TaxTMI 
TaxTMI 
2017 (9) TMI 1534
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....0 p.m. at Hotel Park Inn by Radisson, 1 & 2, Ring Road, Vikram Vihar, Lajpat Nagar-4, Near Moolchand Metro Station, New Delhi 110 024; (b) to direct the IRP to consider the objections and submissions of the Applicant in its e-mail of February 20, 2017 and to (c) re-constitute the committee of creditors in accordance with law before calling for the First meeting of committee of creditors etc. 2. Brief contents, as contended in the application and are relevant to decide the application, are as follows: 1) The Applicant is the Asset Reconstruction Company incorporated and constituted under the Companies Act, 1956 and having its registered office at Edelweiss House, Off CST Road, Kalina, Mumbai, Maharashtra 400 098. The Applicant is one of the largest secured financial creditor of Synergies-Dooray Automative Limited (Corporate Debtor) of the financial debt by virtue of Assignment Agreement dated January 6, 2014 executed with Exim Bank, one of the original lenders of the Corporate Debtor. The total amount claimed by the Applicant against the Corporate Debtor as on January 23, 2017 (i.e. the date of submission of proof of claim (revised claim submitted on February 20, 2017) before the....
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.... was enjoying the protection of a moratorium granted under SICA until the repeal of the SICA on December 1, 2016. Accordingly, the main Company petition bearing CP (IB) No. 01/HDB/2017 is filed by the Corporate Debtor. 5) In pursuant to admission and appointment of IRP by the Tribunal, a public announcement of initiation of CIRP and call for submissions of claims under section 15 of the IBC read with regulation 6 of CIRP Regulations was made by the IRP on January 28, 2017 in Deccan Chronicle. Accordingly, the Applicant submitted its proof of claim dated February 6, 2017 in the format provided in form C of CIRP Regulations along with the supporting documents electronically vide its email dated February 7, 2017 in accordance with regulation 8 of the CIRP Regulations to IRP. However, the Applicant subsequently revised its claim amounting to Rs. 88,20,28,260.97 and requested the IRP to revise the amount claimed in accordance with Regulation 14(2) of the CIRP Regulations. 6) The Applicant states that in pursuant to receipt of proof of claim from the Applicant on February 7, 2017, the IRP by her email dated February 11, 2017 sought detailed calculation sheet of the claimed amount and....
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....cess costs. 8. To fix a limit upto which the Insolvency Professional, without the permission of the Committee, is entitled to initiate a debit transaction with the financial institutions maintaining accounts of the Corp orate Debtor. 9. To take note and approve the possession, control and custody of the assets of Corporate Debtor and necessary delegation of authority to Synergies Casting Limited (SCL) under an existing lease agreement. Any other matter with the permission of the Chair Hereto annexed and marked as Exhibits '3' and '4' are copies of the notice along with agenda for meeting of the CoC and information memorandum prepared by IRP respectively. 8) The Applicant has objected to the proposed delegation of authority to SCL for the reasons that SCL is both a related party as well as a secured creditor of the Corporate Debtor as is also recorded in the Initial Information Memorandum. Therefore, the agenda for the proposed meeting of the CoC is far reaching especially in view of the fact that the Initial IM submitted by IRP has prima facie defects and cannot be relied upon for the purpose of deciding the voting rights of the members of the CoC f....
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....ent Agreements raises serious questions on the intentions of the Corporate Debtor as well as its related party SCL. 13) The applicant has expressed apprehension that IRP chosen by Corporate Debtor or may not act bona fidely especially with regard to its interests. 14) The applicant has further filed additional affidavit by inter-alia contending as follows: 15) The applicant has given detailed agenda wise objections to first meeting of COC. The first meeting was attended by Ms. Nivedita Shetty, on behalf of the Applicant (Authorised Representative of the Applicant), who raised her concerns agenda wise. However, despite the receipt of the aforesaid objections of the Applicant and without taking cognizance of concerns raised by the Authorized Representative of the Applicant in the meeting, the Respondent No. 1 proceeded with the said First meeting of CoC and approved all the agenda(s) of the meeting. The minutes of the First Meeting CoC (Minutes) were received by the Applicant vide Respondent No. 1's email dated February 24, 2017. However, it is noticed that some of comments of its Authorized Representative were not included. And its grievances were not attended by IRP. 3. ....
