TaxTMI 
TaxTMI 
2018 (5) TMI 1556
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..../2018 filed by Resolution Professional (for brevity 'RP') under Sections 30 & 31 of the Insolvency and Bankruptcy Code, 2016 (for brevity 'the Code') with a principal prayer of accepting the resolution plan approved by the Committee of Creditors (for brevity 'CoC') submitted by HI Resolution Applicant. The resolution plan has been filed by TATA Steel Limited (for brevity TSL') in the Corporate Insolvency Resolution Process (for brevity (CIR Process') of the Corporate Debtor. A further relief has also been sought to grant various concessions as envisaged in the resolution plan and approved by the CoC. These concessions have been duly extracted in Annexure-8. (ii) C.A. No. 186(PB)/2018 filed by Larsen & Toubro Limited with a prayer that the applicant therein shall be treated as secured creditor as against their assigned status of unsecured/operational creditor. (iii) C.A. No. 217(PB)/2018 filed by the Bhushan Employees seeking direction to the RP to decide the objection raised by them and; (iv) C.A. No. 176(PB)/2018 filed by RP under Section 19(2) of the Code. 2. Brief facts of the case necessary for disposal of the controversy raised in the present proc....
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....n plan in compliance with the requirements of the Code, in order to ensure a fair and transparent system of evaluation and also to ensure that the best resolution plan for the Corporate Debtor is selected in the most transparent manner. The CoC at its 4th meeting held on 27.11.2017 appointed KPMG India Private Limited ('KPMG') as the evaluator of the resolution plans ('CoC Evaluator') and Shardul Amarchand Mangaldas & Co. as its legal counsel ('CoC Legal Advisor'). A process document dated 27.12.2017 amended and clarified from time to time for submission of resolution plans for the Corporate Debtor was issued to the prospective resolution applicants by the RP on behalf of the CoC. 5. In the 6th meeting held on 15.12.2017 the CoC decided to seek extension of time beyond the period of 180 days for the CIR Process to facilitate interested resolution applicants to submit their resolution plans in respect of the Corporate Debtor. The aforesaid resolution was voted and carried by 99.17% e-voting (by voting share) held on 18.12.2017 and 19.12.2017. Accordingly, we had granted extension vide order dated 21.12.2017 (Annexure-4). 6. The RP had received three resolution plans as on 03.0....
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....unal may approve and direct the grant of the reliefs and concessions envisaged in the CoC approved resolution plan (Annexure-8). 8. The RP states that from the date of the approval of the Resolution Plan by this Tribunal, this would be regarded as effective date and until the date on which all the steps for the implementation set out in Annexure 5 would be completed (closing date). The plan envisaged inter alia the following: "(a), that the RP, along with certain representatives of Deloitte Touche Tohmatsu India LLP shall be appointed by this Honble Tribunal as the monitoring agency for the Corporate Debtor ("Monitoring Agency"). The Monitoring Agency shall have the same functions, powers and protections as ascribed to the RP under the Code. The CoC shall continue with its roles and responsibilities, and have protections, as set out in the Code including approving the matters as are being approved during the period prior to the Effective Date. The powers of the board of directors of the Corporate Debtor shall remain suspended until the Closing Date, and shall be exercised by the Monitoring Agency; and (b) the Corporate Debtor and all its facilities shall continue to rec....
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....affirming their eligibility under Section 29A of the Code. After considering the objections, the clarifications, legal opinions and the legal advice independently obtained by the RP he has reached the conclusion that HI Resolution Applicant-TSL and JSW Living Private Limited were not ineligible under Section 29A of the Code on the grounds put forward by the Bhushan Employees. It was only after fully satisfying itself, the CoC reached the conclusion that no ground to disqualify the Resolution Applicant were made out in the objections raised by Bhushan Employees and JSW Living Private Limited. The decision of the CoC has been intimated to the authorized representative of Bhushan Employees and a copy of the order dated 09.03.2018 has been placed on record (Annexure-13). It is in the aforesaid facts and circumstances that the RP has made the prayer recorded in the opening para of this order. 11. Replies to the application have been filed by Bhushan Energy Limited, Bhushan Employees and TSL. Reply by Bhushan Energy Limited 12. In the reply filed by the Bhushan Energy Limited which itself is under CIR Process it has been submitted that the resolution plan adversely effect the ri....
