TMI Blog2023 (2) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... Stamp Duty Authorities, the admission of claims by RP of the Financial Creditors need to be rejected. The second ground of attack made by learned Counsel for the Appellant that claim of the Financial Creditors is barred by time - HELD THAT:- Corporate Debtor was declared NPA on 30.09.1997 and the Application under Section 7 was filed on 11.01.2018. The limitation for filing an Application under Section 7 is three years under Article 137 of the Limitation Act. The learned Counsel for the parties have raised submission in regard to Rajasthan Relief Undertakings (Special Provisions) Act, 1961. Whether the Financial Creditors can take benefit of limitation as per the provisions of Section 4(1)(b) read with 4(2) of the 1961 Act, or the said benefit is not available to the Financial Creditor? - HELD THAT:- The Corporate Debtor was notified as relief undertaking from 03.10.1998 to 07.12.2016. The IBC came into force from 01.12.2016. The present Application has been filed on 11.01.2018. The period of limitation of three years for filing an Application under Section 7 commenced from the date Corporate Debtor was declared as Non-Performing Asset, i.e. 30.09.1997 - the period of lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erjee, Ms. Shruti Pandey, Advocates for R-2. Mr. Abhirup Dasgupta, Mr. Ishaan Duggal, Mr. Pathik Choudhury, Advocates for R-3. For the Appellant: Dr. Abhishek Manu Singhvi, Sr. Advocate Mr. Prakul Khurana, Mr. Ankit Sareen, Mr. Yash Tandon, Mr. Hemant Kothari, Mr. Gourav, Advocates For the Respondents: Mr. Abhijeet Sinha, Mr. Ashu Kansal, Ms. Heena Kochar, Advocates for R-1. Mr. Ramji Srinivasan, Sr. Advocate, Mr. Gaurav Singh, Ms. Varsha Banerjee, Ms. Shruti Pandey, Advocates for R-2. Mr. Abhirup Dasgupta, Mr. Ishaan Duggal, Mr. Pathik Choudhury, Advocates for R-3. For the Appellant : Dr. Abhishek Manu Singhvi, Sr. Advocate Mr. Prakul Khurana, Mr. Ankit Sareen, Mr. Yash Tandon, Mr. Hemant Kothari, Mr. Gourav, Advocates For the Respondent : Mr. Abhijeet Sinha, Mr. Ashu Kansal, Ms. Heena Kochar, Advocates for R-1. JUDGMENT ASHOK BHUSHAN , J. These three Appeal(s) have been filed by the State of Rajasthan through Officer-in-Charge Panchu Ram Sharma, Joint Director, Industries, challenging order dated 24.06.2022 passed by National Company Law Tribunal, Jaipur Bench in IA No.327/JPR/2019 in Company Appeal (AT) (Insolvency) No. 733 of 2022. Company A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board for Industrial and Financial Reconstruction ( BIFR ) for its revival and the same was registered as Case No.03/1999. On 26.09.2002, the BIFR after giving opportunity to Government of Rajasthan for submitting a revival proposal for the Corporate Debtor, confirmed its opinion to wind up of the Corporate Debtor under Section 20(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 ( SICA ) and forwarded its opinion to the High Court of Rajasthan and Jaipur. An Appeal was filed by the Coordination Committee of the Workers Union against BIFR order dated 26.09.2022 before the Appellate Authority for Industrial and Financial Reconstruction ( AAIFR ), which was dismissed on 11.05.2005. (vi) On the opinion forwarded by BIFR, Company Petition No.19 of 2009 was registered before the Rajasthan High Court. In Company Petition No.19 of 2009 and other connected matters, various writ petitions were filed by the Labour Union. The High Court vide interim order dated 26.04.2018 stayed the implementation of the order passed by the Adjudicating Authority dated 13.04.2018. The High Court passed a final judgment on 01.06.2018 in which it refused to transfer the winding up proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imited while making a reference to the collector mandated under the law. (ix) Notice was issued to Alchemist by the State of Rajasthan under Section 37 read with Section 51 and 53 of the Rajasthan Stamps Act directing the Alchemist to pay requisite stamps duty on the documents which were executed as Asset Credit Agreement and other ancillary documents as mentioned in the notice. Writ Petition No.7747/2021 and 7748/2021 was filed by the Alchemist in the Rajasthan High Court, challenging the notice in which initially an interim order was passed, but subsequently vide judgment dated 01.09.2021, the Writ Petitions were dismissed. In D.B. Special Appeal Writ No.1032 of 2021, the Division Bench of the High Court noted that Stamp Duty Authority had passed final orders in pursuance to show cause notice. The Division bench passed an interim order preventing the Respondent State of Rajasthan and the Stamp Duty Authority from recovering the stamp duties in relation to the show cause notice dated 27.04.2021. (x) An IA No.328/JPR/2019 was filed by the State of Rajasthan, where following prayers were made: Therefore in the light of the above stated factual and legal position, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 98, where a demand of around Rs.629 crores has been raised against the Corporate Debtor. All these facts were placed before the Adjudicating Authority, but Adjudicating Authority held that existence of debt can be proved by different documents and Adjudicating Authority do not wish to impinge in the domain of the Collector or the High Court. The Adjudicating Authority has not analyzed any such documents, which proves evidence of debt. It is submitted that issue of under-stamped was not before the Hon ble Supreme Court, when it delivered its judgment on 12.12.2018. 