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....eir claims under Regulation 10 so that the said claims can be verified and adjudicated in accordance with Regulation 13(1). 6) That till the expiry of the last date of submission of claims (i.e. by 08.02.2017), she had received claims from four Financial Creditors, namely (i) the Applicant herein, (ii) Alchemist Asset Reconstruction Company Ltd., (iii) Millennium Finance Ltd. and (iv) Synergies Casting Ltd. Accordingly, a list of creditors in terms of Regulation 13(2) was prepared on 14.02.2017 and was intimated to the Tribunal on 15.02.2017. The Public Notice is dated 08.02.2017. That subsequent to the preparation of list of creditors, a Committee of Creditors was constituted by her on 15.02.2017 and a report to that effect was also filed before this Tribunal on 17.02.2017 in accordance with Regulation 17(1) of IBBI Regulations 2016. As per Regulation 17(2), first meeting of the Committee of Creditors should be convened within 7 days of filing of report certifying constitution of Committee of Creditors. Since the report was filed on 15.02.2017, a meeting had to be convened meeting on or before 22.02.2017. 7) It is stated that Information Memorandum was prepared in accordance w....
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....n verified and accepted on the basis of documentary evidence on record. 11) It is contended that Regulation 28 of the IBBI Regulations 2016, permit transfer/assignment of debt due to creditors even during the pendency of the Insolvency Resolution Process. So the contention made contrary by the applicant is not tenable. The Master Restructuring Agreement dated 06.03.2007, wherein the original Banks (which also includes the Assignor of the Applicant herein) had specifically inter-se confirmed the status of their outstanding dues which confirmed that the Assignor of the Applicant held only 8.65% of the secured debts relating to the Corporate Debtor. 12) With respect to taking note and approving the possession, control and custody of the assets of the Corporate Debtor and necessary delegation of authority of Synergies Castings Ltd. under an existing Lease Agreement, the Applicant herein was informed that the operations of the Corporate Debtor were managed under the said Lease Agreement since 2005 and also during the pendency of the reference of the Corporate Debtor before the BIFR and even prior to the filing of the reference by the Corporate Debtor, the lease in favour of the Syne....
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....ken over the loans of the Corporate Debtor from the original lenders. 15) EARC, in the instant case took over the debts of EXIM Bank through an Assignment Deed dated 06.01.2014. By the time, EARC had taken over the debts from EXIM Bank, an order dated 29.05.2012 passed by the BIFR was already in force, which categorically provided that the dues of EXIM Bank are to be settled at 26.66% of its principal outstanding. On this basis, EXIM Bank (who is the predecessor in interest of EARC) would be entitled to receive only an amount of Rs. 4.89 Crores if the outstanding as per the MRA dated 06.03.2007 is taken as the principal amount. In fact, the principal amount due to EXIM Bank is much less than the amounts as mentioned in the MRA. The said order of the BIFR though under challenge before the Appellate Authority in Appeal No. 137 of 2012, no stay order was existing on the date of the assignment, despite the said EARC acquired the debts from EXIM Bank without either any intimation or permission to BIFR or the AAIFR. Thus, it is evident that EARC in the present case acquired the debts during the pendency of the reference of the Corporate Debtor with the BIFR and existence of an order of....