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....sary transmission facility to transport power to the grid. iii. In terms of Clause 3(i) of PPA-1, the power is to be supplied to the Corporate Debtor at the cost of generation or INR 2.50 per KwH, whichever is higher. In terms of Clause 3(i) of the PPA-2, the power is to be supplied to the Corporate Debtor at grid rate or INR 3.35 per KwH, whichever is earlier. iv. Clause 3(i) expressly states that the lenders of BEL have agreed to provide funds to BEL for implementation and operation of the CPP on the basis of the PPAs. Further, the Corporate Debtor is contractually bound to make good any shortfall on the part of BEL in meeting its obligations to its lenders on account of the above rate(s). v. Clause 3(i) of the PPAs, the Corporate Debtor is contractually bound to make minimum payment to BEL towards supply of power under the PPAs that will be sufficient for BEL to meet its expenses, taxes and debt-service obligations to the lenders. Such minimum payments are to be adjusted by the Corporate Debtor against future payments to be made to BEL." 14. On account of financial stringency and to meet lenders' obligations BEL sought to revise its price for supply....
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....ted that the power purchase agreements must not be permitted to be terminated being onerous and if at all it is permitted then the same shall take effect from the expiry of three months of the closing date on the completion of CIR Process of BEL. According to further averments such a clause in the resolution plan is illegal and unenforceable. Reference has been to the provisions of Section 30 of the Code and Regulations 37 and 38 of the CIRP Regulations which set out the contours within which a resolution plan may be approved and given effect to. There is no power with the RP or CoC to annul contractual arrangements entered into by the Corporate Debtor with a 'related party. According to BEL it is different matter that provision has been made to avoidance of transaction which might be qualified as either 'preferential transactions' under Section 43 of the Code or 'under value transactions' under Section 45 of the Code. The contractual rights are recognized and protected under Article 300A of the Constitution and cannot be abrogated, superseded or taken away without due process of law. The claim has been unfairly rejected by the RP without clue consideration without even acknowledgi....
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....which contains details relating to compliance of Section 29A of the Code which has been withheld from the Tribunal. Despite information given to the RP and its counsel the documents have not been supplied. 18. There are further allegations of misrepresentation of facts and reference has been made to the averments made in para 23 of the application and order dated 19.03.2018 has been deliberately misquoted. Likewise, objection has been raised that there is no compliance of order dated 21.12.2017 and 19.03.2018 passed by this Tribunal. In the order dated 21.12.2017 we have directed the RP to bring to the notice of the CoC about the latest developments which have emerged from the issuance of ordinance on 23.11.2017. As the ordinance requires fulfilment of additional conditions it has to be taken into account during the progress of the CIR Process (Annexure R-2). 19. The stand taken in the reply is that examination of the resolution plan involves a serious public interest, as most of the members of the CoC belong to Public Sector Undertakings and fall within the purview of State as defined under Article 12 of the Constitution. Therefore, the proceedings before the Tribunal has to....
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....art of the resolution applicant-TSL. The TATA Sons executed an enforceable guarantee in favour of the creditor of the said company. Mr. Shankaran having been declared bankrupt and TSL being a related party would attract disqualification of TSL. In terms of schedule under Regulation 7(2)(g) of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016, the Resolution Professional must ensure that he maintains contemporaneous records for any decision taken, the reasons for taking the decision, and the information and evidence in support of such decision. The decision taken by the RP pertaining to the eligibility of the resolution applicants patently violated the Code of Conduct by which the RP is bound. The decision of the RP/CoC is also liable to be set aside being premeditated. According to RP if the decision on the eligibility under Section 29-A of the Code was to be taken by the CoC in the meeting held on 20.3.2018 then how TSL was declared as compliant HI Resolution Applicant in the CoC meeting held on 06.03.2018. The relief sought in the form of Annexure-8 can also not be granted. 22. According to the averments made the principles of natural ju....
