TMI Blog2022 (8) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... t and the said order has attained finality. Further, the Appellant filed its report before the Adjudicating Authority after receipt of affidavit from the Respondents. This Tribunal is also of view that the Appellant filed the present Appeal on 05.10.2020 whereas the limitation period expires on 09.02.2020 and the Appellant has not filed any application seeking condonation of delay. Even otherwise, this Tribunal cannot condone the delay beyond the period as prescribed under Section 61(2) of the I B Code, 2016. On this ground itself the Appeal is liable to be dismissed to the extent challenging the order dated 10.01.2020. However, this Tribunal has dealt with the issue even on merits to give a quietus to the litigation initiated by the Appellant. From the sequence of events, the Respondent have submitted scheme as directed by this Tribunal. The consequences thereof follow namely convening meeting of creditors and shareholders and filing an application before the Adjudicating Authority seeking approval of the scheme as per the directions of this Tribunal - The Appellant is a party even to the Appeal filed by the promoters before this Tribunal in appeal and subsequent to all othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Vide impugned order dated 05.05.2020 the Adjudicating Authority pleased to revoke the liquidation process of the Corporate Debtor to enable the Corporate Debtor in liquidation to revive and reconstruct by implementing the scheme of the Promoters. 5. It is submitted that the impugned order is also bad to the extent that it provide scope for erroneous interpretation in relation to payment of fees of the liquidator and the same is also contrary to Section 53 of the IBC read with Regulation 4(3), 42 and 44 of the IBBI (liquidation process) Regulations, 2016. The liquidator fee to be paid as per Clause 4.5 of the Scheme which provides that the liquidator s fee will be decided and approved by IBBI and the same will be paid in the same proportion and time as CIRP cost. As IBBI is not the Adjudicating Authority, the Hon ble NCLT vide impugned order dated 05.05.2020 determined and decided the liquidator s fee in terms of unamended Regulation 4 of the IBBI (liquidation process) Regulations, 2016 which is the correct finding, but left scope for erroneous interpretation of the impugned order dated 20.07.2020, by which the Hon ble NCLT held that the liquidator s fees will be payable on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st from claiming the amounts towards the Liquidator fees as immediately payable . 12. It is submitted that while approving the scheme vide its order dated 10.01.2020 the Hon ble Adjudicating Authority clearly noted that the Respondents were never disqualified under Section 29A of the Code, however, the Adjudicating Authority gave an opportunity to the Appellant and directed him to file a report with respect to in-eligibility of the Respondents under Section 29A of the Code. The Learned NCLT clearly noted in its order that at the time of liquidation the account of the Corporate Debtor was not a Non-Performing Asset as the amounts owed to the secured financial creditors were fully settled by the Respondents in December 2018 to the tune of Rs.39.75 crores out of total debt of Rs.39.75 crores. 13. The Appellant never even contested the issue of ineligibility of the Respondents before the Adjudicating Authority. Further the Appellant himself filed CA 1026/2019 for approval of the scheme before the NCLT. As per the recent amendment made under Regulation 2B of the Liquidation Regulation as inserted by notification dated 06.10.2019, any person ineligible for the reasons mentioned und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant has been in-charge of managing the Affairs of Corporate Debtor since the very initiation of CIRP of the Corporate Debtor and thus all the contemporaneous records of the Corporate Debtor as mentioned hereunder, continue to be in the control and possession of the Appellant. a. Books of Accounts including the bank account opened for liquidation; b. Income tax records up to the period 2019-20; c. Audited Balance sheets for 2017-18, 2018-19 and 2019-20; d. Tax audit reports, GST returns (filed copies), PF returns; e. ROC returns for 2017-18, 2018-19 and 2019-20, inter alia. f. Removal of charge from ROC for the assets secured. g. Files and the correspondences of the legal cases going on and attended by Liquidator. 17. It is submitted that the above-mentioned record till date have not ben handed over by the Appellant which clearly depicts that the Appellant disregards the facts that the Corporate Debtor is in the process of resuscitation and the Appellant is only concerned about his fees. 18. It is submitted that the Appellant is guilty of misrepresenting the facts in the appeal. The Appellant in the memo of parties still mentions that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers dated 10.01.2020 and 05.05.2020, hence the present appeal is barred by the principles of estoppel. 21. It is submitted that the CIRP cost was duly paid by the Respondents as per the directions of the Learned NCLT in its orders dated 15.05.2020 and 22.05.2020. 