TMI Blog2022 (5) TMI 1448X X X X Extracts X X X X X X X X Extracts X X X X ..... ara 14 into two different categories; essential and non-essential - The expenses relating to the valuation are disallowed because the Directors have admittedly not handed over the records and assets. Similarly, the payment to advocate for a PUFE transaction for application under preparation is disallowed because, in the absence of records, it is difficult to justify any payment for the preparation of such an application. The main petition filed under Section 9 of the IBC, 2016 is ordered to be dismissed as withdrawn and the Corporate Debtor is released from all the rigors of the IBC and Regulations made thereunder subject to the payment of Rs. 8,36,001/- towards reimbursement of the expenses incurred by the IRP. Moratorium under Section 14 of the Code comes to an end. Application allowed. - IA Nos. 510/2021, 527/2021, 591/2021 and 605/2021 in CP (IB) No. 352/Chd/CHD/2018 - - - Dated:- 30-5-2022 - Harnam Singh Thakur, Member (J) and Subrata Kumar Dash, Member (T) For the Applicant : Mr. Abhishek Anand, Advocate, Mr. Viren Sharma, Advocate, Mr. Vishav Bharti Gupta, Advocate, Mrs. Munisha Gandhi, Senior Advocate, Mr. Vaibhav Sharma, Advocate For the Interim Reso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of Corporate Affairs site. In the meanwhile, on 12.10.2021, a settlement has been arrived with the Operational Creditor at ₹ 80 Lakhs and the amount was paid by the Suspended Managing Director of Corporate Debtor. The petitioner-operational creditor has informed this fact to the Interim Resolution Professional with the copies of Form FA and Declaration on the fees estimate provided by Interim Resolution Professional to them. The same is attached as Annexure-4 of the application. 4. In connection with this IA, submissions have been made in Diary No. 01290/01 dated 28.10.2021 through Sh. Jagdeep Singh, Senior Manager on behalf of Punjab National Bank (erstwhile Oriental Bank of Commerce) who is the Financial Creditor of the Corporate Debtor. It is stated that Interim Resolution Professional took the necessary steps and published Form A in the newspaper dated 09.10.2021. Apart from the present Financial Creditor, Corporate Debtor also owns debt to two other financial institutes namely, State Bank of India and IDBI Bank. The present financial creditor-PNB has filed CP (IB) No. 137/Chd/CHD/2019 under Section 7 of the IBC, 2016 seeking initiation of CIRP against the Corporate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ency) No. 382 of 2021, 383 of 2021 and 384 of 2021 dated 17.08.2021. ix) The NCLT, Chandigarh Bench in Oriental Bank of Commerce Vs. Cheema Spintex Ltd. in CP (IB) No. 137/Chd/CHD/2019 dated 20.10.2021. 6. In the composite written submission filed in IA No. 510/2021 and 527/2021 by Diary No. 01307/7 dated 05.04.2022 which is taken up for reference as the issues are interlinked. It has been stated that the mandate of Regulation 30A of the IBBI (Insolvency and Bankruptcy Resolution Process for Corporate Persons) Regulations, 2016 is very clear, and the provisions applicable in the present case are as under:- 30 A. Withdrawal of application. (1) An application for withdrawal under section 12A may be made to the Adjudicating Authority- (a) before the constitution of the committee, by the applicant through the interim resolution professional; ............. (2) The application under sub-regulation (1) shall be made in Form FA of the Schedule accompanied by a bank guarantee-(a) towards estimated expenses incurred on or by the interim resolution professional for purposes of regulation 33, till the date of filing of the application under clause (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the withdrawal on account of the settlement arrived at between the Corporate Debtor and Operational Creditor. 9. We have heard the learned counsels for the applicant and for the Punjab National Bank and perused the records carefully. 10. The issue that before us for consideration in the present application is whether withdrawal of CIRP on account of settlement arrived at between the corporate debtor and operational creditor under Section 12A of the IBC, 2016 is permissible in a case where multiple applications are filed by various other creditors (objectors) to the withdrawal of the CIRP and allowability of the withdrawal of application bearing CP (IB) No. 352/Chd/CHD/2018 and that of the allowance and expenses incurred in the CIRP proceedings by the Interim Resolution Professional for payment. 11. For a better understanding of the issues, the timelines in the present are reiterate as under:- DATES PARTICULARS 06.10.2021 CIRP commenced. 18.10.2021 IA 510/2021 was filed by the IRP under Section 12A of the IBC read with Regulation 30A Insolvency and Bankruptcy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 162269 Fees ratified by CoC with 100% voting share in the 2nd, 3rd, 4th, 5th, 6th CoC meetings. 5. Vishav Bharti Gupta Advocate 50000 Fees ratified by the CoC with 100% voting share in the 2nd, 3rd, 4th CoC meetings. 6. Puneet Gupta Advocate 84000 Applications filed, expense incurred. Ratified with 88.96% voting share in the 6th CoC meeting held on 28.03.2022. 7. PVRN Company (CA) Transaction Auditor on CIRP 106200 Exercise completed. Fees Ratified by CoC with 100% voting share in 2nd CoC. 8. Hyoka Valuers Pvt. Ltd. Registered Valuers (P M, L B) 75000 Valuation exercise for L B assets completed and report handed over to the RP. P M work pending as directors not cooperating CoC has ratified the fees with 100% share in the 2nd CoC. 9. R K Arora Registered Valuer (L B) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has himself filed IA No. 510/2021 only after 12 days of commencement of the CIRP but has chosen to continue with normal functions under CIRP without pursuing the IA No. 510/2021 with this Adjudicating Authority. Even if it may be technically correct, it does not sync with the spirit of the Code. It is also noticed that the Directors have not handed over the records and assets to the IRP subsequent to their settlement with the Operational Creditor. This Bench, therefore, proceeds to categorize the activities for which expenses have been claimed as mentioned in Para 14 into two different categories; essential and non-essential. We are of the view that activities mentioned in Sr. No. 1 to 7 of the afore-mentioned table in Para 14, consisting of expenses on account of e-voting agency, security services, publishing house, payments to advocates and transaction auditor as essential and allow the expenses incurred on those activities. The expenses relating to the valuation are disallowed because the Directors have admittedly not handed over the records and assets. Similarly, the payment to advocate for a PUFE transaction for application under preparation is disallowed because, in the abse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for withdrawal and cessation of CIRP proceedings against the corporate debtor i.e. M/s. Cheema Spintex Ltd. under Section 60(5) of the Code read with Rule 11 of the NCLT Rules, 2016, has already been allowed. Hence the present IA No. 527/2021 is rendered infructuous and is disposed of accordingly. IA No. 591/2021 The present IA No. 591/2021 has been filed by Mr. Hardyal Cheema (Managing Director on Suspended Board of Director) of the Corporate Debtor i.e. M/s. Cheema Spintex Limited under Section 60(5) of the IBC, 2016 read with Rule 11 of the NCLT Rules, 2016. 2. In the present application, the applicant is seeking stay the operation of order dated 06.10.2021 passed by this Adjudicating Authority till the order is pronounced as reserved on 28.10.2021. 3. In view of the order passed in IA No. 510/2021, the present application IA No. 591/2021 is rendered infructuous and is disposed of accordingly. IA No. 605/2021 The present application has been filed by Mr. Alok Kaushik, Interim Resolution Professional of M/s. Cheema Spintex Limited (Corporate Debtor) under Regulation 30 of the (Insolvency Bankruptcy Resolution Process for Corporate Persons) Regulations, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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