TMI Blog2022 (5) TMI 924X X X X Extracts X X X X X X X X Extracts X X X X ..... ectors. It is also seen that the second Appellant Mr. Sushil Govindrao Uttarwar is the common Director of the Corporate Debtor as well as the present Appellant No. 1 Company. Further in the Application filed by the Appellants herein seeking intervention in the Section 7 Petition filed by SIDBI, it is submitted that they have acquired 44% shareholding of the Corporate Debtor Company in November 2018 and arrayed themselves as Directors . It is significant to mention that a copy of the Master Data of the Corporate Debtor Company as per the records of the MCA Website was annexed to the said Application, in support of their locus standi for intervening in the matter. Therefore, the contention of the Appellants herein that they were not Directors of the Corporate Debtor Company , is untenable. This Tribunal is of the considered view that the documentary evidence on record clearly establishes that the entire loan was converted into equity and hence no claim is maintainable under the guise that this amount be treated as a Financial Debt - this Tribunal holds that the Appellants are Related Parties and there are no substantial grounds to interfere with the well-reasoned Ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in February, 2019 and were made signatory to operating the Bank Accounts of the Corporate Debtor . It was averred that the Appellants had vacated the posts of Additional Director since an AGM was never conducted inducting them as a Director, but the RoC portal was not updated and they continued to remain as Additional Directors. It was stated that the Appellants had followed up with the Directors of the Corporate Debtor regarding the acquisition of 100% shares as they had infused huge amounts towards construction activity, but there was no response. It was further averred that the Appellants came to know about some transactions entered into by the Directors of the Corporate Debtor in September, 2019 and also came to know about the filing of the C.P. (IB) No. 2995 of 2019 by SIDBI against the Corporate Debtor . At this juncture, the Appellants had filed a Miscellaneous Application No. 3182 of 2019 seeking to intervene on the ground that they are the owners of the Company and have entered into an MoU for purchasing 40% shares of the Corporate Debtor and that they are in possession of the property and looking after all the day-to-day expense of the Corporate Debtor Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to SIDBI as an amount paid on behalf of the Corporate Debtor , in return for which, the Appellants would have got acquisition of further shares in the Companies, and therefore the amount is not a Financial Debt . 4. Submissions of the Learned Counsel appearing on behalf of the Respondent/Resolution Professinal: Learned Counsel appearing for the Respondent submitted that the Resolution Plan was already approved by a majority of the Members of the CoC on 11/03/2022 and an Application was preferred under Section 30 by the RP before the Adjudicating Authority, which Application has been heard and reserved for Orders. It is submitted that being the Shareholders, the Appellants are Related Parties of the Corporate Debtor and have previously filed an M.A. 3182 of 2019 with similar prayers, arraying themselves as Directors of the Corporate Debtor Company , which Application was dismissed by the Adjudicating Authority. They were not only the Directors but were also controlling the affairs of the Company and are squarely covered under Section 5(24)(a) of the Code. The claim amount which the Appellant wants to be treated as Financial Debt was paid by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure that those entities which are related to the Corporate Debtor can be identified clearly, since their presence can often negatively affect the insolvency process. 7. A brief perusal of the Master Data of the Corporate Debtor reflects the fact that Appellants 2 3 continue to be Directors. It is also seen that the second Appellant Mr. Sushil Govindrao Uttarwar is the common Director of the Corporate Debtor as well as the present Appellant No. 1 Company. Further in the Application M.A. No. 3182 of 2019 filed by the Appellants herein seeking intervention in the Section 7 Petition filed by SIDBI, it is submitted that they have acquired 44% shareholding of the Corporate Debtor Company in November 2018 and arrayed themselves as Directors . It is significant to mention that a copy of the Master Data of the Corporate Debtor Company as per the records of the MCA Website was annexed to the said Application M.A. 3162/2019, in support of their locus standi for intervening in the matter. Therefore, the contention of the Appellants herein that they were not Directors of the Corporate Debtor Company , is untenable. 8. This Tribunal is of the considered view that the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an two directors in common between the corporate debtor and such person; or (iii) interchange of managerial personnel between the corporate debtor and such person; or (iv) provision of essential technical information to, or from, the corporate debtor; The Appellants were Directors of the Company and were also managing the day-to-day affairs of the Company as per their own submissions in M.A. 3182 of 2019, which is part of the record. It is significant to mention that the second Appellant in his capacity as the Suspended Directors has accepted the Notices, Agenda and the Minutes of the CoC Meetings which is against the provisions of Section 21(1) of the Code: Section 21(1) of the IBC requires the IRP to form the CoC for the CIRP of the Corporate Debtor. The membership of the CoC is determined in accordance with Section 21(2), which reads thus: (2) The committee of creditors shall comprise all financial creditors of the corporate debtor: Provided that a financial creditor or the authorised representative of the financial creditor referred to in sub-section (6) or sub-section (6-A) or sub-section (5) of Section 24, if it is a related party o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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