TMI Blog2023 (12) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... the account of the Corporate Debtor which amount is claimed to be belonging to OAF. The Adjudicating Authority has returned the finding that no direct investment/deposit from OAF reflects in the books of the Corporate Debtor. In the appeal also, neither any foundation has been laid nor any material has been produced to indicate that the said finding is incorrect. Even though the Appellant has not filed its claim, the Resolution Professional has already pleaded that the Resolution Plan notices the amount to be refunded as per the SEBI s order dated 28.05.2021. The Resolution Plan also contains a clause for discharge of the liability of the SEBI. There shall be no question of extinguishment of the claim of the SEBI pursuant to the order dated 28.05.2021 on completion of the CIRP of the Corporate Debtor. The Resolution Plan envisaged for clearing such liability as per scheme envisaged in the Resolution Plan. Counsel for the Resolution Professional is right in his submission that during currency of moratorium which was imposed by order dated 19.12.2021, no recovery can be affected from the Resolution Professional of the Corporate Debtor as per SEBI s order dated 28.05.2021. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestment Scheme without obtaining the Registration Certificate under Section 12(1B) of the SEBI Act, 1992 and Regulation 3 of the SEBI (Collective Investment Scheme) Regulations, 1999. After certain litigations between the SEBI and the Corporate Debtor final order was passed by SEBI on 28.05.2021 under Section 11 and Section 11B of the SEBI Act, 1992 directing Osian s Connoisseurs of Art Private Limited to refund the balance amount to remaining investors along with the interest @10% p.a. Direction was also issued that Osian s Connoisseurs of Art Private Limited shall not alienate or dispose of or sell any assets except for the purpose of making refund to its investors as directed by the order. Direction under paragraph 16 (a) was to come in effect w.e.f. 01.07.2021, balance was to be refunded within six months from the date of an order. On a Company Petition filed by IDBI Bank against the Osian s Connoisseurs of Art Private Limited , proceedings under Section 7 was initiated by order dated 19.12.2021 passed by the Adjudicating Authority and Respondent No.1- Mr. Girish Siriram Juneja was appointed as Resolution Professional of the Corporate Debtor. On 09.05.2022, SEBI informe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - (Rupees Thirty Crore Eighty Six Lakh Sixty Two Thousand Eight Hundred and Thirty Two only), along with the interest at the rate of 10% per annum on the principal amount collected from the investors, from the date when the amount to such investors first became due and till the date of closure of its scheme, to the Investors of 'Art Fund'; iii. This Hon'ble Tribunal be pleased to pass such other or further orders as this Hon'ble Tribunal may deem fit in the facts and circumstances of the case, in the interest of justice and equity. 2.2. The Resolution Professional filed an Affidavit in reply to IA No.3787 of 2022 to which Rejoinder was also filed. Adjudicating Authority vide order dated 27.07.2023 rejected the IA. Adjudicating Authority held that the Resolution Plan deals only with assets and liabilities of the Corporate Debtor and no direct investment/deposit from OAF reflects in the books of the Corporate Debtor. However, the Resolution Plan deals in a broad manner with the manner of compliance of the order of the SEBI dated 28.05.2021. The Adjudicating Authority further held that the Corporate Debtor is a distinct entity from OAF with segregated assets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Corporate Debtor, Appellant s direction issued on 28.05.2021 shall become impossible to the complied causing great prejudice to the Appellant. 5. Learned Counsel for the Resolution Professional refuting the submissions of the Counsel for the Appellant submits that the assets of the Corporate Debtor and assets of OAF are separate and distinct. It is submitted that the Corporate Debtor was only asset manager of OAF the trust. Monies under the OAF do not form part of the assets of the Corporate Debtor and have not been recorded in the information memorandum prepared under the CIRP of the Corporate Debtor. The Resolution Professional has also got forensic audit conducted which report has been produced substantiating the fact that the Corporate Debtor and OAF are two distinct entities with segregated assets. It is submitted that in the Resolution Plan of the Corporate Debtor, the assets of OAF are not being dealt with. It is submitted that in spite of Appellant writing to the Resolution Professional to send the requisite form for filing the claim, no claim has been filed by the Appellant in the CIRP of the Corporate Debtor. It is submitted that the Resolution Plan contains a clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded, bank account statements indicating refund to the investors and receipt from the investors acknowledging such refunds, within a period of 15 days after the expiry of aforesaid Six months and Nine months period, respectively, as referred in para 16(a) above. These reports shall be forwarded by Osian to The Division Chief, EFD, DRA-3, Securities and Exchange Board of India, SEBI Bhawan, Plot NO. C4 A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai - 400051. c. Osian shall not alienate or dispose of or sell any assets except for the