TMI Blog2024 (2) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... ution or Liquidation Proceedings of the Corporate Debtor, or Corporate Person under this Code - It cannot be disputed that the Company was long out of the Insolvency and CIRP of the Company stood completed upon passing of the Plan Approval Order. Suffice it for this Tribunal to point out that the Approved Resolution Plan stood implemented as on date. This Tribunal in a crystalline manner points out that all such claims which were not a part of the Resolution Plan stood extinguished, on the date of Approval of Resolution Plan and further no individual, is permitted to initiate or continue any proceedings , in regard to a claim , which was not part of the Resolution Plan . Appeal dismissed. - ( Justice M. Venugopal ) Member ( Judicial ) And ( Dr. Alok Srivastava ) Member ( Technical ) For the Appellant : Mr. Vijay Purohit , Ms Nikita Bangera , Mr Faizan Mithaiwala , Advocates For the Respondent : Mr. Sunil Fernandes , Mr. Sagar Dhawan , Mr Vijayant Paliwal, Ms Charu Bansal , Ms Mohana Nijhawan , Ms Mehak Nayak , Ms Rashi Sharma , Ms Diksha Dadu , Advocates for R1. Mr Dhruv Dewan , Mr. Y. Sharma, Advocates JUDGEMENT JUSTICE M. VENUGOPAL , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvalid one in the eye of law because of the fact that the said order is a non-speaking one and the Tribunal while dismissing the application had not applied its judicial mind, which has resulted in serious miscarriage of justice. 4. According to the Appellant/Petitioner, the facts of the instant case are unique , and that the Adjudicating Authority/Tribunal should have borne in mind that the principles enunciated in the Judgement of the Hon ble Supreme Court of India in Ghanashyam Mishra sons (P) Ltd Vs. Edelweiss Asset Reconstruction Co Ltd, reported in (2021) 9 SCC 657, do not apply, in as much as the Appellant s claim arose during the Corporate Insolvency Resolution Process and after the Resolution Plan for 1st Respondent was approved by the Adjudicating Authority/Tribunal, Mumbai. 5. It is represented on behalf of the Appellant/Petitioner that it was impossible for the Appellant/Petitioner to have filed the claim before the 2nd Respondent. As a matter of fact, even for the claims that arose before the approval of the Resolution Plan, the Appellant could not have approached the 2nd Respondent for these claims as it was never informed of the 1st Respondent CIRP . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel for the Appellant points out that the Hon ble High Court of South Africa s Judgement does not prevent the Appellant from initiating the present proceeding and that the Appellant, had approached the Adjudicating Authority/Tribunal , Mumbai, independently on the original and underlying cause of action . Indeed, the I B Code, 2016, according to the Appellant , does not contemplate such an exclusion and a reference is made to the decision, in Intesa Sanpaolo S.P.A. V Videocon Industries Ltd, reported in 2013 SCC OnLine Bom 1910 (paragraph No.51). 13. Continuing further, it is the version of the Appellant that 2nd Respondent in paragraph 10 of the Affidavit in Reply dated 23.10.2023 had stated that 1st Respondent, did not have an office at the address mentioned, in the contract nor did the 1st Respondent, have Business Operation at the Masa Ngwedi C D sites , and this is a blatant lie. 14. According to the Appellant/Petitioner, the 1st Respondent had issued a Press Release dated 27.06.2016 to the Indian Stock Exchanges in respect of the turnkey contract awarded to the 1st Respondent for Masa Ngwedi sites in South Africa. 15. The Learned counsel for the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. The stand of the Appellant, is that the Appellant/Petitioner and the 1st Respondent had entered into a Rental Agreement , in October, 2017 and January, 2018, which was later, orally, extended to May and August, 2018 and that the formation and execution of these Agreements was during 1st Respondent s CIRP. 21. According to the Appellant, the Respondent No.2, cannot feign ignorance and deny its existence on the premise, that she had not authorised the execution of these Agreements and this is an internal affair of the 1st Respondent, which casts a cloud of doubt on how the 2nd Respondent had managed the affairs of the 1st Respondent. In any event, according to the Appellant, it cannot be deprived of its legitimate dues under the pretext of Lack of Authority . Furthermore, the 1st Respondent had effected Partial Payments , to the Appellant, based on the Rental Agreements and these payments were not authorised, how they were made in the first place. 22. According to the Appellant, even if the 2nd Respondent assertion of not having knowledge of the existence of the rental agreement and Appellant s dues under it, before the Appellant s letter dated 07.05.2021, infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trol , to the new management, was referred to as the MC Period . 