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TMI Blog2022 (1) TMI 1371X X X X Extracts X X X X X X X X Extracts X X X X ..... licant submitted its expression of interest. Subsequently, the RP issued information memorandum, evaluation matrix and a request for resolution plan. After the request, the Applicant filed resolution plan dated 04.08.2020. 3. The CoC members did not consider the resolution plan on the ground that the applicant is ineligible to file resolution plan u/s. 29A of the Code as Union Bank of India has classified the account as fraud and the same was reported to Reserve Bank India. Hence, the present application is filed challenging the rejection of resolution plan. 4. The Applicant also contended that the resolution plan complies of various requirement u/s. 30 (2) of the Code. Brief background of Resolution Applicant: 5. LB group came into existence in the year 1955 under parent company Laxmidas Brothers. They were into the business of Plywood trading, Edible Oil trading, Agro commodity trading etc. The Corporate Debtor was classified as MSME on 14.05.2008. 6. The applicant further pointed out that Laxmidas Brothers group had relations with Union Bank of India since 1969. Considering the long standing relationship with the Corporate Debtor, Union Bank of India would not have continu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 03.10.2020 and 11.11.2020 and claimed that there were no discussions whatsoever relating to the ineligibility of the Resolution Applicant. 12. The Applicant claimed that the Resolution Plan was arbitrarily rejected with malafide intentions of liquidating the Corporate Debtor. The conduct of the Respondent is completely unconscionable and against the code. 13. The alleged action by Union Bank of India vide show cause notice dated 13.11.2019 is absolutely frivolous, vague and baseless. The show cause notice issued is in blatant disregard to the guidelines provided in the RBI circular for wilful defaulters. The applicant further claimed to have submitted reply to Union Bank of India denying the allegations pertaining to show cause notice and asked to withdraw the claim. 14. On 24.12.2020, Mr. Shyamal Panchamatia attended the meeting and provided substantial reason on which the account cannot be classified as fraud. The applicant also pointed out that they have filed WP No. 2248 of 2020 in September 2020 dated 13.11.2020 before Bombay High Court, Nagpur Bench. On 23.09.2020, an order was passed by the Bombay High Court observing that the hearing should be conducted by Union Bank o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Application to be provided for; and (g) For such further and other reliefs as this Hon'ble Tribunal may deem fit." Reply of Respondent: 19. The Respondent stated that Union Bank of India having 92.63% voting share and the said Bank has issued show cause notice way back in the year 2019 vide notice dated 13.11.2019 to the Corporate Debtor and its guarantor to declare them as wilful defaulter. Therefore, the CoC in its 7th meeting held on 03.10.2020 did not consider the Resolution plan on the ground that the Corporate Debtor account has been classified as fraud and wilful defaulter. 20. The Applicant also submitted that they have filed an Interlocutory Application No. 1582 of 2921 alleging the fraud and the same is pending for consideration. Further the application has been filed based on two contradictory transaction audit reports and there is prima facie possibility that fraud has been played. 21. The Responded also pointed out that Union Bank of India have initiated separate Criminal proceedings against the promoters and therefore, there is no doubt about their ineligibility. The Respondent also pointed out that it is evident from Minutes of the Meeting that CoC was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of such classification till the date of commencement of the corporate insolvency resolution process of the corporate debtor: Provided that the person shall be eligible to submit a resolution plan if such person makes payment of all overdue amounts with interest thereon and charges relating to nonperforming asset accounts before submission of resolution plan: [Provided further that nothing in this clause shall apply to a resolution applicant where such applicant is a financial entity and is not a related party to the corporate debtor. (d) has been convicted for any offence punishable with imprisonment - (i) for two years or more under any Act specified under the Twelfth Schedule; or (ii) for seven years or more under any law for the time being in force: Provided that this clause shall not apply to a person after the expiry of a period of two years from the date of his release from imprisonment: Provided further that this clause shall not apply in relation to a connected person referred to in clause(iii) of Explanation I]; (e) is disqualified to act as a director under the Companies Act, 2013; [Provided that this clause shall not apply in relation to a c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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