TaxTMI 
TaxTMI 
2017 (10) TMI 619
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....IBBI/lPA-001/IP- P00144/2017-18/10308 was appointed as the Interim Resolution Professional with the following directions: - (i) The term of appointment of Mr. Anil Kumar shall be for a period of 30 days from the date of his appointment as Interim Resolution Professional or as may be determined by the committee of creditors whichever is earlier. (ii) In terms of Section 17 of the 'Code', from the date of this appointment, the powers of the Board of Directors shall stand suspended and the management of the affairs shall vest with the Interim Resolution Professional and the officers and the managers of the 'Corporate Debtor shall report to the Interim Resolution Professional, who shall be enjoined to exercise all the powers as are vested with Interim Resolution Professional and strictly perform all the duties as are enjoined on the Interim Resolution Professional under Section 18 and other relevant provisions of the 'Code', including taking control and custody of the assets over which the Corporate Debtor has ownership rights recorded in the balance sheet of the 'Corporate Debtor etc as provided in Section 18(1)(f) of the 'Code'. The I....
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....of the company w.e.f. 20.7.2017 and run it as a going concern during the term of his appointment and after a lot of persuasion, R-2 agreed that the Applicant could come on 22.07.2017 to take charge of the "Corporate Debtor". 4. The events that happened on 22.07.2017 have also been described in detail. One Mr. Ravindra Sachdeva who was present at the site on 22.07.2017 at 11.30 a.m introduced himself as Consultant Chartered Accountant to the Corporate Debtor and informed the applicant that he has been deputed by R- 2 and told that he was not in possession of any information or documents relating to the Corporate Debtor and that there was no other person available in the entire premises except the Security Guard deployed at the entrance gate. On visit to the premises, it was found that there was not a single piece of Plant and Machinery, Spare Parts. Tool Kit, Raw Material. Work in Progress, finished goods or any other asset except the structure of plant shade standing on the iron Pillars. The applicant even did not find any Books of Account, records or any computer system in the office of respondent No.1. 5. On 24.07.2017 the Applicant along with Chief Managers of Canara Bank ....
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....uired under the Code vide order dated 20.07.2017; (b) Issue directions to the District Administration Ludhiana (Punjab) to provide necessary assistance to the Applicant including Police Protection in discharging his duties as Interim Resolution Professional of Respondent-1; (c) Issue directions to the SSP Ludhiana to provide necessary Police Protection to the applicant in discharging his duties as Interim Resolution Professional of Respondent-1; and (d) To pass such order as may be deemed fit, proper and necessary in the facts and circumstances of the case including levy of penalties under Section 70 of the I & B Code. 2016. 10. R-2, Director of the Corporate Debtor filed reply to this application. The preliminary objection raised is that after expiry of 30 days from the date of appointment, the Applicant became functus officio in terms of section 16(5) of the Code which was also a term of his appointment vide order dated 20.07.2017. This period of 30 days cannot be extended in the exercise of inherent powers of this Tribunal. The Applicant can only function now after the expiry of 30 days if he is appointed as Resolution Professional as provided under....
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....on to him. The respondents were unable to provide the required information in view of the complete exodus of staff and workers due to the distressing scenario arising on account of initiation of proceedings under Section 13(4) of the Securitization Act. 2004. Further, the advertisement was not published by the Applicant in the newspapers which should be in wide circulation in the area where the Registered Office of the company is situated It is admitted that a complaint dated 04.08.2017 was lodged with Police authorities alleging illegal acts committed by the Applicant. The complaint to the Police is at Annexure R-2/2 which is limited to the illegal action of the Applicant in seeking to lock the premises in question even when the factum of existence of ownership and residence of the directors and the business concern of the third party viz, M/s. Prabhakar Cycles Industries was brought to the notice of the police Regarding books of accounts. Plant and Machinery, computers etc., the same are not available as on date and had to be removed due to unfavourable market conditions of the Corporate Debtor and the respondents wanted to shift the business operation from manufacturing to an as....
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....nd its personnel did not provide any record, books of accounts, balance sheets etc. for the last 2 years as is clear from the 1st 2nd and 3rd progress report submitted to this Tribunal on 28.07.2017, 11.08.2017, 21.08.2017 and 28.08.2017 etc. 19. The Applicant/IRP received 3 claims on the basis of the advertisement and admitted those claims on 04.08.2017. Meetings of Committee of Creditors is required to be convened within 7 days of filing of the report with the Adjudicating Authority in terms of Regulation 17(2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations. 2016 (for short the 'Regulations'). The report with regard to constituting of the Committee of Creditors was filed in the Tribunal on 14.08.2017 and meeting was scheduled to be held on 19.08.2017 which was the last date of tenure of IRP. The date of meeting was extended at the request of Canara Bank which is the Lead Bank and the meeting was scheduled to be held on 26.8.2017 and then 28.8.2017. There is email sent by the Applicant (IRP) on 21.08.2017 at page 25 of the reply, to both the financial creditors intimating them that the date of Committee ....
