TMI Blog2023 (11) TMI 968X X X X Extracts X X X X X X X X Extracts X X X X ..... as RP, it was improper for him to include Mahal Hotel Pvt. Ltd. as Financial Creditor of the Member of the Committee of Creditors. Further, money laundering case having been initiated against Mahal Hotel Pvt. Ltd., the said Hotel cannot be allowed to be Member of Committee of Creditors . It was also observed in paras 11 and 12 that the Adjudicating Authority had failed to notice the aforesaid facts and circumstances and without going into the question of delay in inclusion of Mahal Hotel Pvt. Ltd. as Financial Creditor, has decided the Claim and this Tribunal has set aside the Order dated 04/10/2018, whereby the Adjudicating Authority has directed the RP to revise the Claim submitted by Mahal Hotel Pvt. Ltd.. Therefore, it is crystal clear that the Order of this Tribunal dated 18/11/2019 has set aside the finding of the Adjudicating Authority revising the Claim of the Appellant herein without granting any liberty to once again approach the Adjudicating Authority for adjudication of its Claim. The Hon ble Apex Court in the matter of COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA OTHERS [ 2019 (11) TMI 731 - SUPREME ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, while we hold that there is a dispute as to whether Mahal Hotel Private Limited, comes within the meaning of 'Financial Creditor' or not, we hold that after constitution of the Committee of Creditors, without its permission, the Resolution Professional was not competent to entertain more applications after three months to include one or other person as 'Financial Creditor', further, once a decision was taken by the Committee of Creditors to call for a meeting for removal of Mr. Koteswara Rao Karuchola as an 'Resolution Professional , it was improper for him to include Mahal Hotel Private Limited as 'Financial Creditor' of the Member of the 'Committee of Creditors'. that the Adjudicating Authority has failed to notice the aforesaid facts and circumstances and without going into the question of delay in inclusion of Mahal Hotel Private Limited as 'Financial Creditor', has decided the claim, though a petition was filed by Mahal Hotel Private Limited for the directions in its favour. which remained unchanged also disentitles the applicant the relief sought for in this application. Since attained finality, keeps the subject p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision was taken by the Committee of Creditors' to call for a meeting for removal of Mr. Koteswara Rao Karuchola as an 'Resolution Professional', it was improper for him to include Mahal Hotel Private Limited as Financial Creditor' of the Member of the 'Committee of Creditors'. 4. The Learned Counsel for the Appellant strenuously argued that the NCLAT had observed that there is a dispute as to whether Mahal Hotel Pvt. Ltd. comes within the meaning of Financial Creditor or not and therefore, the question of whether the Appellant being a Financial Creditor or any Creditor was not adjudicated upon and that the Adjudicating Authority has erroneously concluded that the Appellant not being a part of the CoC and therefore, not falling within the ambit of the definition of Financial Creditor, has attained finality. It is submitted that pursuant to the Order of NCLAT dated 18/11/2019, the CoC was reconstituted and the Appellant filed IA No. 1437/2022 interalia seeking declaration of the Appellant as the Financial Creditor, which was dismissed by the Adjudicating Authority on the ground that the finding in the NCLAT Order remained unchallenged and therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in relation to suits in Section 11 of the Code of Civil Procedure; but even where Section 11 does not apply, the principle of res judicata has been applied by courts for the purpose of achieving finality in litigation. The result of this is that the original court as well as any higher court must in any future litigation proceed on the basis that the previous decision was correct. 8. It is also the case of the Respondent that the BTA Agreement did not have the commercial effect of a borrowing and it was intended for the transfer of business division on a slump sale basis as evident from the terms and conditions of the BTA Agreement. There is no commercial effect of a borrowing having time value of money and therefore, does not fall within the definition of Financial Debt. It is also submitted that the Order of IA No. 250/2018 dated 04/10/2018 has merged with the Order of NCLAT in C.A. (AT) (Ins) No. 633/2018 which has since attained finality and therefore, the Appeal is not maintainable. Assessment : 9. It is the main case of the Appellant that in C.A. (AT) (Ins) No. 633/2018 filed by ARCIL against the Order in IA No. 250/2018, NCLAT has not decided as to whether th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l acting under IBC. .. 11. At the cost of repetition, Paras 9 to 12 of C.A. (AT) (Ins) No. 633/2018 are reproduced as hereunder: 9. From the discussions as made above, while we hold that there is a dispute as to whether Mahal Hotel Private Limited comes within the meaning of Financial Creditor' or not, we hold that after constitution of the 'Committee of Creditors', without its permission, the Resolution Professional' was not competent to entertain more applications after three months to include one or other person as Financial Creditor'. Further, once a decision was taken by the Committee of Creditors' to call for a meeting for removal of Mr. Koteswara Rao Karuchola as an 'Resolution Professional', it was improper for him to include Mahal Hotel Private Limited as Financial Creditor' of the Member of the 'Committee of Creditors'. 10. Further, money laundering case having been initiated against Mahal Hotel Private Limited, the said Hotel cannot be allowed to be the Member of the 'Committee of Creditors'. 11. The Adjudicating Authority has failed to notice the aforesaid facts and circumstances and without g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Financial Creditor within the meaning of Section 5 (7) of the Code, the Appellant herein ought to have preferred an Appeal under Section 62 of the Code. It is not in dispute that the Appellant did not challenge these findings by way of an Appeal. Therefore, we find force in the contention of the Learned Counsel for the Respondent that as the Order dated 18/11/2019 has attained finality and the reliefs sought for by the Appellant namely, inclusion of its Claim as a Financial Creditor and as a Member of the CoC, cannot be reargued at this belated stage. It is also brought to the notice of this Bench by that the Appeal challenging the rejection of the Resolution Plan by the Adjudicating Authority vide Order dated 09/06/2023 in C.A. (AT) (Ins) No. 163 183/2023 has been allowed by this Tribunal on 06/10/2023 and the Plan has since been implemented. The Hon ble Supreme Court in a catena of Judgments has held that the approval by the Adjudicating Authority renders the Resolution Plan binding on all the Stakeholders. The Hon ble Apex Court in the matter of Essar Steel India Ltd. Vs. Sathish Kumar Gupta reported in [(2020) 8 SCC 531] has observed that the clean slate theory is to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
