2023 (4) TMI 1200 - AT - Insolvency and Bankruptcy

Appeal dismissed due to delay and lack of standing, Impugned Order upheld, affecting enforcement of security interest.

Asset Reconstruction Company (India) Limited Versus Mr. Ebenezar Inbaraj, Resolution Professional of M/s. Regen Powertech Private Limited, Mr. Madhusudhan Khemka, Mr. Sundaresh Ramanathan, M/s. Regen Infrastructure and Services Pvt. Ltd.

The Tribunal dismissed the appeal filed by the Petitioner/Appellant, ruling it as not maintainable due to delay and lack of standing to challenge the ... Enforcement of Security Interest for recovery of its Outstanding Dues - Seeking to nullify the Security Interest created to and in favour of the Petitioner/ Appellant and L & T Infra Investment - grievance of the Petitioner/ Appellant, is that the Adjudicating Authority (National Company Law Tribunal, Division Bench – II, Chennai), without considering the Concept of Relief Period, mentioned under Section 46 (1) (i) and /or Section 46 (1) (ii) of IBC and without considering the Contentions/ Objections, raised by the Suspended Directors - HELD THAT:- In the instant case, the Petitioner/ Appellant, although, being a Secured Financial Creditor of the Respondent Nos. 1 & 4/ Corporate Debtors, and not arrayed as Party, in the Petition, in IA(IBC)/400(CHE)/2021 and that the Petitioner/ Appellant, has filed the instant Comp. App (AT) (CH) (INS.) No. 325 of 2022, as an Aggrieved Person, yet this Tribunal, is of the earnest opinion that the Resolution Applicant of RPPL, had taken over the Corporate Debtor (ofcourse with a clean slate), after Approval, of its Resolution Plan, by the Adjudicating Authority / Tribunal, and in that perspective, the Petitioner/ Appellant, has No Locus Standi, to challenge the said Plan, or Corporate Insolvency and Resolution Process Proceedings of the Corporate Debtor. As such, the filing of an IA No.696 of 2022 in Comp. App (AT) (CH) (INS.) No. 325 of 2022, seeking Leave, to prefer the instant Appeal, before this Tribunal, cannot be sought for, with an inordinate and inexplicable delay, in the considered opinion of this Tribunal. It must be borne in mind, that when RISPL, itself, had no Rights, in the Properties, the aspect of any Rights, having been vested on the same, to and in favour of the Petitioner/ Appellant, by the Security, created by RISPL, will not arise. In any event, the Impugned Order, dated 30/05/2022 in IA(IBC)/400(CHE)/2021 in IBA/1099/2019, passed by the Adjudicating Authority / National Company Law Tribunal, Division Bench – II, Chennai, does not take away the Rights of Petitioner/ Appellant, in any manner. This Tribunal, on a careful consideration of the divergent contentions advanced on either side, all the more, when RISPL, itself , had no rights in the Properties in question, any Rights, having been vested on the same, to and in favour of the Petitioner / Appellant, by Security, created by RISPL, does not arise, bearing in mind, a crystalline fact that the Rights of the Petitioner / Appellant, are not taken away, by means of the Impugned Order, dated 30/05/2022, in IA(IBC)/400(CHE)/2021 in IBA/1099/2019 (on the File of the Adjudicating Authority / National Company Law Tribunal, Division Bench – II, Chennai), comes to a consequent conclusion, that the IA No. 696 of 2022 in Comp. App (AT) (CH) (INS.) No. 325 of 2022, preferred by the Petitioner / Appellant, (seeking Leave to prefer the instant Appeal), is Ex facie, not maintainable, and it fails. Petition dismissed. Issues Involved:1. Recognition of the Petitioner/Appellant as a 'Secured Creditor' and its rights under the SARFAESI Act, 2002.2. Validity of the 'Impugned Order' by the Adjudicating Authority.3. Petitioner's locus standi to challenge the Resolution Plan and Corporate Insolvency Resolution Process (CIRP).4. The maintainability of the appeal and related interlocutory applications.Summary of Judgment:Issue 1: Recognition as a 'Secured Creditor'The Petitioner/Appellant argued that it is a recognized Financial Institution under the Recovery of Debts and Bankruptcy Act, 1993, and a 'Secured Creditor' under the SARFAESI Act, 2002. The Original Lender had provided financial assistance to the 4th Respondent by subscribing to Optionally Convertible Debentures (OCDs), which were secured by mortgage over the 4th Respondent's leasehold rights and other assets. This debt and security were assigned to the Petitioner/Appellant through a Registered Deed of Assignment.Issue 2: Validity of the 'Impugned Order'The Petitioner/Appellant contended that the Adjudicating Authority did not consider the 'Concept of Relief Period' under Section 46 of the Insolvency and Bankruptcy Code, 2016, and allowed the IA/400(CHE)/2021 in IBA/1099/2019 without properly evaluating the authenticity of the transactions. The Petitioner/Appellant argued that the Impugned Order adversely affected its rights to enforce the security interest for recovery of outstanding dues.Issue 3: Locus Standi to Challenge the Resolution PlanThe 1st Respondent countered that the Petitioner/Appellant was not a party to the original petition and thus had no locus standi to challenge the Resolution Plan approved by the Adjudicating Authority. The Tribunal agreed, stating that the Resolution Applicant had taken over the Corporate Debtor with a clean slate, and the Petitioner/Appellant had no rights to challenge the plan or the CIRP proceedings.Issue 4: Maintainability of the AppealThe Tribunal concluded that the appeal filed by the Petitioner/Appellant was not maintainable due to inordinate and inexplicable delay. The Tribunal also noted that the Petitioner/Appellant, as a controlling stakeholder, could not present a case different from that of the 4th Respondent, which had already filed an appeal.Conclusion:The Tribunal dismissed IA No. 696 of 2022, seeking leave to prefer the appeal, as ex facie not maintainable. Consequently, the main appeal, Comp. App (AT) (CH) (Ins.) No. 325 of 2022, was also rejected. The related interlocutory applications were closed. The Tribunal also dismissed IA No. 1107/2022, filed by L & T Infra Investments Partner, seeking to be impleaded as a respondent, as not maintainable.