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....wer to waive or reduce the interest was not sustained. It was further held that assuming that there is any inherent power, that cannot be exercised contrary to the express provisions of the Act. It was also held that there being express provision in regard to the levy of interest under Part F of Chapter XVII even if there is any inherent power in the Commission such power cannot be exercised contrary to the provisions of the said Chapter. 24. I am of the view that the principle held under the Income Tax Law can be made applicable to the present case, because the Insolvency and Bankruptcy Code is complete Code in itself and the consequences of non- appointment of Resolution Professional before the expiry of 30 days period of IRP have not been provided in the Code The proceedings before the IRP or the Resolution Professional, as the case may be, cannot be left in the lurch as there is a specific period for completion of insolvency process provided in Section 12 of the Code which reads as under:- "(1) Subject to sub-section (2), the corporate insolvency resolution process shall be completed within a period of one hundred and eighty days from the date of admission of the ap....
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....of the Interim Resolution Professional as 30 days is mandatory or directory requirements. This can be found in the provisions of the Code and the Regulations framed thereunder. 27. The Applicant's representative referred to Regulation 17 of IBBI (CIRP) Regulations. 2016 which says in Clause (1) that the IRP shall file the report certifying the constitution of the Committee of Creditors to the Adjudicating Authority on or before expiry of 30 days from the date of his appointment. This compliance has been made as the report was filed on 14.08.2017. Clause (2) of this Regulation further says that IRP shall convene first meeting of the Committee of Creditors within 7 days of filing of the report under this Regulation. The first meeting of COC was scheduled for 19.08.2017. Therefore, the scheme of the Act coupled with the Regulations make the intention of the legislature quite clear. It is apparent from the record that Canara Bank is totally non co-operative with the IRP in the holding of meeting of COC. 28. The agenda for the meeting of the Committee of Creditors which was scheduled for 19.08.2017 was sent by email dated 14.08.2017 at page 8 of the documents filed with index ....
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....bers of the Committee of Creditors, Mr. DK. Mahajan, Chief Manager, Bank of Maharashtra was not available on 28.08.2017 and therefore a request was made to postpone the meeting to first week of September. 2017. This stand of Canara Bank has been belied by Bank of Maharashtra vide email dated 25.08.2017 as at page 6 of these documents, that Bank of Maharashtra is very much ready and prepared to attend the meeting on 28.08.2017 even if its local Chief Manager Mr. Davinder Kumar Mahajan is not available on the said date. It was stated that Chandigarh Zonal Office of Bank of Maharashtra would make necessary arrangements for the meeting. Therefore, a Dig question arises as to what was the locus standi of the Chief Manager of Canara Bank in seeking to postpone the meeting of COC scheduled for 28.08.2017? The meeting scheduled for 28.08.2017 could not be held as Canara Bank did not represent itself in the meeting of COC held on 28.08.2017 though the excuse sent by Canara Bank was that the Chief Manager of Bank of Maharashtra was not available. There was a representative of Bank of Maharashtra attending the meeting but it holds only 14.6% of the voting share whereas Canara Bank holds 85% o....
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....onal. 34. The e-voting agreement was entered into with the CDSL, an agency for the purpose of e-voting. The e-voting result is Annexure-D with these documents. The result shows that both the Financial Creditors participated in the meeting and there was 100% voting cast against all the five agenda items. 35. Therefore, it was the duty of the Committee of Creditors to file an application before the Adjudicating Authority for appointment of a Resolution Professional in terms of sub-section (3)(b) of the Insolvency and Bankruptcy Code. 2016 No such application has been filed so far. 36. Looking into the aforesaid circumstances and the dilly dallying tactics of the Financial Creditors especially Canara bank, necessary directions apart from the directions to the responsible officers of Canara Bank need to be issued. It is further held that consequence thereof is that the Applicant appointed by this Tribunal would continue to function as a Resolution Professional in terms of the Code and the Regulations framed therein till he is replaced. It is thus held that the Interim Resolution Professional does not become functus officio to stall the resolution process in the petition which ....
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....the respondent- Bank i.e. State Bank of India and at the same time was claiming to continue with the Bank. Hon'ble High Court further held that in the absence of any legal right created by any agreement, it cannot be said that the action of the respondents in de-panelling the petitioner before the Hon'ble High Court, was vitiated. The above contention of the learned counsel for Intervener is without substance. Simply because State Bank of India has dis-empanelled Gats Financial Reconstructors Limited that cannot ipso facto apply in case of both the Banks who are the Financial Creditors. It is not disputed that Gats Financial Reconstructors Limited is a registered valuer The submission of authorised representative of the Applicant was that the information of the Valuers was searched from Internet. The message was sent at the email of Gats Financial Reconstructors Limited. The aforesaid valuer sent email (Annexure 4) dated 23.08.2017 attached with reply to the application of the Intervenor that he is empanelled with Bank of Maharashtra, Oriental Bank of Commerce, Punjab National Bank, Karnataka Bank Limited, IFCI Limited, Bank of Baroda and other Banks. In any case, if the Fi....