TMI Blog2022 (6) TMI 987X X X X Extracts X X X X X X X X Extracts X X X X ..... at the said Letter as EOI without any reference of the compliance of the terms and conditions of the EOI. Hence it is apparent that the letter submitted is all hypothetical when the Applicant CD itself couldn t pay the dues to the FCs and had filed application under Section 10 of IBC for CIRP. The question of the Liquidation does not arise, as claimed by the Applicant here, when the Resolution plans received are under consideration. It is clear that the intent of the Applicant is only to delay and defeat the CIRP process of the Corporate Debtor by filing this type of IA. The IBC process shall not be allowed to misuse and CIRP has to be completed in time in the interest of all stake holders - Application dismissed. - IA (IBC)/30/GB/2022 in C.P. (IB) No. 18/GB/2021 - - - Dated:- 21-6-2022 - Hon ble Shri Rohit Kapoor, Member (J) And Hon ble Shri Prasanta Kumar Mohanty, Member (T) ORDER [Per: Hon ble Shri Prasanta Kumar Mohanty, Member (T)] 1. This Application has been filed by Mr. Kamal Kumar Harlalka [Director (Suspended Board) of CD-R.S.H Agro Products Ltd] under section 60(5) of the Insolvency and Bankruptcy Code, 2016 read with Rule 11 of the NCLT Rules, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... group of investors to support them in submitting a viable and suitable resolution plan and as the COC has approved to apply for three months extension to this Hon ble Tribunal. It was further averred in the said letter that the extended time will not be disturbed as they will submit the proposal within 10 days of issuance of requisite documents by the Resolution Professional for submission of the Resolution Plan. 2.6 It was further averred in the said letter that the eligibility condition prescribed under the expression of interest published on 05.03.2022 preclude the existing promoter from applying as a Resolution Applicant and the same is the violation of section 240A of the Insolvency and Bankruptcy Code, 2016 which permits promoters of Micro, Small and Medium Enterprises (MSME) to bid for their stressed assets. 2.7 Amongst others, it was further averred that there is an express provision under section 240A of IBC 2016, that existing promoters can apply as a Resolution Applicant, and as conditions prescribed in the expression of interest published on 05.03.2022 prohibit the existing promoters to apply as a Resolution Applicant and submit Resolution plan because if an acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in a catena of cases herd at maximum endeavour should be made for Resolution of the plan and not for liquidation and dissolution of Corporate Debtor. 2.14 None of the grounds as stated in the reply furnished by the IRP-in its letter dated 03.5.2022 are tenable, since, the promoters are the persons who has business wisdom and are capable of understanding the complexities which may arise in adopting a resolution and therefore, are in a better position to put forth better resolution plans for revival of the corporate Debtor which is the aim and object of the Insolvency and Bankruptcy code, 2016. Besides these and imperatively, the RP has failed to take note of the fact that the Corporate Debtor is an MSME and section 240 A of the Code, 2016 carves an exception for the said unit, in order to protect such units from falling into prey of sick units. Therefore, the actions impugned being letter dated 03.5.2022 warrants judicial intervention of this Hon ble Tribunal for securing ends of justice. Further there is no inordinate delay on the part of the Applicant and the Resolution plan has not yet been approved under section 30(2) of the Insolvency and Bankruptcy Code, 2016 and COC als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records and the RP do not admit anything which are not consistent with the records of the case. 3.4 The statements made in paragraph 3 of the Application are not correct and the RP denies the same and in this connection the Deponent states that there were absolutely no violation or misrepresentation on the part of the RP or for that matter the CoC as the facts as narrated in the Application itself shall stand to contradict the contentions of the Applicant. 3.5 With regard to the statements made in paragraphs 4, 5 and 8 of the Application, the RP states that the Respondent No. 1 after having been appointed as the Resolution Professional to initiate CIRP proceedings had issued and published an Expression of Interest (EOI) in Form G on 05.03.2022 and the said EOI had been published in the two wide circulated newspapers namely The Assam Tribune and Asomiya Pratidin dated 05.03.2022. The invitation of EOI also included detailed timeline for the set of procedures to be followed right from the submission of EOI, publication of profession list of Prospective Resolution Applicants, submissions of objection of professional list, circulation of RFRP (Request for Resolution Plan), su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 016 provides for exemption only from the applicability of Clauses (c) and (h) of Section 29A of the Code. The other eligibility criteria set forth in Section 29A as well as the criteria laid down by RP with the approval of CoC as per the provision of Section 25(2) of the Code shall continue to be applicable to all Resolution Applicants including the Promoters of the Corporate Debtor. 3.8 The eligibility criteria prescribed for EOI for submission of the Resolution Plan of the Corporate Debtor duly approved by the Committee of Creditors are: a) A Minimum Tangible Net Worth (TNW) of Rs. 20.00 Crores as on 31st March, 2021 and b) Turnover and profitability during the past 3 years c) Past Business Experience in trade or industry having average three years turnover of at least Rs. 15 Crores. d) Deposit of Rs. 50,00,000.00 (Rupees Fifty lakhs only) as EMD 3.9 The clear cut admission on the part of the Applicant in his Representation dated 02.05.2022 about his inability to comply with the clauses 2a, 2b, 2c and 2d of his Representation. The extract of the said contention had been highlighted herein below for better understanding of the eligibility criteria of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e EOI themselves speaks volume of the purpose and intent of the Applicant in defeating the entire Resolution Process of the Corporate Debtor through delay and filling such frivolous application. It is also crystal dear that the balance of convenience strictly lies in favour of the Respondent No. 1 (RP) and CoC for successful completion of the Resolution in Process. It is the Applicant who had continuously been causing uncalled hindrances both legal and technical for stopping the entire process at any cost. 3.12 The submissions and the relief sought in the paragraphs 18 and VI of the application are not tenable in law and in facts and therefore the same cannot be granted/allowed by this Hon'ble Tribunal and the Deponent submits that the Instant Application may be dismissed with cost. 4. The Applicant vide his written submissions dated 17.06.2022, further submits that: 4.1 The provisions of section 240A of the Code, 2016 has over ridding effect upon any other provisions of the Code, 2016 including section 25(h). The RP in the guise of exercise of power under section 25(h) of the Code, 2016 can not put such stringent eligibility criteria to render the intent of legislat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sible and fulfils other criteria as laid down by the Insolvency and Bankruptcy Board of India. 4.5 In Swiss Ribbons Pvt. Ltd. and Another vs- Union of India and Others- 2019 SCC Online SC 73, the Hon'ble Apex Court made it clear that I B Code envisages maximization of value of Assets of the Corporate Debtors so that they are efficiently run as going concerns and in turn will promote entrepreneurship, the liquidation can be ordered as a last resort if there is no Resolution Plan and the Resolution Plans submitted are not fulfilling the criteria laid down therein. 4.6 In the present case the RP has sought for 3 months extension for completion of the CIRP. This Hon'ble Tribunal has also granted 3 months extension to the RP for completion of the CIRP vide order dated 13.05.2022. As such, nobody will be prejudiced if the Applicant has given a chance to submit EOI/Resolution Plan by this Hon'ble Tribunal. The Applicant undertakes to submit the said EOI/Resolution Plan within a period of 10 days from the date of the order by this Hon'ble Tribunal. 4.7 This Hon'ble Tribunal will appreciate that the opposition of the RP for allowing the Applicant to file/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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