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....cation filed by the RP. A copy of the process document and evaluation conducted in respect of two plans in the light of the criteria set up in the process document have been placed on record in a separate sealed cover. All other averments are the repetition of what the RP has stated in the application. Reply of Resolution Applicant-TSL 26. Reply to the objections raised by Bhushan Employees has also been filed Resolution Applicant-TSL. It has been urged that Bhushan Employees have no locus standi to challenge the decision taken by the CoC with respect to the eligibility of the Resolution Applicant as a successful bidder. The Bhushan Employees has not challenged the decision of the RP rejecting its resolution plan on the ground that Bhushan Employees failed to disclose its source of fund despite repeated clarifications sought. 27. It has also been submitted that the resolution plan submitted by Resolution Applicant-TSL contemplates that all employees on the roll of the BSL-Corporate Debtor would continue to be employed with the Corporate Debtor w.e.f. the date of transfer of the management/control of the Corporate Debtor to the Resolution Applicant, The interest of the empl....
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....f the Code are completely misinterpreted and misused which is abundantly clear in its intent. The applicant-L&T is trying to seek the relief which it should have sought in arbitration proceedings prior to the commencement of the CIR Process. The status of the L&T is clearly that of a supplier of goods and services and it would fall in the category of Operational Creditor of the Corporate Debtor. By no stretch of imagination, it could be regarded as a secured creditor which is patently against the provisions of the Code and invocation of Section 55(4)(b) of the Transfer of Property Act is wholly misuse of the process which has no relationship with the issue arising for consideration. Even the claim made by the L&T in its quantum and nature has been disputed. In the parawise comments similar reply has been tendered by the RP, The RP has also filed lists of documents. 31. The L&T has reiterated its assertions by filing a rejoinder. Submissions made by Shri Ravi Kadam, Learned Senior Advocate and Mr. Tushar Mehta, Learned Senior Advocate on behalf of RP and CoC. 32. Opening the arguments on behalf of the RP & CoC, Mr. Kadam & Mr. Mehta learned Senior counsel respectively ha....
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.... on the aforesaid date has also been noted and the liquidation value of the Corporate Debtor is stated to be Rs. 14541,00,00,000/-. 34. The HI Resolution Applicant has offered upfront payment of Rs. 35,200 crores in respect of the Financial Debt owed to the Financial Creditors and admitted by the RP. In addition, the HI Resolution Applicant has also provided for the following equity to the Financial Creditors in respect of the Financial Debt admitted by the RP, as a consequence of which, the Financial Creditors shall hold 12.27% (in the event that the erstwhile promoter group shareholding is not counted towards promoter shareholding for the purposes of SEB1 (Listing Obligations and Disclosure Requirements) Regulations, 2015 or 13.43% of the equity shares of the Corporate Debtor (in the event that SEBI does not allow the erstwhile existing promoter group shareholding to be counted towards public shareholding. The claims of the Operational Creditors admitted by RP is approximately Rs. 1,332 crores and the Resolution Applicant has offered to pay Rs. 1,200 crores to the Operational Creditors (other than Employees, Workmen and Related Parties) over a period of one year post completio....
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....d Senior counsel have also emphasized that the RP has certified in para 13 of C.A. No. 244(PB)/2018 and para 3 of the affidavit filed by Diary No. 1946/2018 and para 3 of the Diary No. 1923/2018 that the contents of the resolution plan meet all the requirements of the Code and the CIRP Regulations. 38. Mr. Kadam & Mr. Mehta, learned Senior counsel have then replied the objections raised by Bhushan Employees in their application No. 237(PB)/2018 and also in reply to the RP's application C.A. No. 244(PB)/2018. It has been submitted that the application and objections are not maintainable and it is a mala fide obstruction to derail the time sensitive CIR Process of the Corporate Debtor which is nearing imminent fruition. Learned counsel highlighted that the objections have been signed by one Mr. Rahul Sengupta alone. The objections raised by the Bhushan Employees vide its email dated 23.02.2018 do not contain any power of attorney/letter of authority/vakalatnama authorizing Mr. Sengupta to file any such application and objections on behalf of unnamed 352 employees of the Corporate Debtor. Therefore, the application is severely defective and is liable to be dismissed in limine. C.A.....
