9911796707
TMI Blog2022 (9) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... grieved by the order has come up in this Appeal. The brief facts of the case necessary to be noticed for deciding this Appeal are: (i) An Application under Section 7 filed by the Small Industries Development Bank of India against the Corporate Debtor was admitted vide order dated 10.10.2019 passed by the Adjudicating Authority. The Respondent No.1 was appointed as Resolution Professional in the second meeting of the Committee of Creditors (CoC). (ii) The 5th meeting of the Committee of Creditors was held on 24.02.2020. Item No. 4 in the meeting was to take note of provisions of liquidation of Corporate Debtor - 'M/s Radhey Sham Tandon Manufacturing Pvt. Ltd.', on which it was agreed by the members of the CoC that since the operation of Corporate Debtor is not being carried on for more than one year, the Corporate Debtor be liquidated. The Resolution Professional was authorised to do all such things as were required to liquidate the Corporate Debtor. (iii) In the 6th CoC meeting held on 23.07.2020 the present Appellant was present. In the 6th CoC meeting one of the Agenda Item No. 12 was to take approval of the CoC to file an application for liquidation of Corporate Debtor. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order dated 26.08.2021, this Appeal has been filed by the Suspended Director of the Corporate Debtor. 2. Learned counsel for the Appellant challenging the impugned order submits that the Corporate Debtor being a Micro, Small and Medium Enterprise was fully entitled to submit the Resolution Plan, which was also done with the permission of the CoC. The Committee of Creditors did not consider the Resolution Plan submitted by the Appellant on the ground that no plans were ever invited which reason has no substance. The Resolution Professional had formed an erroneous opinion that the Corporate Debtor is not an MSME since no Registration Certificate was filed whereas the Entrepreneur Registration Number under the MSME Act duly containing due acknowledgement was filed which has been incorrectly disregarded. The Committee of Creditors in its 5th meeting decided to send the Corporate Debtor for liquidation without even obtaining any valuation report and before preparation of any Information Memorandum. It is submitted that the Corporate Debtor who was MSME is entitled to revive itself which is the object and purpose of the I&B Code. It is submitted that the decision of the Resolution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a person who intends to establish a micro, small or medium enterprise to file the memorandum of micro, small or, as the case may be, of medium enterprise with such authority as may be specified by the State Government under sub-section (4) or the Central Governmentunder sub-section (3). Section 8 Sub-section (1) and (2) are as follows:- "8. Memorandum of micro, small and medium enterprises.-(1) Any person who intends to establish,- (a) a micro or small enterprise, may, at his discretion; or (b) a medium enterprise engaged in providing or rendering of services may, at his discretion; or (c) a medium enterprise engaged in the manufacture or production of goods pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951 (65 of 1951), shall file the memorandum of micro, small or, as the case may be, of medium enterprise with such authority as may be specified by the State Government under sub-section (4) or the Central Government under sub-section (3): Provided that any person who, before the commencement of this Act, established- (a) a small scale industry and obtained a registration certificate, may, at his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Registered Small Industry. 8. The Liquidator in its reply has referred to the Notification dated 16.01.2009 issued under Sub-section (1) of Section 7 and has relied on Clause 13 as inserted in Schedule II by Notification dated 16.01.2009. Clause 13 is as follows: "13. The Acknowledged Entrepreneurs' Memorandum shall be liable to be cancelled in case the unit is found closed for more than 6 months or furnished wrong information in the Entrepreneurs' Memorandum filed or did not follow the instructions at serial number 10 of this Schedule (to be initiated based on any complaint in writing followed by an enquiry under an official not below the authority notified for accepting the Entrepreneurs' Memorandum under the provisions of sub-sections (3) and (4) of section 8 of the said Act." 9. The Clause 13 which has been referred by the Liquidator empowers cancellation of Acknowledged Entrepreneurs' Memorandum in case unit is found to be closed for more than six months. The present is not a case where any proceedings for cancellation of Acknowledged Entrepreneurs' Memorandum has been undertaken nor there is any pleading or material that Acknowledged Entrepreneurs' Memorandum which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised the Appellant to file a Resolution Plan: "Mr. Sanjeev Bindal, RP,informed the COC that he had received a brief Resolution Plan from Mr. Nikhil Tandon, Suspended Director. However, RP had advised Mr. Tandon that the Resolution Plan could not be considered by the COC because same was not in accordance with Section 30 of the IBC 2016. Mr. Nikhil Tandon, who was present in the Sixth meeting, intimated that he was not apprised of the fourth meeting nor he was given the minutes of that meeting despite of his repeated requests. He had a right to be heard as an MSME and make an application for the Resolution Plan. He promised to submit the Resolution Plan in accordance with the Law. Then, COC and RP advised him to submit the Resolution Plan by August 14, 2020 beyond which COC would not consider any Resolution Plan submitted by Mr. Nikhil Tandon, Suspended Director of CD." 14. It is relevant to notice that the above permission was granted to the Appellant to file plan in 6th CoC meeting held on 23.07.2020 subsequent to the 5th CoC meeting held on 24.02.2020 when CoC had decided to liquidate. The above permission granted by the CoC itself indicate that the Appellant was treated to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a material irregularity which has been committed in the Insolvency Resolution Process. 17. The decision of the CoC taken in the 5th CoC meeting to liquidate the Corporate Debtor also cannot be approved due to more than one reason. Firstly, CoC when in the next CoC meeting permitted the Appellant to file Resolution Plan, the decision to liquidate the Corporate Debtor itself was not proceeded with any further. The minutes of the 6th, 7th and 8th meeting of CoC, where plan was permitted to be filed for discussion is clearly in derogation with the earlier decision of the CoC to liquidate the Corporate Debtor which indicate that CoC itself did not adhere to its earlier decision of liquidation. Hence, the decision taken in the 5th CoC meeting to liquidate the CoC cannot be held to be sacrosanct. 18. The Liquidator tried to support the decision of the CoC in the name of commercial wisdom of the CoC and has relied on judgments of Hon'ble Supreme Court in "K. Shashidhar vs. Indian Overseas Bank & Ors., (2019) 12 SCC 150"; Committee of Creditors of Essar Steel India Ltd. vs. Satish Kumar Gupta & Ors., (2020) 8SC 53" and "Kalpraj Dharamshi & Anr. vs. Kotak Investment Advisors Ltd. & Anr., 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In result, while allowing the appeal we issue following directions: I. An extension of period of 90 days is granted to the Resolution Professional and the CoC to take steps to prepare Information Memorandum and issuance of Form G and consideration of Resolution Plan, if any, and take appropriate decision regarding resolution in the CIRP process. II. The Appellant may also in pursuance of issuance of Form G submit its Resolution Plan which also need to be considered by the CoC alongwith other plans, if any. 22. We make it clear that we are not expressing any opinion on merits of the Resolution Plan which was earlier submitted by the Appellant or which may be submitted consequent to this order. It is for the CoC to consider the Resolution Plan of the Appellant alongwith other Resolution Plans in accordance with law. The Resolution Professional and the CoC shall endeavour to complete the entire process, as directed above, within 90 days from today. 23. For any further steps in CIRP, it shall be open for the Resolution Professional and CoC to file appropriate application before the Adjudicating Authority, which may be considered in accordance with law. 24. Parties shall bear t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