5. Dr. Singhvi further submits that the claims filed by Alchemist and ARCIL were barred by time. It is submitted that date of NPA of Corporate Debtor was 30.09.1997 and Corporate Debtor was notified as a relief undertaking from 03.10.1998 to 07.12.2016. The Corporate Debtor was de-notified as relief undertaking from 07.12.2016. It is submitted that reliance of Alchemist and ARCIL on provisions of Section 4(1) (b) of the 1961 Act is misplaced. It is submitted that the term because and for such suit or proceeding has been used in relation to only those remedies which are contemporaneous at that point of time. The rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Ramji Srinivasan, learned Senior Counsel appearing for Alchemist, refuting the submissions of learned Counsel for the Appellant submits that debt of Alchemist is admitted debt and not denied even by the Appellant. The impugned order clearly records the factum of disbursal of the debt and the debt being due and payable. The submission of the Appellant as regards inadmissibility of the documents annexed with the claim are liable to be rejected. It is submitted that all the documents forming part of the Alchemist claim has been duly considered at the time of passing of the admission order and said order having been upheld by the Hon ble Supreme Court, the documents, which have been admitted in the proceeding, cannot be questioned on account of being insufficiently stamped. Reliance has been placed on Section 40 of Rajasthan Stamp Act. It is submitted that RP exercise limited jurisdiction at the time of admission of claim and the duty of RP is to collate and verify the claims only. Under Regulation 8 of the CIRP Regulations, Financial Creditor can prove its financial debt on the basis of other relevant documents. The documents issued by the State Government including the Informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riding effect of Section 238 of IBC, initiation of DRT and SARFAESI proceedings is no bar in filing Section 7 Application, the Alchemist filed its claim on 11.01.2018 in response to public notification issued by IRP. The Appellant in its Information Memorandum dated 14.07.2018 clearly stated that IDBI as its Financial Creditor, which also contains an admission that debt has been assigned to Alchemist, which amounts to clear admission of debt by the State also. 7. The learned Counsel appearing for ARCIL has adopted the arguments made by the learned Senior Counsel Shri Ramji Srinivasan. It is further submitted that against Respondent No.3, although a notice was issued, pointing out deficiencies in the documents, but no proceedings were undertaken under the Rajasthan Stamp Act against the ARCIL. 8. The learned Counsel for the RP also supported the impugned order and submits that claims of Alchemist and ARCIL were duly verified and accepted by the RP in accordance with law. There were various materials on record including the admission of the Corporate Debtor, which proved the existence of debt and default . Section 7 Application having been admitted and which admission order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 23.03.1995 executed between the Corporate Debtor and IDBI upto the maximum sum of Rs.474 lakh for purchase of assets from time to time under the Credit Scheme of IDBI. Copy of loan agreement dated 23.03.1995 executed between the corporate Debtor and IDBI for an amount of Rs.200 lakhs towards working Capital Facility. Copy of the Deed of Hypothecation dated 23.03.1995 executed between the Corporate Debtor and IDBI for availing the credit facilities amounting to Rs.200 lakh. Copy of the Joint Mortgage deed dated 07.04.1995 executed by Shri Gopal Singh, Director, and the Corporate Debtor (JMEL) in respect of deposit of title deeds of immovable and hypothecation of movables with reference to credit facilities availed from various Financial Creditors. Copy of the Loan agreement dated 21.03.1996 executed between the corporate Debtor and IDBI for availing the credit facility for an amount of Rs.150 lakh for purchase of equipments. Copy of the Deed of Hypothecation dated 21.03.1996 executed between the Corporate Debtor and IDBI for availing the credit facilities amounting to Rs.150 lakh. Copy of the Joint mortgage deed dated 29.04.1996 execut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cant also relied on the Certificates of Registration for modification of charge under Section 132 read with Section 135 of the Companies Act, 1956 issued by Registrar of Companies, Rajasthan modifying the charge created by IDBI in favour of M/s Dhir Dhir Asset Reconstruction and Securitisation Company Ltd. (now Alchemist). Certificate of CERSAI with respect to assets of the Corporate Debtor, wherein the security held by Alchemist was also filed. Further, audited financial statements of the Corporate Debtor for the financial year ending on 31.03.2013 was also relied. In this respect, paragraph 22 of the order dated 13.04.2018 is as follows: 22. The audited financial statement of the respondent company for the financial year ending 31 March 2013 clearly reveals that a total amount of Rs.391,72,98,134/- is due and payable to all the financial creditors including IDBI and SBBJ. The audited financial statement for the year ending 31.03.2013 also reveals that the outstanding dues of IDBI Bank and SBBJ have been assigned to the applicant AARCL. There is thus clear admission that consequent to the assignment of the outstanding dues of IDBI Bank and SBBJ, the applicant AARCL comes wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied on Notification dated 08.03.2017 and 10/11.04/2018, by which exemption was granted from the stamp duty in assignment agreement entered in favour of any Asset Reconstruction Companies from payment of Stamp Duty. The said Notification at best apply to assignments, which were made subsequent to the said Notification. 