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....mon LLP. Accordingly, both the Resolution Applicants were found eligible without suffering from any disability contemplated by Section 29A of the Code. C.A. No. 217(PB)/2018 was filed by the Bhushan Employees which was disposed of vide order dated 19.03.2018 with direction to the RP to consider the objections of the Bhushan Employees in accordance with the law and the CoC in its 10th meeting held on 20.03.2018 thoroughly deliberated upon the objections on the eligibility of the two resolution applicants and it concluded that there were no grounds to disqualify either of the two Resolution Applicants on the basis of the objections raised by the Bhushan Employees. Accordingly, the RP provided an update to the Bhushan Employees vide his email dated 23.03.2018 (Annexure R-4 at page 75 or the RP's reply). Conviction of Tata Steel UK and disability of TSL 41. The Bhushan Employees raised an objection that a wholly owned subsidiary of TSL-Resolution Applicant is a connected person and the entity is known as Tata Steel UK. The aforesaid connected person has been found guilty on two counts under the Health and Safety at Work Act, 1974 (for brevity 'HSW Act5) vide an order dated 02.02.....
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....visions of Section 29-A(d) of the Code, learned counsel have submitted that it is to be presumed that the legislature was aware of the legal position on the issue of impossibility of awarding of a custodial sentence to a company yet it prescribed only for sentence and had the legislature intended to cover a juristic person like a company within the scope of Section 29-A(d) of the Code in addition to natural persons, it would have expressly specified punishment by imposition of a fine. Having not done that Section 29-A(d) of the Code is inapplicable to juristic persons and would only cover natural persons. It was then contended that Section 3(23) of the Code which defines the term 'person' also includes the term 'company' and the same has been made subject to the term 'unless the context otherwise requires. In this regard, reference has also been made to Section 29-A(e) of the Code which too ex facie applies to natural persons and not to corporate persons. It has also been submitted that conviction under the provisions of Section 33(1)(a) of the HSW Act, UK cannot be categorized and treated equivalent to the one contemplated by Section 29-A(d) of tthe Code as the UK Act provides for....
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....on Applicant-TSL specifically clarified that neither Mr. Sivasankaran nor Sterling Infotech Private Limited as a 'related person' or 'connected person' of the Resolution Applicant-TSL. As per Annul Report 2016 for Tata Teleservices Limited only 0.52% shares were held by Sterling Infotech Private Limited at the end of Financial Year 2016-17. It has also been clarified that Sterling Infotech Private Limited had taken a loan from SCB and pledged its shares in Tata Teleservices Limited to SCB. In order to prevent the shares from being sold to an undesirable entity, Tata Sons provided as undertaking to SCB that it would purchase the shares at a predetermined price in the event of an invocation and did not guarantee any repayment of loan taken by Sterling Infotech Private Limited from SCB. It was only seeking to purchase the shares which were in the nature of a pre-emption right and the undertaking lapsed almost nine years ago as it ceased to operate in March 2009 and was not acted upon by SCB. In any case that Seychelles Bankruptcy Order was subsequently revoked in 2016 and current status of Mr. Sivasankaran or Sterling Infotech Private Limited has not been placed on record. Therefore, ....
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....ateral increase from Rs. 5 per unit to Rs. 6.5 per unit w.e.f. financial year 2015 by way of a debit note dated 01.07.2017. D. No proof was provided showing approval from the Corporate Debtor regarding the revised billing and Debit Note nor any invoices were provided by the objector-BEL for the financial years 2015-2016 or 2016 corresponding to the Debit Note. It also failed to take note of Rs. 90,00,00,000 paid towards security deposit by the Corporate Debtor to BEL during the financial year 2015 which was over and above the aforementioned advance of Rs. 228.225 crores. E. Reliance has been placed on clause 3(i) of the tariff provision of the PPA-2 to argue that the tariff rate under the PPA was to be the rate equivalent to the grid rate or Rs. 3.35 per unit, whichever is higher. The unilateral revision is evidently not on account of any change in the grid rate as BEL has not so far claimed that the grid rate is higher than the tariff under the PPAs. It was further submitted that the treatment of PPAs under the resolution plan has been duly considered and approved by CoC in its commercial wisdom while approving the resolution plan and there cannot be any treatmen....
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....Section 29-A of the Code and it would require the RP to invite a fresh resolution plan where no other resolution plan is available with it. According to the learned counsel the resolution plan in this case have not been submitted in accordance with the provisions of Ordinance and amended Section 25(2)(h) of the Code. The order passed by this Tribunal in C.A. No. 237(PB)/2018 on 19.03.2018 have also not been complied with as there is not a word in the application with regard to the aforesaid decision. Learned counsel has maintained his objection with regard to conviction of Tata Steel UK under the provisions of HSW Act, UK and insisted that disqualification would be attracted by virtue of provisions of Section 29-A(d) of the Code. Highlighting the lapse on the part of the Resolution Professional, learned counsel has drawn our attention to the Code of Conduct in the first schedule appended to the 1BB1 (Insolvency Professional) Regulations, 2016 in assuchmuch as no informed decision has been taken as per the direction issued by this Tribunal in the order dated 19.03.2018 nor any of the opinion expressed by legal firms have been discussed. According to the learned counsel para 16 of th....