29. The Learned counsel for the 1st Respondent, points out that the new management of the 1st Respondent had paid, all costs, accrued towards CIRP costs , as defined under the I B Code, 2016 and had informed to the 1st Respondent. Also that, the costs, as communicated, to have been incurred, during the MC Period , also had not included any such costs , allegedly owed to the Appellant. 30. According to the 1st Respondent, only when the Appellant/Petitioner served a copy of the Adjudicating Authority/Tribunal application, on the 1st Respondent, somewhere in February, 2023, only then, the new management of the 1st Respondent was made aware of the purported Rental Agreements , entered into between the Appellant and the 1st Respondent , in the year 2017 and 2018. 31. Also that, according to the Appellant, when the records of the 1st Respondent, was handed over to the new management of the 1st Respondent at the time of transfer of control , the 1st Respondent was not having the Purported Contract , or any invoices raised thereunder. In this regard, on 28.9.2021, the Erstwhile Resolution Professional had r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled with the Resolution Professional) and all such claims against the Company along with any related legal proceedings shall be liable to be irrevocably and unconditionally abated, settled and extinguished. This condition relating to such extinguishment of claims and related legal proceedings being liable to be irrevocably and unconditionally abated, settled and extinguished, shall be deemed to form an integral part of the order by the NCLT approving the Final Resolution Plan and shall accordingly be binding on all the stakeholders including the Company, its employees, workmen, financial and operational creditors, guarantors, security providers, and other stakeholders. The treatment accorded to the persons receiving settlement under this Final Resolution Plan shall constitute an absolute discharge and settlement of the dues. and submits that no amounts other than those covered under the Approved Resolution Plan , such as the sum, allegedly payable pursuant to the purported contract, can be claimed, from the new management of the 1st Respondent and all such claims stood extinguished under the I B Code, 2016, upon the Approval of the Resolution Plan by the Adjudicating Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btors , undergoing CIRP . More importantly, the Adjudicating Authority/Tribunal is given powers, under Section 60(5) of the I B Code, 2016, to determine any question of law or fact , arising out of, in/or in relation to the Insolvency Resolution or Liquidation proceedings of the Corporate Debtor or Corporate Person under this Code. 39. According to the 1st Respondent, the Appellant/Petitioner, is endeavouring to execute the Foreign Judgement against the 1st Respondent through specific order of the Adjudicating Authority/Tribunal and this Appellate Tribunal, when no such powers are showered either upon the Adjudicating Authority/Tribunal or this Appellate Tribunal , as per Section 60(5) of the I B Code, 2016. 40. The Learned counsel for the 1st Respondent seek in aid of the Judgement of this Tribunal dated 30.11.2018 in the matter of Usha Holdings LLC Anr Vs Francorp Advisors Pvt Ltd (vide Comp App (AT)(Ins) No.44 of 2018) wherein at paragraphs 6 and 7 it is observed as under:- 6. In Binani Industries Limited Vs. Bank of Baroda Anr. Company Appeal (AT) (Insolvency) No. 82 of 2018 etc. , this Appellate Tribunal by its judgment dated 14th November, 2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarding the insolvency of the entity, nor willing to take the risk of postponing payments for better future prospects for the entity. The Committee concluded that for the process to be rapid and efficient, the I B Code will provide that the creditors committee should be restricted to only the Financial Creditors . ii. In Para 3.4.2 dealing with Principles driving design , the principle IV reads as under: IV. The I B Code will ensure a collective process. 9. The law must ensure that all key stakeholders will participate to collectively assess viability. The law must ensure that all creditors who have the capability and the willingness to restructure their liabilities must be part of the negotiation process. The liabilities of all creditors who are not part of the negotiation process must also be met in any negotiated solution. b. The I B Code aims at promoting availability of credit. Credit comes from the Financial Creditors and the Operational Creditors . Either creditor is not enough for business. Both kinds of credits need to be on a level playing field. Operational Creditors need to provide goods and services. If they are not treated well or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hip, availability