TaxTMI 
TaxTMI 
2018 (11) TMI 558
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....was filed on 22/12/2017 by the State Bank of India (In short, SBI) u/s. 7 of the Insolvency and Bankruptcy Code, 2016 (In short, I & B Code, 2016) for initiating Corporate Insolvency Resolution Process (In short, CIRP) as against the corporate debtor/Jai Balaji Industries Ltd. alleging existence of default in repayment of loan advanced to the corporate debtor. 2. Pending consideration of the C.P., the four interim applications above referred were pressed for hearing on the side of the applicants in the CAs. 3. CA(IB) No. 510/KB/2018 is filed by the workers of the Corporate Debtor Jai Balaji Industries Ltd. The applicants submit that due to winding up proceeding pending before the Hon'ble High Court, Calcutta against the Corporate Debtor, the present petition being CP (IB.) No. 767/KB/2017 is not maintainable. They further submit that livelihood of 1000 of workers are at stake as steps to revive and rehabilitate the Corporate Debtor cannot be taken due to the stringent opposition of SBI, being the financial creditor in CP (IB) No. 767 of 2017. The applicants, therefore, seek relief in the form of the said Insolvency petition be permanently stayed and/or dismissed. 4. CA(IB) N....
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..... 3,36,56,664/- is due and payable by Jai Balaji Industries Ltd., the corporate debtor in the matter, it filed an affidavit in the winding up petition being C.P. No. 822 of 2014 before the High Court at Calcutta, stating the same, pursuant to the notice caused to be published in the newspaper dated July 24, 2018. The applicant is opposing CP (IB) No. 767/KB of 2017 and any insolvency resolution process to be initiated before this learned Tribunal, as winding up proceeding has already been admitted and is already in progress before the Hon'ble High Court at Calcutta, and unless the company petition pending before the Hon'ble High Court is finally decided, there cannot be a parallel proceeding continuing before this Hon'ble Tribunal. The applicant states that the Financial Creditor, SBI, has already appeared in the winding up petition and at the instance of the SBI, the final order of winding up dated June 7, 2018 was recalled. It has been the submission of the financial creditor that some form of notice/advertisement ought to have been issued so that creditors are heard before finally hearing the matter and passing the order, and accordingly the Hon'ble High Court di....
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....in any manner from hearing the application filed under Section 7 of the I & B Code, 2016. 11. Heard the Ld. Counsel Mr. Jishnu Chawdhury for the financial creditor, Ld. Sr. Counsel Mr. Abhrajit Mitra for the Corporate Debtor, Ld. Counsel for the workmen Mr. Aniruddha Roy and Ld. Counsel for the Dynamic Hard Coke Manufacturing Company. Perused the records and citations referred to on both sides. 12. The Ld. Counsel for the financial creditor/SBI who has filed the C.P. seriously objected all these applications and insisted for considering the CP(IB) No. 767/KB/2017 without taking into consideration of all the interim applications referred to above. Interim applications, on the other hand were filed challenging the maintainability of the proceeding to be initiated by the financial creditor/SBI in view of the pending winding up proceeding as against the very same corporate debtor before the Hon'ble High Court at Calcutta. 13. Ld. Counsel Mr. Jishnu Chawdhury for the financial creditor cited M/s. Unigreen Global Private Limited Vs. Punjab National Bank And Ors. - Company Appeal (AT) (Insolvency) No. 81 of 2017 and argued that what is to be considered by the Adjudicating Authority....
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....he interim applications cannot be recalled or reviewed by the Bench since this Bench has no power to recall or review the order already passed. I do find some force in the arguments on the side of the Ld. Sr. Counsel appearing for the corporate debtor and thereby I decided to hear the interim applications so as to see whether pendency of winding up proceeding already initiated at the instance of an operational creditor against the corporate debtor before the Hon'ble High Court at Calcutta in C.P. No. 822 of 2014 is a bar to initiate CIRP as against the very same Corporate Debtor. 17. The proposition laid down in the citation referred to on the side of the Financial Creditor, i.e., Unigreen Global (P.) Ltd. (supra) of the Hon'ble NCLAT does not at all restrict the Adjudicating Authority from hearing the interim applications challenging the maintainability of the C.P. No. 767/KB/2017 filed by the financial creditor. The main question to be answered in the applications in hand is, whether CP(IB) No. 767/KB/2017 for triggering CIRP as against the corporate debtor/Jai Balaji Industries Ltd. U/s. 7 of the I & B Code is maintainable where winding up petition have already been ini....
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....n before the Tribunal. 22. In the meanwhile, the Corporate Debtor has moved C.A. No. 133 of 2017 praying for stay of all further proceedings in the winding up application before the Hon'ble High Court at Calcutta in C.P. No. 822 of 2014 proposing settlement of the claim of the Applicant Creditor and the Hon'ble High Court at Calcutta passed a consent Order on 17-04-2017 stipulating certain terms. The Corporate Debtor failed in complying with the terms of settlement, thereby the Applicant Creditor has filed the C.A. No. 51 of 2018. The Hon'ble High Court at Calcutta passed an Order allowing C.A. No. 51 of 2018 on 07-06-2018 directing publication of fresh advertisement of the winding up Application in the newspapers for enabling the Secured Creditors and other Creditors of the Company (Corporate Debtor) to participate in the winding up Application. 23. Pending the above said winding up application before the Hon'ble High Court at Calcutta, the Financial Creditor/State Bank of India has filed the CP(IB) 767/KB/2017 on 22-12-2017. When this Application came up for consideration before this Bench, the Applicant who initiated the winding up proceedings, rushed to this T....