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....ing grievances. It appears that Mr. Sengupta is aggrieved by the fact that he has been working as Executive Director of the Corporate Debtor since 25.07.2005 and on account of loss of office as a director, he has an axe to grind. Accordingly, he suffered disqualification in terms of Section 29-A(c) of the Code. In that regard reliance has also been placed on the observations at page 364 of the judgment rendered in the case of Balco Employees Union (Regd.) v. Union of India, (2002) 2 SCC 333 and argued that the Bhushan Employees' group has no locus standi to raise objection to the resolution plan submitted by TSL. 53. Mr. Nayar has also submitted that the application C.A. No. 237 in fact goes against the interest of the employees and an attempt has been made to drive the Corporate Debtor into liquidation by raising frivolous objection so that the period of 270 days expires. In case there is liquidation then the large number of employees would be on the road as they would lose their jobs and livelihood whereas the resolution plan has ensured that they received their huge dues and also to continue to work in the company. It has also been submitted that the Adjudicating Authority is....
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.... regarded as a basis for interpretation of provisions of the Code. In that regard reference has been made to the UNCITRAL Guide to argue that the commercial decision of the CoC should not be interfered with and law should not permit the Court to review the economic and commercial basis of the decision. According to the learned counsel by virtue of the resolution plan the financial creditors would be able to get back about 67% of their loans and all the employees would continue to work and even otherwise the plan meets all requirements of Sections 30 & 31 of the Code and also all the requirements of the Regulations. Learned counsel has prayed that the resolution plan be approved by the Tribunal. Submissions made on behalf of the Bhushan Energy Limited 56. Mr. Rajeeve Mehra, learned Senior counsel has appeared on behalf of the RP of BEL and has argued that right in property cannot be snatched even by an act of Parliament as has, been held in the case of ICICI Bank Limited v. SJDCO Leathers Ltd., [2006] 10 SCC 452. Elaborating his stand, learned counsel has submitted that valid contracts are 'property' within the meaning of Article 300A of the Constitution and no person can be d....
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....nd out whether the requirements of the statute and subordinate legislation have been fulfilled or not. Sections 30 and 31 of the Code are set out in extenso which read as under:- "Section 30 Submission of resolution plan. (1) A resolution applicant may submit a resolution plan to the resolution professional prepared on the basis of the information memorandum. (2) The resolution professional shall examine each resolution plan received by him to confirm that each resolution plan- (a) provides for the payment of insolvency resolution process costs in a manner specified by the Board in priority to the repayment of other debts of the corporate debtor; (b) provides for the repayment of the debts of operational creditors in such manner as may be specified by the Board which shall not be less than the amount to be paid to the operational creditors in the event of a liquidation of the corporate debtor under section 53; (c) provides for the management of the affairs of the Corporate debtor after approval of the resolution plan; (d) the implementation and supervision of the resolution plan; (e) does not contravene any of ....
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....hall by order approve the resolution plan which shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution plan. (2) Where the Adjudicating Authority is satisfied that the resolution plan does not confirm to the requirements referred to in sub-section (1), it may, by an order, reject the resolution plan. (3) After the order of approval under sub-section (1),- (a) the moratorium order passed by the Adjudicating Authority under section 14 shall cease to have effect; and (b) the resolution professional shall forward all records relating to the conduct of the corporate insolvency resolution process and the resolution plan to the Board to be recorded on its database." 58. According to the scheme of the Code a resolution applicant is required to submit a resolution plan to the RP prepared on the basis of information memorandum. The information memorandum is a document envisaged under Section 29 and it is required to contain such relevant information as may be specified by the Insolvency and Bankruptcy Board of India. Accordingly, in Regulation 36 of the CIRP Regulation....