of credit, and balance the interests of all the stakeholders. It is not a sale. No one is selling or buying the Corporate Debtor through a Resolution Plan . It is resolution of the Corporate Debtor as a going concern. One does not need a Resolution Plan for selling the Corporate Debtor . If it were a sale, one can put it on a trading platform. Whosoever pays the highest price would get it. There is no need for voting or application of mind for approving a Resolution Plan , as it will be sold at the highest price. One would not need Corporate Insolvency Resolution Process , Interim Resolution Professional , Resolution Professional , interim finance, calm period, essential services, Committee of Creditors or Resolution Applicant and detailed, regulated process for the purpose of sale. It is possible that under a Resolution Plan , certain rights in the Corporate Debtor , or assets and liabilities of the Corporate Debtor are exchanged, but that is incidental. It is not an auction. Depending on the facts and circumstances of the Corporate Debtor , Resolution Applicant may propose a Resolution Plan that entails change of management, tech ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Civil Procedure Code, 1908, a Foreign Judgement where the proceedings, in which the Foreign Judgement was obtained, are opposed to the principles of natural justice of Audi Alterem Partem , cannot be enforced in India. As such, the Foreign Judgement, which was passed by the Hon ble High Court of South Africa, Ex Parte , cannot be enforced in India. CONTENTIONS OF 2ND RESPONDENT 43. The Learned Counsel for the 2nd Respondent, submits that for the first time, the 1st Respondent, through a letter dated 07.05.2021, was informed by the Appellant, in regard to the case filed by the Appellant before the Hon ble High Court of South Africa Gauteng, Johannesburg, bearing case No.2020/14573 and the Judgement dated 06.10.2020, passed therein. As a matter of fact, the Appellant, had further enquired from the 1st Respondent as to whether it wishes to settle the matter amicably and that the 2nd Respondent, gave a reply on 17.05.2021 informing the Appellant about the ongoing CIRP of the 1st Respondent and the same was concluded on 27.03.2019, upon the Adjudicating Authority/Tribunal approving the Approved Resolution Plan . 44. According to the 2nd Respondent, it was cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned in the Appeal . 50. The Learned counsel for 2nd Respondent, points out that only after the conclusion of the CIRP , through the Appellant letter dated 07.05.2021, it was made aware of the purported contract. Also that through a letter dated 28.09.2021, the 2nd Respondent had requested the Appellant, to provide the copy of the alleged contracts and the relevant invoices relating to the claimed amounts , to it. 51. According to the 2nd Respondent, Section 13 of the Civil Procedure Code 1908 mentions that a Foreign Judgement , which has not been passed on merits of the dispute , shall not be regarded as being conclusive and the instant case on hand, a mere perusal of the Foreign Judgement , makes it clear that the same was not a Judgement , which was passed on the merit of the dispute , and it is only a Default Judgement . Hence, the Foreign Judgements , which forms substratum of the Appellant s case, is ipso jure not recognisable and/or capable of execution in India. 52. According to the 2nd Respondent, the Foreign Judgement cannot be deemed to represent a Debt enforceable under Indian Law . Therefore, the Appellant is not to be allowed to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to pay the Appellant/Applicant an amount of ZAR 90,53,355.58/- (South African Rands Ninety Lakhs Fifty Three Thousand Three Hundred and Fifty Five and Fifty Eight Cents only) alongwith interest at the rate of 2% per month, compounded monthly, from 15th June, 2020 till the date of payment, or the equivalent amount in Indian National Rupees; (ii) in directing the 1st Respondent to pay the Applicant an amount of ZAR 40,66,000 (South African Rands Forty Lakh and sixty thousand only) alongwith interest at 10% per annum, from 14.7.2020, till the day of payment, or the equivalent amount in Indian National Rupees. 59. In so far as the instant Appeal is concerned, this Tribunal pertinently points out that Section 60(5) of the I B Code, 2016 concerns with the Applications against a Corporate Debtor undergoing CIRP or claims against such Corporate Debtor , undergoing CIRP . Also that the Adjudicating Authority/Tribunal is enjoined with the power to determine any question of Law or Fact arising out of in, or in relation to the Insolvency Resolution or Liquidation Proceedings of the Corporate Debtor, or Corporate Person under this Code . 60. It cannot be disputed that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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