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....ts Financial Creditors in the following manner:- Name of the Financial Lender Amount outstanding (Rs. in Crores) Percentage Alchemist Asset Reconstruction Company (Assignee of JP Morgan Chase) 122.07 16.47% EARC (Assignee of EXIM Bank) 65.01 8.77% Synergies Castings Ltd. (Assignee of Andhra Bank & Indian Overseas Bank) 63.87 8.61% Millennium Finance Ltd. (Assignee of Debt of SCL, which SCL, had originally acquired from ARCIL, IDBI and SBI) 490.39 66.15% TOTAL 741.33 100% 16) EXIM Bank/EARC is the sole party defeating the rehabilitation of the Corporate Debtor The present case is a clear case of one minority creditor attempting to steal a march over all the other creditors of a Corporate Debtor. The facts and circumstances of the instant case which establish beyond doubt the fact that in the instant case EXIM Bank and now EARC are the sole parties which despite being the minority creditor of the Corporate Debtor has stalled the entire process of rehabilitation of the Corporate Debtor. The creditors of the Corporate Debtor, in the instant case, can be broadly categorized under the following heads:- (i) Secured Creditors as defined under Section 2(1)(zd) of the S....
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....the BIFR, the Corporate Debtor had filed an Application being MA No. 136 of 2012 with the BIFR on 29.03.2012 seeking permission to continue with the arrangement of lease till the sanction of the scheme. The BIFR vide its order dated 29.05.2012 permitted the Corporate Debtor to continue with the lease till sanction of the scheme or till 31.03.2013, whichever was earlier. However, as the scheme could not be sanctioned by the BIFR in view of the non-cooperative and adamant approach of EXIM Bank (now EARC), the Corporate Debtor filed MA No. 171 of 2013 with the BIFR seeking extension of the lease arrangement which was otherwise to expire on 31.03.2013 and this application was kept pending on the file of the BIFR on the date of coming into force of the SICA Repeal Act i.e. 01.12.2016. Thus, no final order was passed in the application of the Corporate Debtor and the lease in favour of SCL continued to subsist w.e.f. October, 2005. Further, in terms of the provisions of IBC 2016 there is no restraint on any Corporate Debtor to lease out its facilities. The trigger point for initiation of CIRP is only default based i.e. amongst others; the Corporate Debtor is also eligible to initiate the....
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....to dismiss the application under reply as devoid of any merit with costs. 4. We have heard Mr. S. Niranjan Reddy, Senior Advocate with Ms. Jyoti Singh, Ms. Rubaina Khatoon and Mr. P. Mohith Reddy, Advocates, Mr. A.D. Gupta, Mr. Krishnendu Datta, Mr. P. Vikram, Mr. Nitish Bandary, Advocates for the Respondents. We have carefully considered various lengthy averments made by the parties along with material papers filed in their support. 5. By reading of various averments made by the parties as briefly stated above, the following main points arise for consideration by the Tribunal. (1) Whether the Interim Resolution Professional/RP has followed the procedure prescribed under IBC, 2016 and the extant rules framed thereon by following principles of natural justice; (2) Whether assignment of Debt Assignment agreements dated 24th November, 2016 in question by Corporate Debtor being Synergies Casting Limited (SCL) Respondent No. 4 herein to the third Non-Banking Financial Company (NBFC) i.e. Millennium Finance Limited (MFL) Respondent No. 5 is valid or not; (3) Whether MFL come under the category of related party as contended by the applicant; (4) What is status of various orders ....
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....ting of the Committee of Creditors to be held on 22.02.2017 by granting liberty to the applicant to participate in the meeting and raise its objections/grievances. Accordingly, the Petitioner availed the said meeting by raising some other objections just before 10 minutes of the scheduled time and those objections are stated to be similar to the objections raised by the Applicant. 8. So far as the issue relating to allegation of related party, it is to be mentioned here that the applicant like that of MFL got subsequently assigned debt of original lenders. The litigation started by the applicant right from initiation of case before BIFR and EXIM Bank, its original assignee, which is one of seven Creditors of Corporate Debtor. As rightly pointed out by the Learned Resolution professional, MFL cannot be termed as related party and the applicant has no locus standi to question various rights obtained by MFL from SCL by Assign Agreement Deeds in question. The applicant is making everything a serious issues right from stage of BIFR till date. We have examined the legality of Assignment deeds in question in detail in the subsequent CA No. 57 of 2017, wherein we have passed a detailed or....