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....he highest bidder i.e. HI Resolution Applicant-TSL. Under the subtitle 'Mandatory Contents of the Plan' (para 5) the RP has clarified that in accordance with the provisions of Section 30(2) and Regulation 38 of the CIRP Regulations and as per the requirements of paragraphs 1.11 and 1.11.1 of the process document the resolution plan provides for payment of CIRP cost in priority to the repayment of any other debts of the company and identifies the specific sources of fund that would be used for such payment. In that regard reference has been made to Section 6.4 and 8.1.2 (i) of Annexure-3 and Annexure-5 of the plan. Therefore, this condition stands satisfied. Thirdly The resolution plan must provide for repayment of the debts of operational creditors in such a manner as may be specified by the Board which are not to be less than the amount to be paid to the operational creditors in the event of liquidation of the corporate debtor under section 53. It is appropriate to mention Section 53 of the Code envisaged the waterfall and the priorities in which distribution of assets of a Corporate Debtor is to take place in case of liquidation. The RP in the resolution plan (supra) has stated t....
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....iant with the requirements of the Code and the CIRP Regulations and on the recommendation of the CoC resolution applicant-TSL was notified as the HI resolution applicant. An affidavit by RP has also been filed on 10.04.2018 vide Diary No. 1923 of 2018 and para 3 of Annexure-A appended therewith certifies that the contents of the resolution plan meet all requirements of the Code and CIRP Regulations. Likewise, in para 3 of another affidavit filed vide Diary No. 1946 of 2018 same facts have been reiterated. Therefore, we find that the fifth requirement has also been fulfilled. 64. The resolution applicant also confirms that the resolution applicant and its connected person are not disqualified to submit a resolution plan under Section 29A of the Code and any other law applicable which further shows that the resolution plan conforms to the provisions of the law for the time being in force and does not contravene any such provision. 65. The sixth requirement is that it conforms to all such requirements which may be specified by the Insolvency and Bankruptcy Board. The aforesaid statement has been made by the RP in para 23 of the written statements filed on 13.04.2018 vide Diary N....
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....s fit, (4) The resolution professional shall submit the resolution plan approved by the committee to the Adjudicating Authority with the certification that: (a) the contents of the resolution plan meet all the requirements of the Code and the Regulations; and (b) the resolution plan has been approved by the committee. (5) The resolution professional shall forthwith send a copy of the order of the Adjudicating Authority approving or rejecting a resolution plan to the participants and the resolution applicant. (6) A provision in a resolution plan which would otherwise require the consent of the members or partners of the corporate debtor, as the case may be, under the terms of the constitutional documents of the corporate debtor, shareholders' agreement, joint venture agreement or other document of a similar nature, shall take effect notwithstanding that such consent has not been obtained, (7) No proceedings shall be initiated against the interim resolution professional or the resolution professional, as the case may be, for any actions of the corporate debtor, prior to the insolvency commencement date. (8) A person in-ch....
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....mpany Sterling Info tech Private Limited had purchased shares in Tata Teleservices Limited (TTL) which constitute 0.52% of the shares. It was alleged that Mr, C. Sivasankaran had taken a loan of Rs. 650 crores from Standard Chartered Bank and the Resolution Applicant-TSL had furnished guarantee. In the reply it has been explained that Sterling Infotech Private Limited has merely pledged its shares in Tata Teleservices Limited to SCB and in order to prevent the shares from being sold to an undesirable third party, the Resolution Applicant-TSL provided an undertaking to Standard Chartered Bank that it would purchase the shares at a pre-determined price in the event of an invocation. It never furnished any guarantee for repayment of loan taken by Sterling Infotech Private Limited from Standard Chartered Bank. The Resolution Applicant-TSL merely sought to purchase the shares which were in the nature of pre-emptory rights. Even that undertaking had lapsed nine years ago as it ceased to operate in March 2009 and has not been acted upon by Standard Chartered Bank. In any case the order of Bankruptcy issued by Supreme Court of Seychelles has been subsequently revoked in 2016. Therefore, it....