16. The learned Counsel for the Appellant has placed much emphasis on the orders passed by Deputy Inspector General, Registration Stamp (Tax Evasion) dated 17.09.2021, 18.11.2021 and 26.11.2021 (two orders), by which demand of an amount of Rs.629 crores have been raised. As noticed above, the said order is under scrutiny by the High Court. More so, the RP has taken into consideration various other documents, which were filed along with Form-C, also in addition to the assignments Deeds. The proceedings under the Rajasthan Stamp Act are separate and independent proceedings to the proceedings under the IBC initiated by the Financial Creditors under Section 7 of the IBC. The admission of claim by the RP, took place much before the proceedings initiated under the Stamp Act and which were based on other relevant materials as noted above cannot be faulted on the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , if so directed by the State Government, be applied with such modifications (which do not however affect the policy of the said laws) as may be specified in the notification; and (ii) all or any of the agreements, settlements, awards or standing orders made under any of the laws mentioned in the Schedule to this Act which may be applicable to the undertaking immediately before it was acquired or taken over by the State Government or before the issue of the notified order in respect thereof under section 18-A of the Industries (Development and Regulation) Act, 1951 (Central Act 65 of 1951), or before any loan, guarantee, or other financial assistance was provided to it, by the State Government, shall be suspended in operation, or shall, if so directed by the State Government, be applied with such modifications as may be specified in the notification; and (b) no suit or other legal proceeding shall be instituted or commenced or if pending, shall be proceeded with, against any industrial undertaking during the period in which it remains a relief undertaking. Explanation.- Legal proceeding means any proceeding under any law before any court, tribunal, officer, authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly applicable by Section 238A. We in the present case are to determine the period of limitation for filing Section 7 Application, for which the provisions of Limitation Act have to be looked into. Since the limitation as per Article 137 for filing Section 7 Application is three years, we, thus, have to look into the provisions of Limitation Act and Section 4, sub-section (2) of the 1961 Act, which provide for exclusion of period of limitation, which has direct concern with the computation of the limitation as per Limitation Act and is relevant and cannot be ignored. The submission of learned Counsel for the Appellant that since the IBC come into force on 01.12.2016, Section 4(2) has to be read only with the remedies which are contemporaneous, cannot be accepted. As noted above, period of limitation for filing an Application commenced on 30.09.1997, which is much before the enforcement of IBC. It is well settled that IBC does not give any fresh period of limitation for filing any Application and no fresh lease of life can be given to the State or dead claim by the enforcement of IBC. But when the Applicant has still balance period of limitation for filing an Application under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been removed only in accordance with the procedure prescribed under Section 27 of the I B Code under a resolution of the CoC. This Tribunal considered the submission of the parties and upheld the order of removal of Resolution Professional noticing the peculiar facts and circumstances of the said case. This Tribunal held that in the said case request was made by the Financial Creditor to the Resolution Professional to convene the meeting of CoC with agenda of removal of the Resolution Professional but despite the request from the Financial Creditor, the Resolution Professional sat tight over the matter and did not convene the meeting. In the peculiar circumstances applications were filed by the Financial Creditor praying for removal of the Resolution Professional. In Para 12 of the judgment following has been observed: 12. Besides hearing the learned counsel for the parties we have examined the material available on record particularly the impugned order. It is reflected from the impugned order that the CIRP was initiated long back in 2019, however, for more than one and half years, no step was taken by the Appellant/RP for revival of the CD or even for generating funds. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below: 16. Power to appoint to include power to suspend or dismiss.-Where, by any Central Act or Regulation, a power to make any appointment is conferred, then, unless a different intention appears, the authority having for the time being power to make the appointment shall also have power to suspend or dismiss any person appointed whether by itself or any other authority in exercise of that power. The Hon ble Supreme Court in M/s. Heckett Engineering Co. Vs. Their Workmen reported in (1977) 4 SCC 377 has held that the Appointing Authority can also dismiss the appointee. 23. The judgment of this Tribunal in Srigopal Choudary s case was in peculiar facts and circumstances where the Resolution Professional did not convene the meeting for consideration of agenda for removal of Resolution Professional, hence, application had to be filed before the Adjudicating Authority for removal of Resolution Professional. In the above case, the Adjudicating Authority exercised its inherent power under Rule 11 for passing order. The facts and circumstances under which the order of this Tribunal was passed in Srigopal Choudary s case is entirely different from the facts and circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