22. It is submitted that the conduct of the Appellant was in fact strongly deprecated by the Learned NCLT while passing the impugned order due to repeated and consistent endeavour to abuse his power and to derail the implementation of the scheme in order to suit his personal agenda which is most unbecoming of a Liquidator under the provisions of the Code. 23. It is submitted that the Appellant filed the present Appeal misrepresenting and by concealing the facts only in order to unjustly enrich himself. In view of the facts as stated above the appeal deserves to be dismissed with cost. Analysis / Appraisal: 24. Heard the Learned Counsel appeared for the respective parties, perused the pleadings, documents filed in support of their case. After analysing the pleadings, the issue that felt for consideration is whether the Appellant has made out any prima facie case seeking the reliefs as prayed in the Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allow any settlement with the Promoters and the creditors. This Tribunal however, directed the Liquidator to proceed with in terms of the decision made in Y. Shivram Prasad Vs. S. Dhanapal Ors. (NCLAT judgment). 28. In view of the judgment of this Tribunal, the Respondent submitted a scheme of compromise and arrangement under Section 230 of the Companies Act, 2013 on 01.06.2019 in the light of the judgment in the matter of Y. Shivram Prasad. The liquidator moved an Application MA No. 793/2019 before the Adjudicating Authority seeking leave to convene a meeting of the creditors and shareholders for considering scheme proposed by the Promoters. The Adjudicating Authority allowed the said I.A. on 02.08.2019. The meeting of creditors and shareholders convened and the Promoters proposed a scheme to settle all class of creditors. 29. The scheme proponents filed the scheme of compromise and arrangement under Section 230 of the Companies Act, 2013. Thereafter, the Liquidator filed an application being CA 1026/2019 before the Adjudicating Authority seeking relief that the scheme of compromise or arrangement approved by the equity shareholders and creditors of the company in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) The Promoters paid off fully the debt amounts to the creditors and the rights of creditors have been fully discharged to their satisfaction. (iii) This Tribunal vide order dated 07.03.2019 allowed the Promoters to file the scheme before the Liquidator and the Liquidator to proceed in terms of Y. Shivram Prasad vs. S. Dhanpal and Ors. in CA (AT) (Ins.) No. 224/2018. 33. The Adjudicating Authority has considered all aspects including the scheme submitted by the Respondents. The Adjudicating Authority also relied upon the judgment of the Hon ble Supreme Court in Arcelormittal India Pvt. Ltd. Vs. Satish Kumar Gupta Ors. in Civil Appal No.9402 to 9405 of 2018, the Hon ble Supreme Court interpreted Section 29A(c) as follows: Para 54. The interpretation of Section 29A(c) now becomes clear. Any person who wishes to submit a resolution plan, if he or it does so acting jointly or in concert with other persons, which person or other persons happen to either manage or control or be promoters of a corporate debtor, who is classified as a non-performing asset and whose debts have not been paid off for a period of at least one year before commencement of the corporate insolv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Insolvency) No. 467 of 2019 vide its Judgment saving the right of the Income Tax and also in terms of the Judgment cited by the revenue of the Hon ble Supreme Court in Marshall Sons Co (supra) and in accordance with both the above Judgments the right of the revenue is preserved accordingly. 35. In view of the directions passed by the Adjudicating Authority, the Appellant obtained an affidavit from the Respondents dated 17.01.2020, whereby the Respondents have clearly stated that they were eligible to submit the scheme under Sections 230-232 of the Companies Act, 2013 and did not suffer from any disqualification under Section 29A of the Code. Further, the Adjudicating Authority also directed by the aforesaid order to the Appellant to submit a report before the Adjudicating Authority within a period of one week after application of his mind in relation to the contents of the affidavit and the veracity of the statements made therein. Accordingly, and incompliance of the order of Adjudicating Authority, the Appellant filed his report dated 22.01.2020. The Appellant in its report clearly stated at para 4(iii) as further the Hon ble Tribunal in paragraph 31 of the said order he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson, decided not to press for other observations made in relation to Section 29A of the IBC, 2016. 39. Further, the Adjudicating Authority in its order dated 05.05.2020 at para 12 observed that the Adjudicating Authority cannot review its own order dated 10.01.2020 with respect to the scheme filed before it, since the order to that affect has already been passed on merits as well as on the aspects of law and the Liquidator is not an aggrieved person. Overview: 40. This Tribunal intend to have a glance on the sequence of events and the orders of this Tribunal and the judgment of the Hon ble Supreme Court on this aspect. a) This Tribunal vide its order dated 07.03.2019 clearly held that the promoters have been paid in full. However, observed that on completion of the resolution process the Tribunal did not allow the settlement with the promoters and the creditors. However, the Appellant was directed to proceed with in terms of the decision in Y. Shivram Prasad. b) The Adjudicating Authority vide its order dated 10.01.2020 sanctioned the scheme, however, directed the Appellant to obtain an affidavit from the Respondents and the same shall be filed in the form of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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