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....(d) has been convicted for any offence punishable with imprisonment for two years or more; (e).................. (f)................... (g).................. (h).................. (i) .................. (j)................... 72. A perusal of the aforesaid clause (d) would show that the expression used is 'punishable with imprisonment for two years or more, whereas under Section 33(1)(a) of the HSW Act the expression used is 'imprisonment for a term not exceeding two years or a fine or both'. The provisions of Section 29-A(d) of the Code would not be applicable to cover a juristic person and could be applied only to a natural person because it contemplates visiting the convict with imprisonment for two years or more. As there is no provision for imposition of fine and a corporate body like a company cannot be visited with imprisonment/custodial sentence. In that regard we find that reliance has been rightly placed on the majority view taken by Hon'ble the Supreme Court in the case of Rakesh Kumar Paul v. State of Assam, [2017] 15 SCC 67. In paragraph 25 the relevant observations have been made which reads thus:- "Whi....
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....pwards". However more plausible argument by the learned counsel of the RP and CoC was the one which is based on the judgment of Hon'ble the Supreme Court rendered in the case of Standard Chartered Bank (supra). In that case Hon'ble the Supreme Court held that a Corporate Entity might be prosecuted but if the sentence of imprisonment alone is provided then no sentence could be awarded.. In such a case it is to be visited with custodial sentence and we find that a Corporate Entity like a company cannot be visited with custodial sentence and therefore, sentence could be awarded. In that regard we place reliance on the observations made in paras 63 and 64 of the said judgment which read as under:- "63. There appears to be a difference of opinion amongst the learned counsel assailing the correctness of majority view in Valliappa as to whether the task of the Court in the case on hand is one of statutory interpretation. Some counsel have argued that it is open to the Court to read the words 'imprisonment and fine' as 'imprisonment or fine'. In our view, such a construction is impermissible. First, it virtually amounts to rewriting of the section. The Court would be reading the s....
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....given as 'liable to punishment'. In 'Words and Phrases-Permanent Edition', the following meaning has been given: The word 'punishable' in a statute stating that a crime is punishable by a designated penalty or term of years in the state prison limits the penalty or term of years to the amount or term of years stated in the statute. 9. The word 'punishable' is ordinarily defined as deserving of or capable or liable to punishment, punishable within statute providing that defendant may have ten peremptory challenges if offence charged is 'punishable' with death or by life imprisonment; means deserving of or liable to punishment; capable of being punished by law or right, may be punished, or liable to be punished, and not must be punished. 10. Corpus Juris Secundum, gives the meaning as: Deserving of, or liable to, punishment; capable of being punished by law or right; said of persons of offences. The meaning of the term is not 'must be punished', but 'may be punished', or 'liable to be punished' In the absence of a definition of 'punishable' we have referred to these for gathering the exact meaning of the word. In the sense given to the wor....
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.... made by Balco Employees Hon'ble the Supreme Court held that if by disinvestment in a public sector company employees of a company are adversely affected then they have to accept it as an incidence of service. It is not permissible to tinker with the resolution plan which protect the rights of all employees and there cannot be any possible grievance. Moreover, it is at the instance of one person alone namely Mr. Rahul Sengupta that a hue and cry has been raised. It appears to us that over 5000 employees appear to be satisfied with the resolution plan as rightly contended by Mr. Nayar and as a matter of right no objection to the resolution plan could be raised which is otherwise binding on all the stakeholders including the employees by virtue of provisions made in Section 31(1) of the Code once it is approved by the Adjudicating Authority-NCLT. 78. The objections raised by BEL would also not be sustainable it has also been made clear by Regulation 39(6) of the CIRP Regulations (supra) that a resolution plan which would otherwise require consent of members of the Corporate Debtor under the terms of the constitutional document, shareholders3 agreement, joint venture agreement or o....
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....charge upon the property in the hands of the buyer, [any transferee without consideration or any transferee with notice of the non-payment], for the amount of the purchase-money, or any part thereof remaining unpaid, and for interest on such amount or part [from the date on which possession has been delivered). A perusal of the aforesaid provision shows that it applies to Immovable property'. The plant and machinery cannot be regarded as immovable property. Moreover, to attract application of sub-section 4 (b) a charge must be shown to be created. It is not disputed that L&T has supplied plant and machinery and a feeble attempt has been made to argue that any property which is attached to earth must be regarded as immovable property as has been defined in Section 3(26) of the General Clauses Act. It has been claimed that charge has been created by supply, erection and installation of the plant and machinery on the respondent premises. 80. We are afraid that the claim made on behalf of L&T on the face of it appears to be wholly unsustainable. There is no document placed on record showing any creation of charge or security warranting a view that the L&T should be regarded....