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.... on 16-09-2014 before the Hon'ble High Court at Calcutta which has been admitted by the Hon'ble High Court at Calcutta vide Order dated 17-08-2015. That winding up order is in force. Upon ordering the winding up, what the Hon'ble High Court has directed is to pay the principal sum of the amounts with interest due from the Corporate Debtor but the Corporate Debtor did not pay and even preferred an Appeal against the Order and a consent order has been passed as referred to above. Despite opportunity given to the corporate Debtor, it did not comply with the directions and thereby, in continuation of the order of admission of the winding up procedure, a fresh advertisement has been ordered. 27. Therefore, the question herein is as to whether after admission of a winding up application as against the Corporate Debtor and after issuing publication, can a Financial Creditor maintain an application under Section 7 of the Insolvency and Bankruptcy code, 2016 before this Tribunal? 28. At the outset, I would say that it is not maintainable at all. Various judgements of the Hon'ble High court, NCLT as well as NCLAT were brought to my notice on the side of the Corporate Debtor....
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....18.. 32. In the above cited order, the Appellant has preferred an appeal as against the order of dismissal of the application by the Hon'ble NCLT, New Delhi Bench, for the reason of the pendency of the winding up proceedings before the Hon'ble High court, New Delhi. 33. The Hon'ble Appellate Tribunal confirmed the order of dismissal. However, it set aside the order of direction to pay cost. The Hon'ble Appellate Tribunal dismissed the appeal by applying the ratio laid down in Unigreen Global (P.) Ltd. (supra) upon the reasons recorded as given below:- "4. The question as raised in this appeal fell for consideration before this Appellate Tribunal in "Forech India Pvt. Ltd. v. Edelweiss Assets Reconstruction Company Ltd. & Anr. - Company Appeal (AT) (Insolvency) No. 202 of 2017", wherein this Appellate Tribunal by judgement dated 23rd November, 2017 observed as follows : "7. There is no provision under the I&B Code which stipulate that if a 'winding up' or ' liquidation ' proceeding has been initiated against the corporate Debtor, the petition under Section 7 or Section 9 against the said Corporate debtor is not maintainable. 8. However, if a &....
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....'ble High Court of Judicature For Rajasthan Bench At Jaipur for reasserting the view taken by the Hon'ble NCLAT that after initiating winding up proceedings by the Hon'ble High Court, a proceeding under sections 7, 9 and under section 10 of the Code is not maintainable. 36. It has been held in the above cited judgement that "since winding up petition is pending before this High Court, no fresh application could have been filed under the Insolvency and Bankruptcy code, 2016 and application moved under Section 7 by the Respondent is held to be an abuse of the process of the Court and contrary to law. If any other interpretation is taken, it would result into multiplicity of the proceedings and would defeat the very purpose of framing of rules of 2016". 37. A reading of Para 36 in the above said judgement is good to understand the ratio laid down in the judgement. It reads as follows:- "36. As notices have already been served under Rule 26 of the Companies (Court) Rules, 1959 and all the parties are present before the Court and even a Provisional Liquidator was appointed, the present proceedings before this court would not be transferable under Rule 6 of the Rules of 2....
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....d to NCLT. The Hon'ble court has held that:- "12. In fact, if anything, the argument that Rule 26 contemplates a post-admission notice and only in the event such notice is actually served on the respondent that the petition shall stand transferred to NCLT, will lead to a peculiar situation. It will mean that those petitions, which are admitted and where notice of the petition is not served on the respondent pursuant to the order of admission, will stand transferred to NCLT and will be taken up Sat 15/15 CP 331-2016, 332-2016.doc for admission once again by requiring the petitioners in those petitions to furnish information for admission of the petitions under Sections 7, 8 or 9 of the Code, as the case may be. That would be clearly anomalous." 39. The very same view is taken by the Hon'ble High Court of Judicature at Hyderabad in the case of Paharpur Colling towers Ltd. v. Basal Steels and Power (P.) Ltd. 2017 (5) ALD 695 wherein it has been held as under:- "39. In the case of West Hills Realty Private Ltd. v. Neelkamal Realtors Tower Pvt. Ltd. (Company Petition No. 331 of 2016), decided on 23/12/2016, report in (2017) 3 CompLJ 225 (Bom) by the High Court of Bombay, a ....
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....bove referred, I am of the considered view that if a winding up petition filed against the Corporate Debtor has been admitted by Hon'ble High Court and notice under rule 26 of the Companies (Court) Rules, 1959 was issued and such Company petition has not been transferred after the commencement of Insolvency and Bankruptcy Code, 2016 and winding up proceedings has been initiated and pending before the Hon'ble High court the remedy if any available to the creditors who has not joined in the said winding up proceedings is not to approach to the Tribunal under the provisions of the Code but to submit its claim before the Hon'ble high Court. 42. Here in the case in hand, the Applicant in CA(IB)No. 688/KB/2018, Lakhotia transport Co. Pvt. Ltd. has moved the winding up petition long before the filing of this application by the Financial Creditor before this Tribunal. The winding up petition was filed before the Hon'ble High Court at Calcutta on 16-09-2014 and it was admitted on 17-08-2015 and notice was issued and advertisement of winding up petition was caused in the newspaper in terms of the winding up order on 14-09-2015. That order of admission of winding up proceedin....