Resolutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Technical) Since all these applications are interconnected and the facts are similar, they are disposed of by this common order. MA/25/KOB/2021 1. This application has been filed by an ex-employee of the Corporate Debtor Shri. N P Rajan, under Section 33(3) of the Insolvency and Bankruptcy Code,2016 seeking the following reliefs a) That the Hon'ble Adjudicating Authority be pleased to allow the present Application by passing an order for liquidation of the Corporate Debtor as a going concern; b) That the Hon'ble Tribunal may pass an order forfeiting the performance security and to initiate penal action as per section 74 (3) of The Insolvency and Bankruptcy Code, 2016. 2. This Interlocutory Application has been filed under Rule 11 of the National Company Law Tribunal Rules, 2016 seeking an interim order restraining the 1st Respondent from utilizing the land belonging to the Corporate Debtor under resolution for running a rubber industry in the name and style Kerala Rubber Ltd. IA (IBC)/ 190/ KOB/ 2O21 3. The applicant in MA (IBC)/ 25/KOB/2021 has filed this application under Rule 11 of the National Company Law Tribunal Rules, 2016 seeking implea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Out of the six PRAs, the Applicant received Resolution Plans only from the following two Prospective Resolution Applicants: (i) Kerala Industrial Infrastructure Development Corporation (KINFRA); and (ii) Sun Paper Mills Ltd. 7. The CoC in its 10th meeting held on 24.12.2020, after due deliberation, approved the Resolution Plan of KINFRA with the voting share of 92.72%, which is more than the required percentage of 66% for approval of the Resolution Plan under Section 30(4) of IBC. Accordingly, a Letter of Intent (LOI) dated 06.01.2021 was issued by the Applicant to the Successful Resolution Applicant (SRA) and requested them to submit the Performance Bank Guarantee ( PBG ) within two working days of receipt of the LOI. The SRA vide letter dated 08.01.2021 accepted the Letter of Intent unconditionally and subsequently furnished the Performance Bank Guarantee of ₹ 14.5 crores, which is 10% of the Resolution Amount. 8. On filing IA(IBC)/ 21/KOB/2021 along with the Resolution Plan of the SRA, this Tribunal vide its order dated 29.01.2021 approved the Resolution Plan submitted by Kerala Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal. 14. The learned counsel further argued that the Resolution Professional whose role has come to an end is still acting as if he is the CEO of the Company and filing certain forms even after completion of CIRP. The Form GNL-2 with Form DIR-12 as an attachment in the form seems to have been filed on 21,06.2021 with the consent in Form DIR-2 from each purported Board member dated 14.06.2021. The Registrar of Companies, Kerala has approved the Form on 17.07.2021 but the master data concerning the Board of Directors of the CD has not been changed. The purported Board has been constituted before getting consent from Directors which is in violation of Section 152(4) and (5) of the Companies Act,2013. 15. It is also stated that the failure in complying with the timelines in the Resolution Plan and deviation from the Approved Plan has caused great prejudice to all the stakeholders, the workmen, and employees, and the society at large. Hence, he has stated that, the only course of action now to be taken is to order liquidation of the Corporate Debtor. 16. To fortify the argument that the Resolution Applicant has modified the action plans without any right or authority and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncern and the latter will be functioning with full capacity as envisaged under the approved Resolution Plan and all steps are initiated for the revival and restart of the operations of the Corporate Debtor by the Resolution Applicant- M/s KINFRA. 20. It is further stated that it is an established principle of law that the primary objective of the Insolvency and Bankruptcy Code, 2016 is resolution and not liquidation. The general trend followed by the Indian judiciary is that if there are good chances of resolution and the Corporate Debtor can be kept as a going concern, then all endeavors shall be taken to resolve the Company and liquidation shall be the last resort. To fortify their argument, the learned counsel appearing for them has cited the following case laws: i. Swiss Ribbons Pvt. Ltd. Anr. V. Union of India Ors., (2019) 4 SCC 17 ii. Action lspat v. Shymn Mettalics, (2021) 2 SCC 641 iii. Essar Steel v. Satish Gupta, (2020) 8 SCC 531 iv. Eb ix Singapore v. CoC of Educomp Solutions, 2021 SCC OnLine SC 707 v. Ghanshyam Mishra v. Edelweiss, 2021 SCC OnLii4e SC 313 etc 21. The Respondents have also stated that in furtherance of the approved Resolution P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h March 2021. However, he has suppressed the said fact from this Tribunal in this application. The present application has been filed suppressing material facts before this Tribunal. 25. It is also stated that RP had handed over the assets and records of the Company on 2nd February 2021 to KINFRA as directed by this Tribunal. However, RP owes a duty to provide all assistance to the Monitoring Committee and Resolution Applicant whenever requested for the smooth transition and implementation of the Resolution Plan. Such assistance was provided free of charge to the Corporate Debtor, Monitoring Committee, and to the Resolution Applicant by him. 26. He has also stated that the objective of the Code is to bring resolution to the Corporate Debtor and not liquidation. The applicant has no locus standi to file this application under Section 33(3) of the Code after reaping the benefits of the Resolution Plan. IA (IBC)/ 151/ KOB/ 2O21 27. In the application, the applicant stated that, in view of the deliberate contravention of the provisions of the Resolution Plan, the Applicant filed Miscellaneous Application (MA(IBC)/25/KOB/2021) under Section 33(3) of the Insolvency and Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, Chennai-600 008 is the lead bank of the CoC to be impleaded as an additional respondent. Findings: 32. We have heard the learned counsel for the applicant Shri. Abhilash Nediyalil Abraham, learned counsel for the former Resolution Professional Shri. Vinod P. V, learned counsel for Resolution Applicant- Shri. Chithrash Vijayavegia and had carefully gone through all the records/ documents produced. 33. In the backdrop of the above facts, the question which arises for our consideration is as to whether the applicant has any locus standi to file the above applications, especially for liquidating the Corporate Debtor when a Resolution Plan has been already approved by this Tribunal and the Resolution Applicant has taken over the Corporate Debtor and its properties, as also the revival of the Corporate Debtor factory is under process. 34. If the Corporate Debtor acts in a manner that infringes the norms of the Resolution Plan, then that can be contested. Moreover, any stakeholder s right stands violated as a consequence of this infringement, he can make an application to the Adjudicating Authority for liquidation of the Corporate Debtor as per Section 33 (3) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company is put under liquidation. 39. Vide order dated 29.01.2021 in IA(IBC)/21/KOB/2021, this Bench approved the Resolution Plan submitted by Kerala Industrial Infrastructure Development Corporation (KINFRA), a Statutory authority of the Government of Kerala pursuant to the approval of the Resolution Plan by the COC with 92.72% voting rights. Accordng to the learned counsel for RP, KINFRA has complied with the financial commitment under the plan against all stakeholders and paid the Resolution Amount of ₹ 145.60 Crore within 45 days from the approval of the Resolution Plan as per the timeline provided under the Plan. Ie., ₹ 70.80 Crores was paid on 02.03.2021 and the balance ₹ 70.80 Crores was paid on 20.03.2021 to the Bank Account no. 2056118107 of Hindustan Newsprint Limited maintained at Central Bank, Peruva Branch for distribution among stakeholders. The claim of the applicant was also settled in accordance with the Resolution Plan on 19th March 2021 paying ₹ 12,87,926 within 45 days as provided under the Resolution Plan. The mere allegation that CoC has not constituted the Monitoring Committee and that the conduct of the first meeting of the purpor ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