purpose of making refund to its investors, as directed above. d. SEBI, on failure of Osian Capital Art Fund, to effect the refunds as directed in the para 16(a) or to file reports as directed in para 16(b), above, within the period provided thereunder, shall recover such amounts, in accordance with Section 28A of the SEBI Act, 1992. e. Other directions, as contained in paragraph 45(b) and (c) of the SEBI order dated April 15, 2013 passed against the Noticees shall remain intact and be mutatis mutandis enforced against the Noticee subject to the directions given above. f. The direction in para 16(c) above shall cease to operate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SEBI order. As per records on IBBI, you have been appointed as the resolution professional. It is requested that the form required for filing claims may be sent to the undersigned for the purpose of filing claims. Medha Sonparote General Manager, EFD1 Securities and Exchange Board of India 1st Floor, SEBI New premises Plot No.C-7, G Block, Bandra Kurta Complex (BKC), Bandra (E), Mumbai- 400051 Tel: (022) 2644 9312 Email: medhad@sebi.gov.in 9. It is relevant to notice that no claim was filed by the Appellant in the CIRP of the Corporate Debtor. However, Resolution Professional was well aware of the order dated 28.05.2021 passed by the SEBI issuing direction against the Corporate Debtor to refund the amount with interest to investors. The said was shown both in the information memorandum as well as in the Resolution Plan. The Resolution Plan contains a clause which has been noted by the Adjudicating Authority in paragraph (q) which is to the following effect : - Contingent liability (if any), arrived after the approval of Resolution Plan, such liability shall be taken into consideration and the payment will be made with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such audit, it has been observed by the auditor, that no direct investment/deposit from OAF reflects in the books of the Corporate Debtor. A copy of the Information Memorandum dated February 2022 is hereto annexed and marked as 'ANNEXURE R-1' A copy of the said forensic audit is annexed to the captioned Appeal and marked as ANNEXURE Q.' 7. It is further reiterated that the forensic audit produced by the Respondent has substantiated the fact that the Respondent and OAF were two distinct entities with segregated assets, thus the only manner in which the Respondent could assure compliance with the SEBI Order amidst the Insolvency Proceedings would be by notifying the Resolution Applicant of the same vide the resolution plan. I say that the refund amount has been dealt with in the resolution plan in a limited scope in relation to the compliance of the SEBI Order and the liability as an asset manager Relevant portion of the approved resolution plan provides as follows: the contingent liability which may arise on account of Osian's Art Fund shall only be paid out of the proceeds of sale of assets belonging to the said fund 11. The Resolution Professiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall exercise these powers subject to the superintendence, control and direction of the Board of Directors of the Trustee Company (Ref: Pg. 31) III. The duties and obligations of AMC shall include: (i) ensure that the Art Fund is segregated from assets of the AMC and assets of any other funds for which the AMC is responsible. (Ref: Pg. 33) X.A. Osian's Art Fund has not had any transactions with the Sponsor or any of the Sponsor's associates from the date of registration till the date of the Information Memorandum. (Ref.: Pg. 66) (emphasis supplied) A copy of the Information Memorandum circulated to investors relating to Osian's Art Fund Scheme Contemporary 1' is hereto annexed and marked as ANNEXURE R-5 12. The Adjudicating Authority after considering the submissions of the parties has returned a finding in paragraph 6 to the following effect:- 6. As rightly contended by the RP the Resolution Plan deals only with assets and liabilities of the Corporate Debtor and no direct investment/deposit from OAF reflects in the books of the Corporate Debtor. 13. The Adjudicating Authority also while returning the finding observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporate Debtor. The Resolution Professional has directed for forensic audit which report has also been received and has been relied by the Resolution Professional. It is not shown as per the forensic report that the amount of Rs.30,86,62,832/- belonging to OAF lying with the Corporate Debtor or is reflected in the accounts of the Corporate Debtor, no material has been placed either before the Adjudicating Authority or before this Tribunal by the Appellant to show that the said amount is reflected in the books of the account of the Corporate Debtor which amount is claimed to be belonging to OAF. The Adjudicating Authority has returned the finding that no direct investment/deposit from OAF reflects in the books of the Corporate Debtor. In the appeal also, neither any foundation has been laid nor any material has been produced to indicate that the said finding is incorrect. 15. Even though the Appellant has not filed its claim, the Resolution Professional has already pleaded that the Resolution Plan notices the amount to be refunded as per the SEBI s order dated 28.05.2021. The Resolution Plan also contains a clause for discharge of the liability of the SEBI. There shall be no ques ..... X X X X Extracts X X X X X X X X Extracts X X X X
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